BOE Increases Interest rates

[Guest]

If you believe the commentators this is only the start - they are suggesting we will be at around 2% by the summer, which is still historically low (the average over the last 50 years is around 5%)

[Bluefish]

Originally Posted by Clare

Sorry probably could be better worded but I should have put 'per £100k'. I live in quite a comfortable area and for a large percentage in my area it will be, at the current rate, OK, but there will be people, particularly the young couples/families who have paid the ridiculously inflated prices to live here (for the schools/London commuting) who will be impacted significantly. More so if the rumour of another rise in early 2018 comes to fruition.

I have friends who are mortgaged to such an extent that this rise (probably around an extra £100 a month) will hurt and they will have to make choices of where that extra money will have to be shaved. On the other hand I have friends who are typical middle England suburbia and won't even bat an eyelid.

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That would have to be one heck of a mortgage, to have gone up by £100 per month and would question how on earth they would manage at the next rise.

[BoxOfFrogs]

Our mortgage is £200k but i figured if i fixed it they would want a couple of extra percent on my tracker rate, listening to the clever people who say it could rise a couple of percent, made little sense for me to fix it, but I could be wrong

[Clare]

Originally Posted by Bluefish

That would have to be one heck of a mortgage, to have gone up by £100 per month and would question how on earth they would manage at the next rise.

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Exactly, unfortunately they are self employed/contractors- when times are good they are very good but they have the live for today mentality meaning when work is a bit lean they have not saved for a rainy day so to speak.

[Loftus]

Originally Posted by Guest

If you believe the commentators this is only the start - they are suggesting we will be at around 2% by the summer, which is still historically low (the average over the last 50 years is around 5%)

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Depends what commentators you look at I guess. I've seen ones predicting no further rate rise until the end of next year and rates peaking at 2% by summer 2021.

[pennycrayon]

I’m a young a person who bought our family home last year, we are on a fixed rate and it would be irresponsible for anyone to buy a house and not take into account rate increases when taking out a mortgage. Our advisor was really responsible following government guidelines to talk through affordability to ensure we could financially manage if/when rates went up.

We bought a house at far less than we could do based on our salaries (helps we live in NE England but we do live in an expensive high demand area), it would be very short sighted to not see this coming at some point.

[ERICSMUM]

Originally Posted by Shani

I assumed the £ would get stronger with a rise, but it doesn't seem to be working that way!

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I suspect a rise was already priced into exchange rates.

[Guest]

Originally Posted by pennycrayon

I’m a young a person who bought our family home last year, we are on a fixed rate and it would be irresponsible for anyone to buy a house and not take into account rate increases when taking out a mortgage. Our advisor was really responsible following government guidelines to talk through affordability to ensure we could financially manage if/when rates went up.

We bought a house at far less than we could do based on our salaries (helps we live in NE England but we do live in an expensive high demand area), it would be very short sighted to not see this coming at some point.

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You have a very sensible approach. Good for you.

[RachaelC]

Originally Posted by ERICSMUM

I suspect a rise was already priced into exchange rates.

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That's what I thought but the rate fell, so surely if it was priced in there wouldn't be any movement

[Stitch & Smudge]

Originally Posted by RachaelC

That's what I thought but the rate fell, so surely if it was priced in there wouldn't be any movement

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The BOE has said that interest rates will continue to increase over the next few years but slower than the analysts anticipated. This is what caused the pound to drop rather than rise.