Mortgage rates are likely to soar

[DimPrawn]

Mine is tied to the BoE base rate. In the last credit crunch this didn't move as higher BoE interest rates would have caused more harm than good. So what is the opinion of you lot regarding predictions for the BoE base rate?

Base rate will remain close to zero. Lots more QE next year. Stick with the lowest base rate tracker you can find and pay down your mortgage debt. Rates will rise, but that's at least 10 years away, by which time, if you've any sense you'd have paid off your mortgage and might even have some savings, double boomed.

[BrilloPad]

Base rate will remain close to zero. Lots more QE next year. Stick with the lowest base rate tracker you can find and pay down your mortgage debt. Rates will rise, but that's at least 10 years away, by which time, if you've any sense you'd have paid off your mortgage and might even have some savings, double boomed.

A bit of a shame for those who have retired - but hey ho.

Not sure I will ever get to retire - I reckon hyperinflation will wipe me out.

[MrRobin]

Then you should be using the low payments as an opportunity to repay the mortgage before the rates go up or you're forced to change to a different (and much less favourable) mortgage one way or the other.

Better still...

Put the extra cash you are saving into a high interest account. When the mortgage rate goes up, take the money out from the ISA or whatever and THEN pay a big chunk of the mortgage.

[NorthWestPerm2Contr]

All these arguments here are exactly the ones that have been raging on House Price Crash forums since 2004.

THERE WILL BE NO HOUSE PRICE CRASH.

Houses are priced in paper money. Paper money is being printed to oblivion. Measured in paper money, house prices are rising and will continue to rise.


Here is the average UK house priced in ounces of Gold.



If you haven't been holding Gold or a non debased currency like AUD, CHF, NOK, you've missed the crash.

HTH BIDI

That graph is actually really interesting. If you think about it, Gold has been a measure of wealth down the centuries up until today. Considering "Real Inflation" i.e. not RPI, house prices have really gone down over the past few years especially after the numerical price drop is factored in. Perhaps they won't go much lower, but we must wait for salaries to come back in line before they start to become affordable again.

[BoredBloke]

Base rate will remain close to zero. Lots more QE next year. Stick with the lowest base rate tracker you can find and pay down your mortgage debt. Rates will rise, but that's at least 10 years away, by which time, if you've any sense you'd have paid off your mortgage and might even have some savings, double boomed.

That's what I figured. Mine is currently tracking at BoE + 0.49% for the life of the mortgage

[norrahe]

Then you should be using the low payments as an opportunity to repay the mortgage before the rates go up or you're forced to change to a different (and much less favourable) mortgage one way or the other.

I went for repayment rather than interest only.

Am hoping I'll have paid off a good chunk of it by next year. Also the tenants we should be getting will cover the current payments, so any extra won't be too bad.

[russell]

I went for repayment rather than interest only.

Am hoping I'll have paid off a good chunk of it by next year. Also the tenants we should be getting will cover the current payments, so any extra won't be too bad.

We got a One Account mortgage, which is perfect for contracting, you can pay as much or as little as you want as long as its paid before the end of term (25 years). AShould be paid off in 5 years as every penny of income goes to reduce the capital and interest is reduced.

[DimPrawn]

We got a One Account mortgage, which is perfect for contracting, you can pay as much or as little as you want as long as its paid before the end of term (25 years). AShould be paid off in 5 years as every penny of income goes to reduce the capital and interest is reduced.

Which is why the economy is fked, and why the base rates will remain zero/negative. Low interest rates makes people pay down debt whilst it is cheap in anticipation of the cost rising, so the economy stagnates (low consumer spending), so the recovery does not happen, so the BoE keep rates low, and the deadlock continues.

If they want the economy to recover, raise the base rate to 15% for 6 months, everything shakes out and it's back to boom time.

[TimberWolf]

If they want the economy to recover, raise the base rate to 15% for 6 months, everything shakes out and it's back to boom time.

The Maggie solution. And if that doesn't work 'press a little harder'.

[AtW]

Which is why the economy is fked, and why the base rates will remain zero/negative. Low interest rates makes people pay down debt whilst it is cheap in anticipation of the cost rising, so the economy stagnates (low consumer spending), so the recovery does not happen, so the BoE keep rates low, and the deadlock continues.

On a bright side of things Sir Merv might just become Lord Merv, worth the pain right?