Bank of England Interest rate increase

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Found 2nd Nov 2017
So what are peoples views on today's Bank of England Interest Base rate increase to 0.5%, how do you think it will affect you / others?
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I'm old enough to remember when mortgage rates were 10% or more. As a borrower I used that as my worst case scenario when assessing what I could or could not afford and overpaid my mortgage accordingly. I guess there are many people around these days who have never known a rate rise and never had to factor that into their budgeting. My hope is that these guys have had the foresight to account for this and have not overstretched themselves.
Nowadays I'm a saver not a borrower so the prospect of a rate rise fills me with pleasure not foreboding. Somehow I think it unlikely the banks will pass the rate rise on to that sector of the market in full though.
Guy on the news was saying this will hit him hard and won't be able to tolerate any more increases


Quite ridiculous that he didn't factor in higher rates when getting his mortgage. I remember paying 15% on my mortgage!
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I'm old enough to remember when mortgage rates were 10% or more. As a borrower I used that as my worst case scenario when assessing what I could or could not afford and overpaid my mortgage accordingly. I guess there are many people around these days who have never known a rate rise and never had to factor that into their budgeting. My hope is that these guys have had the foresight to account for this and have not overstretched themselves.
Nowadays I'm a saver not a borrower so the prospect of a rate rise fills me with pleasure not foreboding. Somehow I think it unlikely the banks will pass the rate rise on to that sector of the market in full though.
Guy on the news was saying this will hit him hard and won't be able to tolerate any more increases


Quite ridiculous that he didn't factor in higher rates when getting his mortgage. I remember paying 15% on my mortgage!
Its a bit smug to suggest people should have been factoring in interest rates of up to 10% as house prices aren't exactly comparable as to when the rates were that level. The fact that the average house price is 10x the average salary means people have to stretch themselves before they even start. In reality not many people who have bought a house in the last decade could cope with major rate increases.
Edited by: "g8spur" 3rd Nov 2017
My variable rate mortgage is going up by 62p per month
Doesn't really have any effect on me, I have no mortgage at the minute and would never put money in a savings account.
fivegoldstars13 m ago

My variable rate mortgage is going up by 62p per month


Maybe we could set up a crowd funding page to cover that outlandish amount
chocci2 h, 22 m ago

Guy on the news was saying this will hit him hard and won't be able to …Guy on the news was saying this will hit him hard and won't be able to tolerate any more increasesQuite ridiculous that he didn't factor in higher rates when getting his mortgage. I remember paying 15% on my mortgage!



Some people have got use to these rate's; some one from my generation has grown up in a recession with very little experience of anything pre 2008. They're not really going to know any better.

Wages are low along with interest rates and house prices are high. Even small fluctuations in interest rates are going to hit the lower paid end of society. Many people can only just afford to get by, some don't have an extra £20 a month.

We never really recovered from the recession.

I can't see rates going up by that much any time soon, I'd imagine it would trigger another crash (Even worse than 08) if they were to get anywhere near 5%.
Edited by: "teh.arn" 3rd Nov 2017
Predikuesi11 m ago

Maybe we could set up a crowd funding page to cover that outlandish amount


I'm willing to accept cash, cheques and the milk of human kindness.
g8spur50 m ago

Its a bit smug to suggest people should have been factoring in interest …Its a bit smug to suggest people should have been factoring in interest rates of up to 10% as house prices aren't exactly comparable as to when the rates were that level. The fact that the average house price is 10x the average salary means people have to stretch themselves before they even start. In reality not many people who have bought a house in the last decade could cope with major rate increases.


I wouldn't say it is smug. I might say it is prudent. Attitudes to borrowing and debt have changed a lot over the last thirty years or so. Houses do cost a lot more but so does living. Expectations have risen faster than interest rates. When I bought my first house I did not consider mobile phone contracts or how much the latest games console would set me back. When my parents bought their first house, the idea of a foreign holiday or a car was completely alien. Attitudes have changed .
g8spur53 m ago

Its a bit smug to suggest people should have been factoring in interest …Its a bit smug to suggest people should have been factoring in interest rates of up to 10% as house prices aren't exactly comparable as to when the rates were that level. The fact that the average house price is 10x the average salary means people have to stretch themselves before they even start. In reality not many people who have bought a house in the last decade could cope with major rate increases.


people have been told to boring excess that rates are at historic lows - surely not fit to take on a mortgage if they can't understand that concept ...that they might rise one day.

