Carney tells UK rates may rise this year

[Martin@AS Financial]

BOE Base Rate increases have always been a certainty since a fall to a historic low of 0.5% back in 2008. However, it is now looking very likely that we will see at least one increase this year.

Lenders are themselves getting prepared for this as we hae seen with the Lloyds Banking Group as well as the Royal Bank of Scotland capping loans above £500,000 to 4 x income. My understanding is that other banks are being put under a lot of pressure to do the same thing. Vince Cable yesterday called for a cap of 3.5x income on all loan sizes.



Carney tells UK rates may rise this year - Professional Adviser IFAonline

[Doggy Styles]

About time.

[rd409]

The fixed rate on my mortgage is about to expire by the end of this year. I have been weighing in the chances of rate increase vs penalty. It is going to be a close call in the end, and with my luck, I would be hit by the rate rise for sure

[BrilloPad]

No chance until after the next election.

[Martin@AS Financial]

About time.

I'm not convinced by the income multiple cap. Essentially, as I see it, there is a lot of cash sloshing around in London where I work and always has been, even through the credit crunch. By capping income multiples, this is going to give cash buyers even more of an advantage. A lot of transactions in London are by cash rich foreign investers and this would play directly into their hands.

[d000hg]

The fixed rate on my mortgage is about to expire by the end of this year. I have been weighing in the chances of rate increase vs penalty. It is going to be a close call in the end, and with my luck, I would be hit by the rate rise for sure

We're stuck for another 10 months; I'm not sure if that's good or bad. Looks like perhaps putting all available money into reducing the mortgage, even at the cost of neglecting ISAs, might be sensible before that happens? Or not bother with that until we remortgage and the rate goes up... put everything in savings this year and then remortgage at a lower LTV?

[DimPrawn]

No chance until after the next election.

WHS.

The economy is built on free debt. There is no real economy, just "my house has gone up £20K so I'm buying a new car on interest free, my house will pay for it." consumer mentality.

[d000hg]

Who controls the rate though - isn't the BoE able to make these decisions autonomously?

[DimPrawn]

Who controls the rate though - isn't the BoE able to make these decisions autonomously?

Yes, and the govt isn't influenced by big business donations, and your local planning office trip to the Seychelles courtesy of Tesco Travel doesn't influence planning permission....

[Unix]

The income multiple guards are for new buyers what about all the people who already are leveraged to the hilt, when interest rates go up they will default or try and look for a better rate, but then be denied die to leverage they require. I'm on 50% LTV with small mortgage so can get great rates but a rate rise could trigger a crisis for others.