Interest rate rise.

[MrPT]

It is significant because it’s an inflection point. That and the fact that it reminds us of the weird relationship between the government and the Bank of England when it comes to fiscal controls.

It isn’t significant because it’s going to make a net material difference to most people. Lots of nonsense in the mainstream press, who shy away from some big economic issues (e.g. employment and productivity going in opposite directions for years) because it doesn’t sell papers.

I remember the good old days when forgetting to top up your ISA literally meant pissing money out of your arse.

 

[Steely]

For the ever growing number of people who have little to no expendable cash, any additional outgoing can be a burden, think yourself lucky that for you it’s just a few quid a month!

 

[Crazy Harry]

Too right.

Perhaps my generation was lucky not to have had social pressures driving our spending to the extent we see now. No mobile phone or other tech to keep up with; shops only open five and a half days a week. No petrol available on Sundays (life was hard in the 'sticks'). No social media so you could see what friends were doing or had. You got lunch from your butty box and flask - or if you were in a big firm a subsidised canteen serving a 'school dinners' type menu. No impulse buying and credit very hard to get - I think the only credit I could get was from the bank/building society or from our Co-op for coal deliveries.

If you did get a house you had to fill it with furniture your relatives were throwing out until you could work round and afford new furniture room by room. It didn't matter because we were all the same. Something happened to the way we spend during the last twenty years with manufacturers convincing us we need to keep changing/renewing and even building in obsolescence by using glues that stop being sticky after a given period.

The prolonged interest rates have convinced people that the world is stable and its not. I do feel for people in that bottom 15% because I can't see a way out for them. For the rest of us we made decisions about how to spent and what our priorities were/are. If you want to see the next crash coming start reading about 'sub prime' car loans and the default rate (particularly in the US as with mortgages). These loans have been bundled and sold as investments - when they start to snatch back cars the market will be flooded and this will damage car manufactures; banks who purchased the bundles not to mention the loan defaulters.

I can only hope I've had more influence on my kids than social media and at least they will consider the consequences before spending.

 

[firebobby]

No mortgage now, but we had it hard in the 80's 90's with mega high interest rates. Been there and got the Tee shirt. I find a lot of people these days have to have new cars on the drive and new furniture in the house, must have holidays abroad too. We only had a mortgage loan, no credit cards, £10 Sun holidays if we were lucky and worked bloody hard... 5 jobs between us. If we couldn't afford something, we went without. Yes money is to easy to borrow these days, but no one makes you borrow

 

[Taz]

will I now make millions more on my savings?

 

[85genius]

will I now make millions more on my savings?

millions and millions

 

[PerryGunn]

will I now make millions more on my savings?

millions and millions

of Iranian Rials...

 

[buzyg]

will I now make millions more on my savings?

millions and millions

of Iranian Rials...

Had to check... 0.000022 British Pounds to the Rial today.

 

[ric19]

Dispatches did a programme a few months ago saying that this PCP lark was a bubble waiting to burst..the premise was that if interest rates go up and it's a choice of paying the mortgage or the car loan it will be the car going back..and the dealers will be left with a load of nearly new cars on the forecourt they can't shift.. this article says the same

http://uk.businessinsider.com/statistics-uk-bank-exposure-pcp-car-finance-debt-2017-7

 

[Gaffa22]

My fixed rate was up next month so I signed up a 5 year fixed rate a couple of weeks ago so I'm laughing all the way to the bank

 

[MrPT]

will I now make millions more on my savings?

millions and millions

...and billions and billions

[youtube]u_aLESDql1U[/youtube]

 

[Havard]

My fixed rate was up next month so I signed up a 5 year fixed rate a couple of weeks ago so I'm laughing all the way to the bank

Presuming you only have 5 years left on your mortgage and the rates don't jump massively over the next 5 years.

I have to laugh at the modern approach to money. I never buy anything I can't comfortably afford and wait till I have the cash. Lending money, even a mortgage can be very expensive of you don't know what you are doing. Having flexibility and paying what you can is everything. The numbers don't lie.

H

 

[Smartbear]

My fixed rate was up next month so I signed up a 5 year fixed rate a couple of weeks ago so I'm laughing all the way to the bank

Presuming you only have 5 years left on your mortgage and the rates don't jump massively over the next 5 years.

I have to laugh at the modern approach to money. I never buy anything I can't comfortably afford and wait till I have the cash. Lending money, even a mortgage can be very expensive of you don't know what you are doing. Having flexibility and paying what you can is everything. The numbers don't lie.

H

Did you save up & pay cash for your house?
That’s quite an achievement!
Rob

 

[Havard]

My fixed rate was up next month so I signed up a 5 year fixed rate a couple of weeks ago so I'm laughing all the way to the bank

Presuming you only have 5 years left on your mortgage and the rates don't jump massively over the next 5 years.

