Bank Interest Rise , How Will It Affect You ?

[marsh man]

What with just about everything going up and up in price on a daily basis ,today's interest rate increase must be a nightmare for a lot of home owners and those who are facing rent increases .

I really feel sorry for those who for no fault of there own are finding there income will not cover all the increases in day to day living .

Touch wood we paid our mortgage off a good while ago and we have managed to pay for anything we needed and when the bills come through the letter box , but neither my wife drink or smoke and I haven't been on holiday for more years than I care to remember , not that holidays bother me .

Sadly for many  people there will be a lot of worrying times ahead .

 

[DUNKS]

It wont!

[Weihrauch17]

The pound went down 2% against the dollar, it will negatively affect anyone who buys imported goods irrespective of all the other costs for mortgages etc.  The utterly useless BOE are about a year behind the times and blame anyone but themselves.  Door, Horse, Bolted.

Edited November 3, 2022 by Weihrauch17

[Newbie to this]

Savings will start earning something for a change.

[oldypigeonpopper]

Hello, it's young families who have worked hard and saved to actually buy their home that will suffer, and those with high rents, difficult times ahead, my 2 sons should be able to cope, my self I am at an age where you just pay as you go along in life,

[Weihrauch17]

6 minutes ago, Newbie to this said:

Savings will start earning something for a change.

The Banks pass dregs on.

[TOPGUN749]

It may help raise savings income,but nowhere near the inflation rate,Mortgage loans are still very cheap compared to the rates of the 1990’s when I remember paying over 12%.Higher interest rates should help to bring down house prices from ridiculous 10+ times income!

[Spr1985]

Thankfully my wife and I fixed our mortgage  for 5 years at a really good rate just before all of this stuff started to happen, really hoping that it sorts itself out within our fixed term, but will be fine either way. I really do feel for the people that work there fingers to the bone to enable a good standard of living mortgage etc and get punished and may lose it all due to the current financial state of the country. 

[Dave at kelton]

My pension is screwed and this won’t have a material impact on savings rates comparative to inflation. My prediction is we have a tough ten years ahead. I well recall the situation in the nineties and the feeling of looking at the mortgage repayment realising that I could afford that and nothing more. No heat, food or anything. My heart bleeds for young families having to go through what I did. 

Fortunately we came out the other side eventually but not sure where this leaves me as a pensioner. Fortunately I have a day a week work to top up the income…. for now.

[marsh man]

I can see the knock on effect with having less disposable income that pubs and restaurants are going and try to keep open for Christmas and then they will be falling down like nine pins , fuel have started to rise again and the gas and electric is due to go up again in the new year , people can only cut so many corners before there isn't any more corners they will be able to cut .

[enfieldspares]

1 hour ago, Dave at kelton said:

My pension is screwed and this won’t have a material impact on savings rates comparative to inflation. My prediction is we have a tough ten years ahead. I well recall the situation in the nineties and the feeling of looking at the mortgage repayment realising that I could afford that and nothing more. No heat, food or anything. My heart bleeds for young families having to go through what I did. 

Fortunately we came out the other side eventually but not sure where this leaves me as a pensioner. Fortunately I have a day a week work to top up the income…. for now.

Gordon Brown already screwed my pension back in 1997. 

[12gauge82]

It's the young I feel most sorry for. They have been forced to secure large mortgages on already unaffordable houses if they want any prospective of being a home owner and now the rugs been pulled from under some of their feet. They'll literally have no lives other than going to work and not even have anything to show for it. 

[ashtons99]

I get the feeling that most on here are towards the older end with small or no mortgage so from that perspective maybe not a great impact. Also it will make things better for those with savings but equally what you make there will soon go on the increased cost of living. 
My wife and I as well as the kids are fairly well settled financially and we are in a position to help them if things get tight but I’m sure there are many out there who won’t be in such a position. 
We also need to recognise that a lot will have grown up in a “max it up” society where many live their lives to their limits, never having known interest rate rises, buying nice motors they could never normally afford but with PCP finance making them accessible. Suddenly the cost of their mortgage goes up a lump and they have to make difficult life choices. 

[team tractor]

I’ve 10 years left on my mortgage and I’ve only fixed for 2 more years . Worried ? Nope. Not at all . 
I’m more worried about increases in electricity at work and materials increase . ( I know it’s all relevant) 

I don’t smoke or drink but without sounding like a terrible person I witness my mates that are struggling are always buying beer or smoking 10-20 fags a day at £280-300 a month . 

 

[Lloyd90]

4 hours ago, TOPGUN749 said:

It may help raise savings income,but nowhere near the inflation rate,Mortgage loans are still very cheap compared to the rates of the 1990’s when I remember paying over 12%.Higher interest rates should help to bring down house prices from ridiculous 10+ times income!

 

Rates may of been 12% + in the 1990's but generally debt was significantly lower. 

Houses were were averaging around £50k. 

Average prices now are approaching £300k. 

