Bank Interest Rate Hikes

Mike

Mike

Well-known Member
Location
London
We are being hit with these, several times recently, I hope
that you are not suffering the same, somebody is forecasting
6% here soon.

These increases are causing hardship to many people, mainly
mortgage holders, because their repayment keep increasing.

This is a puzzle to me, I can understand, new deals, having to
pay the higher rate, but one that was agreed 20 or 30 years
ago, should be paid back at the rate of the time that the deal
was agreed, why are historical deals being affected by modern
Interest rate increases.

I might be wrong and maybe there is a real reason for this, in
my opinion, it is a greedy move by the money lenders.

Am I wrong? What do you think.

These increases do not affect me, yet, I live in a rented flat that
is owned by a company that used to be a charity and the CEO,
is a woman, who seems to be fair, yes my rent increases every
year, but it is manageable, not like the young people who are
trying to buy their home.

Mike.
 

Alligatorob said:
Historically 6% isn't too bad, most of my mortgages were higher. I never had an adjustable rate, but in those days it didn't much matter.
Click to expand...
6% is a good low percentage number Alligatorob, but it depends
on the starting number, here in London the house prices vary by
a lot a 2-bedroom apartment in, London N13, is £170,000, but in
Brentford, West London TW8 the same type of flat is, £575,000,
so 6% is massif in one place and less in another, both will be high.

Mike.
 
Lets look at it from the other side. For years we have received a derisory interest rate on our savings. Now at least we are getting something - even if it is way below the rate of inflation. We've put what we can into ISAs and fixed bonds which should help to offset the rise in costs..
 
The low interest rates since the 2008 economic collapse have inadvertently been key factors in real estate and wage inflation including the rise of REITs and other financial industries unfairly preying on the rest of us, widening the wage gap and causing much homelessness and associated societal pain.
 
At the start of the 1980's the interest rate was a shade under 18%, that was painful. But as the interest rates started to fall my wife and I continued paying as much as we could until the mortgage was paid off. We haven't had a mortgage or any other debt in forty years Historical UK Interest Rate Chart. It certainly taught us to cut our cloth accordingly.

​

 
Paid off my mortgage back 2016. Bank kept hassling me. Telling me I had to much in savings and to invest it in their offerings.

Decided to invest in myself and paid off the mortgage. No regrets.
 
When we bought our first house in 1973, the amount of mortgage you could get was usually 2 x main salary + 1 x second salary and you needed a 10% deposit. The now Mrs.L and I saved towards this and bought a modest new build semi which was completed shortly before we got married. I can't remember the mortgage interest rate, but I suspect it was 6 or 7 %.

Recently our elder daughter went house hunting and saw a mortgage adviser. When she questioned the possible impact of higher interest rates, the adviser was pleased as apparently few people took this into consideration. They wanted to know how much they could borrow, not how much they could afford.
 
The luck of our generation. When we were starting out, interest rates were 18 to 22% for a loan. At that time we had very little in the bank. Now, with rates low, we don't need a loan and we make no money on our bank accounts. It did teach us discipline though.
Young people complain about 6%? Phhtttt. Learn like we did.
 

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