I have to laugh at the modern approach to money. I never buy anything I can't comfortably afford and wait till I have the cash. Lending money, even a mortgage can be very expensive of you don't know what you are doing. Having flexibility and paying what you can is everything. The numbers don't lie.

H

Did you save up & pay cash for your house?
That’s quite an achievement!
Rob

Yes Rob. I bought my first house at 55, after living in a shop door way until then. It's a false economy otherwise...

On a serious note, a mortgage is the only lending I have ever taken out in my 43 years on the planet. Unless life means that you have no option but to borrow money then I understand. My main reference was to extravagant purchases, sports cars, named brand clothes, holidays, even nights out. I just see so many people without the patience to save up and also are unaware of the vicious circle of debt they are getting into with interest charges and tie ins etc.

I am lucky enough to live mortgage free at 43 but I have always put paying off as much of my mortgage to the top of my list when I could afford to. I don't feel that we have missed out on a great deal, maybe a couple of holidays, a newer car in years gone by but the kids have wanted for very little.

I was shocked when borrowing £150K, just how much you actually paid back over 25 years. Shortening the payback period by a few years can save you thousands and you don't miss the money month to month as long as you can live within your means. I know at no point in my life I could hand over £40-50K to anyone...

H.

 

[Gaffa22]

My fixed rate was up next month so I signed up a 5 year fixed rate a couple of weeks ago so I'm laughing all the way to the bank

Presuming you only have 5 years left on your mortgage and the rates don't jump massively over the next 5 years.

I have to laugh at the modern approach to money. I never buy anything I can't comfortably afford and wait till I have the cash. Lending money, even a mortgage can be very expensive of you don't know what you are doing. Having flexibility and paying what you can is everything. The numbers don't lie.

H

I only have a small mortgage, and have never had anything else on finance that couldn't have paid cash for, but if offered interest free credit I take it and keep my cash invested.
I used to be a financial advisor so know what I'm doing
You're right the numbers don't lie but you can use them to your advantage.

 

[andyfanshawe]

Gonna seriously gloat here!!! And be a bit selfish lol!

My mortgage paid off 3 years ago, no debts, no credit cards etc, so don't care!!

But, I can certainly remember when interest rates were a lot higher (10 years ago +) when we were paying a mortgage, and any interest rate rise caused an initial concern/worry for us, especially with 2 kids, But it was soon forgotten about (direct debit anyway) and life went on. As it will now, and as it always does.

Saying all, that......interest rate rise......Ha!

andy.

 

[Z4M-2006]

Im similar in that i cleared my Mortgage at 39,it felt like a millstone around my neck..... Interest rates averaged 5-6% over my term of payment,which roughly meant that for every £1 borrowed you paid paid £2 back,i didnt like that..

I also borrowed money for a brand new Honda Fireblade is 1999,it was a spur of the moment purchase after getting a new job with better pay... I regretted it quickly,sold the bike after 12 months and cleared the borrowing.



People are so different now,they want everything NOW.....But dont actually own anything,they would prefer to rent a house,PCP a car and borrow to go on holidays..

It may be a smart approach,live life whilst you can,no pockets in a shroud etc etc.... But i just see it as working until you die on the job because you have put yourself in the position that you have to...

 

[Nanu]

For quite a few years now we have had an offset mortgage with Santander which is just about to go up from 1% to 1.25%. interest (No longer available)

Even so we hopefully in the next few days will be getting approval to double our mortgage with them from £40k to £80K and very happy to do it. The reason is simple, the money goes straight into our savings side of the offset account with Santander which effectively also gives 1.25% interest (In my wifes name who does not pay any tax). The bonus is we pay out monthly payments of £800pm from our Santander 123 account which gives us cash back for paying Santander their own money.

A crazy situation but as long as they pay us to pay them we will take it. Unfortunately they won't lend us any more than £80K or we would take it.

 

[Havard]

My fixed rate was up next month so I signed up a 5 year fixed rate a couple of weeks ago so I'm laughing all the way to the bank

Presuming you only have 5 years left on your mortgage and the rates don't jump massively over the next 5 years.

I have to laugh at the modern approach to money. I never buy anything I can't comfortably afford and wait till I have the cash. Lending money, even a mortgage can be very expensive of you don't know what you are doing. Having flexibility and paying what you can is everything. The numbers don't lie.

H

I only have a small mortgage, and have never had anything else on finance that couldn't have paid cash for, but if offered interest free credit I take it and keep my cash invested.
I used to be a financial advisor so know what I'm doing
You're right the numbers don't lie but you can use them to your advantage.

Actually I told a little fib. We bought some furniture at Oak Furniture Land and the total amount came about £150.00 over qualifying for interest free credit. It was offered to us as I was just about to pay. Instead of £3500 out of the bank we ended up with £152 a month and no interest payments so why not....