Reply to: Mortgage rates are likely to soar

[Old Greg]

Can you please explain how the problem can be solved by rewarding the very behaviour that caused the problem?

It doesn't solve it. It isn't a binary problem soved vs problem not solved question in an 'Austrian' moralistic world.

It is probably the course of action that will lead to the best outcome given the situation we're in.

[doodab]

Can you please explain how the problem can be solved by rewarding the very behaviour that caused the problem?

It's only a problem if you think it's a problem.

[Jeff Maginty]

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[Old Greg]

There is too much public and private debt in this country. Printy-print and low interest rates are the only solution to inflate away all the debt and savings.

[Jeff Maginty]

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[TimberWolf]

Did the hapless taxpayer have no choice but to over-borrow?

Yes, they can save until they have a sizeable deposit for a fairly priced house and then have those savings pissed up the wall.

[Doggy Styles]

What would it take to make the bankers, politicians & regulators finally take responsibility for their failure?

Will they ever be made to pay for the destruction they've caused (or at least allowed to happen), or will they get away with dumping all of the liabilities on the hapless taxpayer?

Did the hapless taxpayer have no choice but to over-borrow?

[Jeff Maginty]

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[OwlHoot]

Base rate will remain close to zero. Lots more QE next year. ..

If by some chance the base rate does rise sooner, it'll be the banks passing on to their customers all of the punitive taxes levied on the evil banks. Socialists will be so pleased the banks are at long last getting their much deserved comeuppance.

[Doggy Styles]

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.

Same here, though mine's effectively paid off now. I keep a small debt outstanding because the account still has the mortgage amount available as a six-figure overdraft facility at base+1%.

When I was thinking of starting it, two different IFAs tried to tell me it was a bad idea... I wish I could remember all the bulls**t reasons they gave but the truth was there was no commission for them, and no chance of me changing it again later to one of their products.

The long and the short of it is, I hope interest rates go up now for my savings.

[TimberWolf]

Sir Benny Hill has been saying inflation would be below 2% for about 10 years, and he's still at it.

[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?

[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'.

[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.

[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.