Whilst a lot of people choose to live in debt now, its a lot harder to avoid debt than in the past also, unless you want to live the existence of a hermit. 

 

In order for things to be as bad as they were in the 1990's, rates don't need to go anywhere near as high as 12%. 

If rates hit 6% as predicted there will be a massive impact on everybody. 

 

 

The raise from the BOE Base Rate from 2.25% to 3% will add about £40 per month PER £100k debt onto a variable mortgage. 

So an average debt of £250k mortgage will be going up like £100 per month, thats without accounting for the previous load of rises, and the energy rises on top of that.

I imagine people on variable rates will have seen their household costs (just mortgage and energy) go up by £600-800 a month over the last few months.

Then you take into account rhe increases in costs of Petrol, food, and pretty much everything else, and it's a real miserable situation. 

 

 

In my work in the emergency team we are getting a big influx of homeless presentations but the types of people we never used to see. We used to get the usual homeless people with history of mental health issues or siubstance misuse etc. 

 

Recently we are having things like Student's who can't pay the rent but who's parents won't let them back home. 

I had one on Tuesday night, a pensioner whos wife was a care worker, their landlord sold the house, they said the landlord was fair, they had loads of notice but they simply could not afford the high rental prices anywhere else. They'd been sleeping in their car for 3 weeks, had totally depleted any savings they had at all trying to find new accommodation and then ran out of money. 

I sorted them a hotel for the night and referred to housing (who are already very stretched as is). 

 

 

3 hours ago, 12gauge82 said:

It's the young I feel most sorry for. They have been forced to secure large mortgages on already unaffordable houses if they want any prospective of being a home owner and now the rugs been pulled from under some of their feet. They'll literally have no lives other than going to work and not even have anything to show for it. 

Pretty much sums it up. And it's not as if you can object to the massive house prices, rents are even higher than the massive mortgages. 

You either get on the ladder or live with your parents / family or be homeless. 

 

There's a huge number of people in Bristol living in vans and campers across the city. 

[oldypigeonpopper]

Hello, as a side note I am getting fed up with all these experts on TV, Martin Lewis , Jamie's £1 pound wonders, there's another one tonight, a financial garu , what's that all about, life is not rocket science, yes the cost of living is screaming for millions of people including those I mentioned in my last post, while energy costs are going off the scale BP raked in billions of £s for the last 3 months, it's just plain corporate greed, and that includes Tesco who say every little helps while they still want their billions profit, 

[Bobba]

When listening to reports on the impact of mortgage rate rises I’m so glad that those days are behind us.

In 1969 my job took me to Lancashire. Aged 26 we bought our first house. £3,650 and we had only my salary of £1,150 p/annum. But the system was so much different then. Building societies were branch based and each had monthly cash allocations. You had to have your savings with them to get on their ladder. When a mortgage became available you were restricted to only 2 1/2 times your salary. If there was the prospect of no more children then possibly the wife’s salary was included. There was only one product offered. A 25 year repayment mortgage at a variable rate. In the housing market the limited availability of mortgages kept prices quite stable and the impact of interest rate we’re difficult but not nearly as problematic as they seem to be today.

Climbing the greasy career pole we moved three times in six years. The benefit of the then system allowed us to transfer the mortgage to the new property. Our final move was in 1975. In the late 70’s some mortgage rates went to 17% !! A lot different than today. A problem, yes, but the impact was less than it seems today because of the limitations on the amounts you could borrow.

As I said I’m glad those days are behind us.

[Cosmicblue]

Like Bobba I can remember when Mortgage rates were the wrong side of 15%, back then then we'd always go for 5 year fixed rate deals and hopefully ride out the worst of the peaks. Have been mortgage free for 10 years, cars are owned outright and debt free...pondering retirement now.

There are dark times ahead for those with variable-rate mortgages, especially those that moved when the stamp duty holiday was a thing and house prices rocketed.  We are going to start hearing about negative-equity and home owners who have mortgages greater than the value of the house again.  You only have to look at Rightmove and houses for sale in your own area - house prices being reduced are a daily basis.  Affordability is an issue.

I'm mindful that the financial crash of 2008 was triggered by 'toxic loans' over in the USA - Fannie Mae and Freddie Mac are two names that spring to mind and the seemed to trigger financial institutions over here having a close look at their own portfolios and discovering they had lent money unwisely.

 

[Westley]

Like the above posts I too had my first mortgage in 1967. We spent the first 12 months of marriage living with In-Laws, which enabled us to save the deposit on a house. We filled it with mainly second hand furniture. The only 'debt' we had was the mortgage. 12 months later and we had the first child, so we now relied upon just a single income. Yes we struggled, ate so many pigeons, rabbits and wildfowl in season, BUT we still only had the mortgage debt. I did not see a need to cover my body in artwork that resembled the Walker Art Gallery and cost about as much to obtain. I was not paying extortionate amounts to have the latest mobile phone, or in excess of £1000 for a blooming electric bike. I had no need for the latest computer game (or the availability) I tended to fall asleep in an armchair after a hard day at work. If we could not afford to buy something for cash, we did without. Both of our Parents helped out with various things, food included and used household goods. I have NEVER been out of work since 1961 and when I joined the Police in 1974, I was having to do a second job just to survive . My 2 Daughters, both now in their 50's have followed on with a similar life pattern. Their only debts being a house and car. Shame I am unable to say the same about the Grandkids ranging from 17 to 37. They want the lot NOW, 2 of them have standing orders to my bank account,  paying back money that bailed them out of credit card debt. Yes, I feel sorry for the younger generation,  but a lot of their suffering is of their own making. If you can not afford it, wait until you can  !

