Why Haven't Mortgage Payers Factored In The Possibility Of Mortgage Rates Going Up To 7%?

[dave50]

The ultra low rates of the past 15 years have always been unrealistic and unsustainable, they were always going to rise eventually.

[ToraToraTora]

Who says they haven't?

[FatticusInch]

Pink and hairy, not crystal?

[dave50]

A lot haven't according to reports.

[MissTerious]

Just thinking going about the days when our mortgage rates rose to toan average of 13% and we just has to put up with it. We got no help back then. We just carried on, Dave is right! This was bound to happen.

[pastafreak]

Fortunately my daughter and her partner locked in their rates a few months ago. They were talking about rates going up earlier in the year.
Low rates are all some have known and preparing for them to go up may have been controlled by what they expected future earnings to be. No one expected the crisis we've ended up with.

[gingejbee]

...perhaps they should have factored in the possibility of 10% or 15% or 18% or....

[jno]

yeah, ginge why haven't people factored in the possibility of lunatics taking over the asylum? How could they not see this coming?

[ichkeria]

That's why people take out fixed rate mortgages.

[pimplyteen]

Having a mortgage is a bit of a gamble but its always been a better gamble than throwing money away for years on rent and have nothing to show for it. The problem for many that have taken out mortages in the past is they stretch there income to the max to buy the biggest house they can instead of working their way up the ladder slowly. The same with car purchase buy the biggest and most expensive. If every penny you earn is spoken for every month you can soon find yourself in trouble sooner or later.

[jno]

I would advise not taking out a mortgage at all because Labour are going to get into power and abolish private property.

[sp1814]

Ono

Really?

Wow...that's terrifying. Where did you see that? Are you thinking of the plan to abolish private schools by removing their charitable status?


dave50

No-one would've expected so many issues to arise at the same time.

The cost of living crisis
Fuel crisis
The Ukraine
Brexit
Truss and Kwarteng raping the £

[jourdain2]

I don't know why, is the answer. I'd have thought it was a normal thing to do. When we took out our 1st mortgage in June '74 it was at about 3.5% and we factored in a rise of up to 6.75%/7.5%. Somewhat unfortunately for us the petrol crisis hit and we all know what happened to interest rates!!! Since we'd moved area to buy the house (husband's job) I became unemployed and (with a secure home - we thought) also became pregnant with sprog No.1.

When inflation hit 18% or so and brought subsequent interest rates I'd rather forget, we got on with survival. Hand-washing nappies and bedding, no carpets etc., parents' old blackout curtains. Growing food in every square inch of small garden. We survived. (Made our own beer and wine too - very nice.) TV??
I did warn my offspring, but I don't think they listened. They still seem to afford things I could only dream of (like a car).
You can't put old heads on young shoulders is probably the answer.

[New Judge]

//...why haven't people factored in the possibility of lunatics taking over the asylum?//

I'm afraid the people who have been running the asylum for the past 20 years are the lunatics. Their programme of printing worthless money, supported by ultra-low unrealistic interest rates has finally hit the rocks. The plan to keep the population in the manner to which it has become accustomed whilst the country does not earn the money the B of E keeps printing has finally been uncovered. Ms Truss and her Ministers need to hold their nerve against the hysteria that has engulfed them. It will die down and the big reset will eventually bear fruit.

[LadyCG]

I have a 1.5% fixed rate mortgage at £883pm. If interest rates hit 7% I could be paying >£1,400pm. We currently pay my in-laws £750pm on a £55k loan. We have scope to lower the repayments but would rather not. But we can.

We also spend too much money on shopping, eating out, etc. We could easily shave £400+ off unnecessary monthly spending. Needs must.

I have 5 months to run on my current mortgage and don't know whether it's even worth trying to speak to our Mortgage lender or any other Mortgage lender at this point in time.

Has anyone managed to lock in a fixed rate 5 months before their current deal ends? Any words of advice would be much appreciated.

[237SJ]

I agree with the post at 18:22.

[CrapAtCryptics]

I remember between 88-91 having to contend with 15.5% and 16% taking my entire wage. Luckily my wife had a reasonable wage and access to a bit of overtime so we just got on with it.

[pastafreak]

Ex and I moved to the UK in August '89. His mother had said property was cheap...blah...blah. Interest rates were skyrocketing just as we were buying our first house here. That and the shrinking value of the exchange rate meant we got very little for our money.

[sp1814]

On Question Time last week a young woman (first time buyer) was told initially that her interest rate would be 4.5%. Then after Truss and Kwarteng set about screwing up the pound, she was told the rate would be going up to 10.5%.

[Paigntonian]

It is in our nature to hope for the best and then be disappointed when bad things happen.

[New Judge]

I'm the reverse (especially when politicians are involved). I expect the worst and am pleasantly surprised when my expectations are not met.