Mortgage Interest Rates

[pavman]

Just got a letter my mortgage rate is going up again

 

BOE have not put up their rate and when I phoned to find out why mine had not gone down with the last drop and has now gone up without a general increase surprise surprise I cant get a straight answer

[Mungler]

You heard it here first:

 

http://forums.pigeonwatch.co.uk/forums/ind...30&start=30

 

Hold tight

[al4x]

Just got a letter my mortgage rate is going up again

 

BOE have not put up their rate and when I phoned to find out why mine had not gone down with the last drop and has now gone up without a general increase surprise surprise I cant get a straight answer

 

 

what kind of mortgage are you on? it shouldn't be possible unless you have reached the end of a fixed term rate. Mine tracks but is set at a fixed rate above base so unless base changes it doesn't alter

[Maiden22]

Pavman, I'm an IFA (dealing mostly with investments) and I think that this is something that we're going to have to get used to I'm afraid. Banks have been lending too cheaply for too long, on the back of credit markets awash with cash, rising asset (house) prices, and the fact that they have been able to get liabilities off their balance sheets by packaging up the debt and flogging it off to myopic mugs (or sophisticated financial institutions, if you prefer).

 

Banks have got a lot of balance sheet repair work to do, and they are also going to be a lot more concerned about whether people are able to actually pay back their loans - something they haven't given too much thought to for the last few years. In a wider context, credit markets have finally come to their senses and have begun pricing risk properly, as shown by dramatically widening spreads between government and corporate bonds.

 

As for interest rates, they are widely predicted to be heading north over the short term. Latest CPI figures show inflation at 3.3%, a full 1.3% over the BoE's target of 2%. As I've said on here before, CPI is a joke for most people, and the true rate of inflation is much higher still.

 

The BoE is in a very tricky position now. It has rising inflation and a slowing economy to contend with, which raises the spectre of stagflation - high inflation and low growth. A further complication is that a lot of the inflationary pressure is not domestic in origin.

 

There is a seemingly endless flow of bad news from banks at present - when share prices drop through the rights issue price, this is definitely what Sellars and Yeatman would call A Bad Thing.

 

Over the short term, credit is very likely to get more expensive, and the BoE will be able to do very little about it.

 

Robert

[pavman]

Pavman, I'm an IFA (dealing mostly with investments) and I think that this is something that we're going to have to get used to I'm afraid. Banks have been lending too cheaply for too long, on the back of credit markets awash with cash, rising asset (house) prices, and the fact that they have been able to get liabilities off their balance sheets by packaging up the debt and flogging it off to myopic mugs (or sophisticated financial institutions, if you prefer).

 

Banks have got a lot of balance sheet repair work to do, and they are also going to be a lot more concerned about whether people are able to actually pay back their loans - something they haven't given too much thought to for the last few years. In a wider context, credit markets have finally come to their senses and have begun pricing risk properly, as shown by dramatically widening spreads between government and corporate bonds.

 

As for interest rates, they are widely predicted to be heading north over the short term. Latest CPI figures show inflation at 3.3%, a full 1.3% over the BoE's target of 2%. As I've said on here before, CPI is a joke for most people, and the true rate of inflation is much higher still.

 

The BoE is in a very tricky position now. It has rising inflation and a slowing economy to contend with, which raises the spectre of stagflation - high inflation and low growth. A further complication is that a lot of the inflationary pressure is not domestic in origin.

 

There is a seemingly endless flow of bad news from banks at present - when share prices drop through the rights issue price, this is definitely what Sellars and Yeatman would call A Bad Thing.

 

Over the short term, credit is very likely to get more expensive, and the BoE will be able to do very little about it.

 

Robert

 

Robert why do banks take it out on the good paying customers when others default, I guess its the same with every thing else because they can?

 

I am way way ahead of my taget repayment and have never in over 20 years and 3 houses missed a payment or ever paid late yet get treated as if I had???

[vole]

I have a large one. 20 years to go on it too. Like many I chipped into the equity to help get us out of tight spots. We wanted to move house last year as we need a bigger back bedroom but bottled out as the estate agents cut would have been 10k and we like this area.

I have a sum set aside from a re mortgage and hope to extend our little link detached and hope this is still a good idea. This financial gloom scares the Bejasus out of me and I try not to think about it.

[al4x]

Robert

 

Surely if Pav's bank is increasing its Variable rate then he is on the wrong mortgage product?

 

I know with mine its a fixed rate above the bank Of England base rate so they cannot just increase the rate. Lending has been done too cheaply but are some of the bigger names just milking the situation and trying to recover losses they have made abroad from the good old UK who just seem to keep on paying

[Dr W]

Robert, on a side issue how do you go about self certifying a mortgage? My sis is having a difficulty getting a mortgage due to her other halves work.