This is why there are so many questions when taking out a mortgage - people are deluded or stupid to think rates wouldn't rise again.
psychobitchfromhell8 m ago

I wouldn't say it is smug. I might say it is prudent. Attitudes to …I wouldn't say it is smug. I might say it is prudent. Attitudes to borrowing and debt have changed a lot over the last thirty years or so. Houses do cost a lot more but so does living. Expectations have risen faster than interest rates. When I bought my first house I did not consider mobile phone contracts or how much the latest games console would set me back. When my parents bought their first house, the idea of a foreign holiday or a car was completely alien. Attitudes have changed .



Expectations and luxuries aside house prices have increased a lot more than wages.
CoeK3 m ago

Expectations and luxuries aside house prices have increased a lot more …Expectations and luxuries aside house prices have increased a lot more than wages.


And if you can't afford to buy the house or flat you really want then buy the one you can afford not the one you overstretch yourself to buy!

For the majority of cases .. its simple and always has been, people get themselves into debt problems with mortgages because they live/buy beyond their means.
teh.arn26 m ago

Some people have got use to these rate's; some one from my generation has …Some people have got use to these rate's; some one from my generation has grown up in a recession with very little experience of anything pre 2008.




When taking out a mortgage you are shown what your repayments will be if the interest rates rise significantly so that's not much of an excuse. The Bank of England have also been threatening to raise interest rates for months.
Edited by: "RossD89" 3rd Nov 2017
RossD893 m ago

When taking out a mortgage you are shown what your repayments will be if …When taking out a mortgage you are shown what your repayments will be if the interest rates rise significantly so that's not much of an excuse. The Bank of England have also been threatening to raise interest rates for months.



They were never going to do them by anymore than .25%.
Anything significant raises would lead to people losing houses.
davewave4 m ago

And if you can't afford to buy the house or flat you really want then buy …And if you can't afford to buy the house or flat you really want then buy the one you can afford not the one you overstretch yourself to buy! For the majority of cases .. its simple and always has been, people get themselves into debt problems with mortgages because they live/buy beyond their means.



Thanks for the advice Dave. I'll come back to you before I buy a house to confirm I can afford it.
RossD895 m ago

When taking out a mortgage you are shown what your repayments will be if …When taking out a mortgage you are shown what your repayments will be if the interest rates rise significantly so that's not much of an excuse. The Bank of England have also been threatening to raise interest rates for months.



People with good jobs don't want to live in an ex council house on the off chance that rates rise significantly just because they are buying a house this decade.
davewave7 m ago

And if you can't afford to buy the house or flat you really want then buy …And if you can't afford to buy the house or flat you really want then buy the one you can afford not the one you overstretch yourself to buy! For the majority of cases .. its simple and always has been, people get themselves into debt problems with mortgages because they live/buy beyond their means.



I'd love to live in your ideal world.

It's not as simple as you make it seem.

Houses near me are around £600k as standard, 1-2 bed flats are about £350-400k, I'm zone 6, so not even that close to London.
Moving further out means that you might be able to get a house for a bit cheaper but my pay would be significantly less, travel would cost more and take longer too.

House prices are this high because interst rates and house building are so low.
We just need more affordable houses; they should have scrapped the help to buy schemes and just poured the money into housing.
teh.arn2 m ago

I'd love to live in your ideal world.It's not as simple as you make it …I'd love to live in your ideal world.It's not as simple as you make it seem.Houses near me are around £600k as standard, 1-2 bed flats are about £350-400k, I'm zone 6, so not even that close to London.Moving further out means that you might be able to get a house for a bit cheaper but my pay would be significantly less, travel would cost more and take longer too.House prices are this high because interst rates and house building are so low.We just need more affordable houses; they should have scrapped the help to buy schemes and just poured the money into housing.



You know he will reply and tell you to move somewhere cheaper and do a 3 hour commute.
It will help encourage savers the more interest rates increase.

Personal debt is at unprecedented levels, there must be greater reward for saving to be encouraged.