[Newbie to this]

32 minutes ago, Westley said:

Like the above posts I too had my first mortgage in 1967. We spent the first 12 months of marriage living with In-Laws, which enabled us to save the deposit on a house. We filled it with mainly second hand furniture. The only 'debt' we had was the mortgage. 12 months later and we had the first child, so we now relied upon just a single income. Yes we struggled, ate so many pigeons, rabbits and wildfowl in season, BUT we still only had the mortgage debt. I did not see a need to cover my body in artwork that resembled the Walker Art Gallery and cost about as much to obtain. I was not paying extortionate amounts to have the latest mobile phone, or in excess of £1000 for a blooming electric bike. I had no need for the latest computer game (or the availability) I tended to fall asleep in an armchair after a hard day at work. If we could not afford to buy something for cash, we did without. Both of our Parents helped out with various things, food included and used household goods. I have NEVER been out of work since 1961 and when I joined the Police in 1974, I was having to do a second job just to survive . My 2 Daughters, both now in their 50's have followed on with a similar life pattern. Their only debts being a house and car. Shame I am unable to say the same about the Grandkids ranging from 17 to 37. They want the lot NOW, 2 of them have standing orders to my bank account,  paying back money that bailed them out of credit card debt. Yes, I feel sorry for the younger generation,  but a lot of their suffering is of their own making. If you can not afford it, wait until you can  !

Well said, artificially low interest rates have made people complacent/cavalier with their borrowing, borrowing way beyond their means.

With interest rates rising, even though they are still low, these people are going to be in for hard times.

Is this solely their fault, no, there are many contributing factors, some of their own doing, some of the government's doing, and some of the bank's/lending company's doing.

But ultimately people have to take responsibility for their own action/finances.

I'm about to buy a new to me car, I'm not even thinking about getting it on tick, I'm going to buy the best I can afford, from the money I think I can spare. So no debt. 

[Rem260]

47 minutes ago, Westley said:

Like the above posts I too had my first mortgage in 1967. We spent the first 12 months of marriage living with In-Laws, which enabled us to save the deposit on a house. We filled it with mainly second hand furniture. The only 'debt' we had was the mortgage. 12 months later and we had the first child, so we now relied upon just a single income. Yes we struggled, ate so many pigeons, rabbits and wildfowl in season, BUT we still only had the mortgage debt. I did not see a need to cover my body in artwork that resembled the Walker Art Gallery and cost about as much to obtain. I was not paying extortionate amounts to have the latest mobile phone, or in excess of £1000 for a blooming electric bike. I had no need for the latest computer game (or the availability) I tended to fall asleep in an armchair after a hard day at work. If we could not afford to buy something for cash, we did without. Both of our Parents helped out with various things, food included and used household goods. I have NEVER been out of work since 1961 and when I joined the Police in 1974, I was having to do a second job just to survive . My 2 Daughters, both now in their 50's have followed on with a similar life pattern. Their only debts being a house and car. Shame I am unable to say the same about the Grandkids ranging from 17 to 37. They want the lot NOW, 2 of them have standing orders to my bank account,  paying back money that bailed them out of credit card debt. Yes, I feel sorry for the younger generation,  but a lot of their suffering is of their own making. If you can not afford it, wait until you can  !

Exactly this. People have been maxing out their credit for decades as the want everything straight away. Then blame the credit companies for allowing them to do so when times are bad.

[Agriv8]

my work put me in touch with investment bods who's job is to look at a 5 10 and 15 year view when all 3 projections started to look bad fixed mortgage at low rate for 10 years with 11 left to pay !

we keep life simple not got cars on the never never we don't try and keep up with the jones' small house but its a roof and its warm and we can afford to run it.

starting to make saving where possible as weekly shop id going up and the gas and electricity is going up.

clay shooting will have to be cutback but kids and family come first !

Agriv8

 

 

[Westley]

Yes, I have baled out 2 of the Grandkids, BUT, I made them arrange an affordable standing order monthly, in an effort to teach them that there are consequences to the 'must have it now' syndrome   !

[Bigbob]

My daughters just bought £250,000 house going on maternity leave is she worried about a 30 mortgage no as much as i am for her it seems 

[100milesaway]

Tesco bank,2 year fixed savings account, 4.67 interest paid monthly.Best rates I have found this month.from Auntie.