Interest Rates Up Again!!

[Southminster_Shrimper]

Well, yes it will. It might be that people who "own" their own home, have borrowed against the equity it to make home improvements, eg conservatory, extension, loft conversion, etc. With interest rates so low, at one point, and the house equity now accomodating of the borrowing they might have taken the plunge. On the face of it, it would like quite easy to add £20k to your mortgage as the repayment over a potentially long term would be tiny compared to a personal loan (except if you look at the interest you pay on the money that is).

Higher interest rates wont just damage the first time buyers. Infact, I would say that house prices put that category off rather than higher interest rates.

For me, I am just trying to pay off extra a month from my mortgage so that any future rises in interest rates are less damaging. I do wonder what the interest rate will be when my current fixed rate expires in a year or so.

 

[Holy Joe]

For me, I am just trying to pay off extra a month from my mortgage so that any future rises in interest rates are less damaging. I do wonder what the interest rate will be when my current fixed rate expires in a year or so.

Currently I think the 'market' is expecting rates to be 0.5% lower by end of next year.

 

[Southminster_Shrimper]

Wahoo.....now that would be nice! :D

 

[londonblue]

For me, I am just trying to pay off extra a month from my mortgage so that any future rises in interest rates are less damaging.

Same here. At the end of each month, anything "left over" is used as an overpayment on the mortgage. I even have a spreadsheet that shows my payment schedule, and the effect each overpayment has on the total mortgage. I have even added something that shows the amount I have paid, and the amount that has saved me. That spreadsheet really keeps me motivated to keep making overpayments.

 

[SARF]

Currently I think the 'market' is expecting rates to be 0.5% lower by end of next year.

'Our' in house conomists have 'changed their minds' this week and are now gonig for a cut this year! and another before May.. Unfortunatly due to sub prime/credit crunch issues the Interbank lending rate is 1/2 a per cent higher than it should be.. these cuts will merely erase that.. Also expect the lending criteria to be a bit tighter except from Northern Rock who are of course funded by the taxpayer so will probably lend you 150% of the value of your house ;) ..

 

[DTS]

I went to a talk at Barlcays HQ in Canary Wharf on Friday and the guest speaker was Barclays top economist who sets the rates for Barclays.

He said that he felt that rates would go down in the short term but would rise later next year. There is basically no money in the market at the moment and therefore lenders that can get there hands on cash are expected to charge a premium for it - Similar to when we have the petrol problems.

We are set for a really tough six months now with normal levels of lending expected to return to almost normal by Q3 2008.

 

[Holy Joe]

Currently I think the 'market' is expecting rates to be 0.5% lower by end of next year.

I should clarify that I meant Bank of England base rates not Mortgage rates although the 2 tend to be correlated.

 

[Holy Joe]

'Our' in house conomists have 'changed their minds' this week and are now gonig for a cut this year! and another before May.. Unfortunatly due to sub prime/credit crunch issues the Interbank lending rate is 1/2 a per cent higher than it should be.. these cuts will merely erase that.. Also expect the lending criteria to be a bit tighter except from Northern Rock who are of course funded by the taxpayer so will probably lend you 150% of the value of your house ;) ..

There are currently 5 (out of 33) economists predicting a rate cut at the next meeting in Nov. All the others are going for no change.