House prices have been a runaway train for 20 years, and unaffordability is the root cause of a great many problems. If higher rates help reduce ever increasing upward pressure - then so be it.

But on one point, Remainers will ignore the massive economic life destroying imbalances prior to Brexit, and blame grannies shopping costing a few pence more on that decision.
Dilithium2 m ago

It will help encourage savers the more interest rates increase.Personal …It will help encourage savers the more interest rates increase.Personal debt is at unprecedented levels, there must be greater reward for saving to be encouraged.House prices have been a runaway train for 20 years, and unaffordability is the root cause of a great many problems. If higher rates help reduce ever increasing upward pressure - then so be it.But on one point, Remainers will ignore the massive economic life destroying imbalances prior to Brexit, and blame grannies shopping costing a few pence more on that decision.



Destard-Coeks law
teh.arn16 m ago

I'd love to live in your ideal world.It's not as simple as you make it …I'd love to live in your ideal world.It's not as simple as you make it seem.Houses near me are around £600k as standard, 1-2 bed flats are about £350-400k, I'm zone 6, so not even that close to London.Moving further out means that you might be able to get a house for a bit cheaper but my pay would be significantly less, travel would cost more and take longer too.House prices are this high because interst rates and house building are so low.We just need more affordable houses; they should have scrapped the help to buy schemes and just poured the money into housing.


600k for a house, seems reasonable for some but not all so.. perhaps a person cant afford one but needs to live in a house - whatever could they do...move elsewhere perhaps or rent!?!

Its as simple as people are willing to accept - people just don't like to face the truth and prefer to take a gamble on rates not increasing from 0.25% ! After being told repeatedly ad infinitum that interest rates are historically low and will almost certainly rise.

Its not an ideal world but you do have to use common sense and face facts sometimes rather than just play dumb as some borrowers have.

As a supporter of migration surely you would see the benefit of moving to find a place where living costs suit a person.
CoeK16 m ago

You know he will reply and tell you to move somewhere cheaper and do a 3 …You know he will reply and tell you to move somewhere cheaper and do a 3 hour commute.


ha ha - 3 hour commute ... hmm such a puzzle.
davewave2 m ago

600k for a house, seems reasonable for some but not all so.. perhaps a …600k for a house, seems reasonable for some but not all so.. perhaps a person cant afford one but needs to live in a house - whatever could they do...move elsewhere perhaps or rent!?! Its as simple as people are willing to accept - people just don't like to face the truth and prefer to take a gamble on rates not increasing from 0.25% ! After being told repeatedly ad infinitum that interest rates are historically low and will almost certainly rise.Its not an ideal world but you do have to use common sense and face facts sometimes rather than just play dumb as some borrowers have.As a supporter of migration surely you would see the benefit of moving to find a place where living costs suit a person.



You can acknowledge the reality of the situation but still dislike it at the same time. I think that is basically what people are doing.
Original Poster
psychobitchfromhell53 m ago

I wouldn't say it is smug. I might say it is prudent. Attitudes to …I wouldn't say it is smug. I might say it is prudent. Attitudes to borrowing and debt have changed a lot over the last thirty years or so. Houses do cost a lot more but so does living. Expectations have risen faster than interest rates. When I bought my first house I did not consider mobile phone contracts or how much the latest games console would set me back. When my parents bought their first house, the idea of a foreign holiday or a car was completely alien. Attitudes have changed .

That's very true,
Also it seems the car is now becoming the new 2nd mortgage
Edited by: "cliosport65" 3rd Nov 2017
davewave8 m ago

ha ha - 3 hour commute ... hmm such a puzzle.



My commute is a massive 7 minute drive. Any more than that and I would want a large wage rise.

I do only have to do it twice a month to be fair.
Edited by: "CoeK" 3rd Nov 2017
cliosport654 m ago

That's a very true,Also it seems the car is now becoming the new 2nd …That's a very true,Also it seems the car is now becoming the new 2nd mortgage



Some people take cars to the extreme. It is tempting to get a really good car but I made a deal with myself when I started working that my car is only allowed to be a third of my house payment.
CoeK3 m ago

Some people take cars to the extreme. It is tempting to get a really good …Some people take cars to the extreme. It is tempting to get a really good car but I made a deal with myself when I started working that my car is only allowed to be a third of my house payment.