[Maiden22]

Pavman, I'm an IFA (dealing mostly with investments) and I think that this is something that we're going to have to get used to I'm afraid. Banks have been lending too cheaply for too long, on the back of credit markets awash with cash, rising asset (house) prices, and the fact that they have been able to get liabilities off their balance sheets by packaging up the debt and flogging it off to myopic mugs (or sophisticated financial institutions, if you prefer).

 

Banks have got a lot of balance sheet repair work to do, and they are also going to be a lot more concerned about whether people are able to actually pay back their loans - something they haven't given too much thought to for the last few years. In a wider context, credit markets have finally come to their senses and have begun pricing risk properly, as shown by dramatically widening spreads between government and corporate bonds.

 

As for interest rates, they are widely predicted to be heading north over the short term. Latest CPI figures show inflation at 3.3%, a full 1.3% over the BoE's target of 2%. As I've said on here before, CPI is a joke for most people, and the true rate of inflation is much higher still.

 

The BoE is in a very tricky position now. It has rising inflation and a slowing economy to contend with, which raises the spectre of stagflation - high inflation and low growth. A further complication is that a lot of the inflationary pressure is not domestic in origin.

 

There is a seemingly endless flow of bad news from banks at present - when share prices drop through the rights issue price, this is definitely what Sellars and Yeatman would call A Bad Thing.

 

Over the short term, credit is very likely to get more expensive, and the BoE will be able to do very little about it.

 

Robert

 

Robert why do banks take it out on the good paying customers when others default, I guess its the same with every thing else because they can?

 

I am way way ahead of my taget repayment and have never in over 20 years and 3 houses missed a payment or ever paid late yet get treated as if I had???

 

I don't deal with mortgages, so I can't really comment on the situation. In general though, they aren't going to differentiate between good and bad customers, just the way it is unfortunately. They may have got themselves into even deeper trouble than we realise at present, and who are they going to get the money from? One fund manager that we use a lot and really knows his onions has predicted a second round of rights issues, so the situation could get a lot worse before it gets better.

 

It could be worse. A new client came to see us recently to sort out her affairs. It emerged that she worked for Lloyds TSB for many yearsand had accumulated a lot of their shares. Obviously we told her that holding a large number of shares in one company is very risky etc, but regrettably she came to see us a little bit late. Lloyds TSB shares are worth just over half what they were two years ago.

 

On a (slightly) more positive note, if you want to shop around, I think having a good record is going to be much more important than it has been. The days of 125% LTV No Questions Asked are over for a good while, so a good record could be a valuable thing.

 

Robert

[Maiden22]

Robert

 

Surely if Pav's bank is increasing its Variable rate then he is on the wrong mortgage product?

 

I know with mine its a fixed rate above the bank Of England base rate so they cannot just increase the rate. Lending has been done too cheaply but are some of the bigger names just milking the situation and trying to recover losses they have made abroad from the good old UK who just seem to keep on paying

 

 

Robert, on a side issue how do you go about self certifying a mortgage? My sis is having a difficulty getting a mortgage due to her other halves work.

 

As above, mortgages are practically the only thing we don't deal with, so I can't help I'm afraid.

 

al4x, we have got a similar deal, partly because we thought that there may well be a disconnect between base rate and the rates actually charged.

 

As for milking it, well that's nothing new as we all know. But I do think that it goes deeper than that - this is more serious than simple profiteering.

 

Robert

[al4x]

DrW I was almost needing to go self cert but my bank has a process of looking through your account to gauge what they will lend you I had heard about it so put plenty of money through the account in the 2 months before going in and hey presto I was pre approved to rather a high level. Obviously she needs to be able to make the repayments but in my case it was so I could get the mortgage in my name while two of us lived there to give us the option of buying a property in my other halfs name if a good renovation property came up.

[Dr W]

Cheers for info.

 

They can afford the repayments but it's proving a track record also not helped by the fact she almost died of menigitus a few years ago so husband didn't work for 8 months while he looked after the kids and nursed her back to health, they lived on savings but it's a bit of a financial black hole for them.

 

told her to have a word with citizens advice, I just want her to get out of her grotty council house (as it's in Moss Side) and onto the property ladder and get some financial stability.

[tweedledee]

i`m coming of a 5 year fixed deal.hoping to dive into another 5 year fixed rate this month .i know the payments will be up.scared to know how much.not too worried as folk have more expensive cars than my house.my dad gave me the site and i built it 10 years ago when things were`nt too expensive. half way there.

[J@mes]

i`m coming of a 5 year fixed deal.hoping to dive into another 5 year fixed rate this month .i know the payments will be up.scared to know how much.not too worried as folk have more expensive cars than my house.my dad gave me the site and i built it 10 years ago when things were`nt too expensive. half way there.

 

 

I come to the end of a 2 year fixed rate in July and have recently remortgaged.

 

I borrowed an extra 10% to buy out my ex (still within the value of the house) but due to the rate rise my payments have gone up 30%. :unsure: