HMG now realise they made a MAJOR error!!!

[Bagpuss]

I'm really glad I'm giving up my savings interest to help some feckless idiots who borrowed too much

[TykeMerc]

Is there anywhere that gives a list of interest rates the banks/building societies are charging borrowers at the moment? On normal variable interest rate accounts.

HSBC at 4% looks to be the lowest on this list, with some edging towards 7%
http://www.moneysupermarket.com/mortgages/

I've no idea what my bank (Barclays) are charging at the moment, or whether they plan to drop them.

My mortgage is with the Clydesdale group and according to a letter a few days ago my rate is 3.6x%, it's an ordinary offset mortgage with no discount period or anything.

[milanbenes]

Bob,

I think,

'Why is 4% reasonable? Why don't they just drop rates to 1% straight away, or better yet, 0%, then everything would be rosy.

Try to think it through now, you can do it.'


is a little too complicated for this lot to try to understand.

Milan.

[oracleslave]

Reasonable is at about 4% rather than 7% !!! A mate of mine with 2 kids is currently paying 1200 pounds a month on his mortgage.

I pay double that and i'm a permie.

HTH.

[ferret]

Reasonable is at about 4% rather than 7% !!! A mate of mine with 2 kids is currently paying 1200 pounds a month on his mortgage. No wonder the country is in a mess and people are losing their homes. Interest rates on mortgages should be much lower, because we are in recession!! Keeping those rates artificially high for current borrowers is a scandal, and totally unnecessary.

Maybe your mate should have looked into being able to service a mortgage at a range of interest rates before committing to buy. I am looking at buying again in the next few years and unless I can afford 10% interest rates then I will not borrow that amount. No-one forced your mate to take out a mortgage and he should have looked into being able to repay it under the range of circumstances you can expect in any 25 year period or whatever the life of the loan is. To think they will stay around 4-5% for the lifetime of the loan is a little naïve to say the least.

People are losing their homes because they borrowed too much. They did not want to see past the dream of house price induced wealth that was fed to them by new labour. As your posts indicate, some people have still to wake up to the awful truth that houses are not worth what we were led to believe. Predicted to be down around 20% over 2008 and then the same again next year:
http://news.bbc.co.uk/1/hi/uk_politics/7732901.stm

All the news now is bad in terms of redundancy and also the length and depth of the recession that looms before us:
http://news.bbc.co.uk/1/hi/business/7729253.stm

I think that a lot of people will be in your mate's situation and a fair few will go under. A harsh lesson or two to learn - 1) don't borrow what you cannot afford to pay back and 2) the value of any commodity can go down as well as up.

[TykeMerc]

The sad thing about what you say Ferret is that the very same lessons were learned in the late '80's/early '90's when loads of people dropped into negative equity.

Since then mortgages had become very much easier to obtain and for dramatically larger amounts than they were back then.

It's a pity that people don't learn from history.

[expat]

The sad thing about what you say Ferret is that the very same lessons were learned in the late '80's/early '90's when loads of people dropped into negative equity.

Since then mortgages had become very much easier to obtain and for dramatically larger amounts than they were back then.

It's a pity that people don't learn from history.

Indeed. I had a mortgage in 1991 when rates went up to 15%. I would never now take on a mortgage that I couldn't service at that rate.

[Bagpuss]

Maybe your mate should have looked into being able to service a mortgage at a range of interest rates before committing to buy. I am looking at buying again in the next few years and unless I can afford 10% interest rates then I will not borrow that amount. No-one forced your mate to take out a mortgage and he should have looked into being able to repay it under the range of circumstances you can expect in any 25 year period or whatever the life of the loan is. To think they will stay around 4-5% for the lifetime of the loan is a little naïve to say the least.

.

Spot on, I have never borrowed more than I can afford to repay, taking into account possibly increases in interest rates and times on the bench. Too many people have maxed out based on current earnings and current interest rates, folly IMHO

[Cyberman]

As usual, certain people on here miss the point in that Northern Rock are being forced to repay a loan to HMG, and are keeping their rates higher than other banks to force people to go to those other banks. This is wrong, when other banks are also borrowing government funds but do not have this stipulation.

It also means that some people that cannot move to other banks are being forced to pay very high interest rates after coming off a low fixed rate, even though their repayments are up to date and their credit is good. If you cannot see any unfairness on these borrowers then you really are dense !!

[KentPhilip]

Reasonable is at about 4% rather than 7% !!! A mate of mine with 2 kids is currently paying 1200 pounds a month on his mortgage. No wonder the country is in a mess and people are losing their homes. Interest rates on mortgages should be much lower, because we are in recession!! Keeping those rates artificially high for current borrowers is a scandal, and totally unnecessary.

Your mate took out the mortgage knowing that rates might at some point go up above 15% (as they did in the early 1990's) and now he is complaining because they are up to 7%?

But look at the bright side - your mate is helping house prices to come down to allow first time buyers such as myself to get onto the ladder (yes I am a cash buyer)