Are you doing a sponsored online post? SUTC?
CoeK4 m ago

Some people take cars to the extreme. It is tempting to get a really good …Some people take cars to the extreme. It is tempting to get a really good car but I made a deal with myself when I started working that my car is only allowed to be a third of my house payment.


way too much but then I drive cars into the ground.
Saturn35 s ago

Are you doing a sponsored online post? SUTC?



Not really sure what you mean?
davewave1 m ago

way too much but then I drive cars into the ground.



That is my limit, i'm not even close, we have 2 cars and a motorbike in our household though one of them is a company car.
CoeK1 m ago

Not really sure what you mean?


Circa 50+ posts in a 24 hour period. Do you have a target?
teh.arn39 m ago

They were never going to do them by anymore than .25%.Anything significant …They were never going to do them by anymore than .25%.Anything significant raises would lead to people losing houses.


I don't understand this way of thinking. Why does it make a difference how quickly the rates go up? If someone can only afford £500 a month with a £470 mortgage it doesn't matter if it creeps up 0.25% every year or 2% every year. If it gets to 10% that person would be unable to pay and they would lose their house. It's just like dragging out the inevitable.
Good news for me as the FTSE has jumped at the news
Original Poster
CoeK7 m ago

Some people take cars to the extreme. It is tempting to get a really good …Some people take cars to the extreme. It is tempting to get a really good car but I made a deal with myself when I started working that my car is only allowed to be a third of my house payment.


At least you had a plan, most people just seem to like driving around in flash cars which in turn has stretched their budget too. Basically all their priorities are wrong
Saturn1 m ago

Circa 50+ posts in a 24 hour period. Do you have a target?



Loads of them, none of them to do with here though.

I couldn't tell you how many posts you have made in the last 24 hours, because I can't bring myself to care.
cliosport651 m ago

At least you had a plan, most people just seem to like driving around in …At least you had a plan, most people just seem to like driving around in flash cars which in turn has stretched their budget too. Basically all their priorities are wrong



I know a few people with fancy cars, fancy phones and rubbish houses.

I would rather be able to park a decent car in a nice street than a brilliant car in a street where it gets smashed up every 5 minutes.
MIDURIX5 m ago

I don't understand this way of thinking. Why does it make a difference how …I don't understand this way of thinking. Why does it make a difference how quickly the rates go up? If someone can only afford £500 a month with a £470 mortgage it doesn't matter if it creeps up 0.25% every year or 2% every year. If it gets to 10% that person would be unable to pay and they would lose their house. It's just like dragging out the inevitable.



Of corse it does.
MIDURIX9 m ago

I don't understand this way of thinking. Why does it make a difference how …I don't understand this way of thinking. Why does it make a difference how quickly the rates go up? If someone can only afford £500 a month with a £470 mortgage it doesn't matter if it creeps up 0.25% every year or 2% every year. If it gets to 10% that person would be unable to pay and they would lose their house. It's just like dragging out the inevitable.



The more capital you can pay off they more likely you can get a more favourable mortgage in the future.
davewave42 m ago

600k for a house, seems reasonable for some but not all so.. perhaps a …600k for a house, seems reasonable for some but not all so.. perhaps a person cant afford one but needs to live in a house - whatever could they do...move elsewhere perhaps or rent!?! Its as simple as people are willing to accept - people just don't like to face the truth and prefer to take a gamble on rates not increasing from 0.25% ! After being told repeatedly ad infinitum that interest rates are historically low and will almost certainly rise.Its not an ideal world but you do have to use common sense and face facts sometimes rather than just play dumb as some borrowers have.As a supporter of migration surely you would see the benefit of moving to find a place where living costs suit a person.



That doesn't sort the issue with affordable housing though, does it?

You can't just say 'Oh well, move to a cheaper part of the country'.
The housing issue needs to be resolved.
Edited by: "teh.arn" 3rd Nov 2017
Mark Carney (BOE) seems to have been appointed by George Osborne , need I say more ?

A very interesting programme in two parts has just been on BBC2 ; 'The Super -Rich And us, which gave some good reasons why we are in such a mess .
From that boom and bust could be on its way again .
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