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Increasing the interest rate to 5%, is this really the fairest way to slow inflation?

(416 Posts)
foxie48 Thu 22-Jun-23 18:35:32

I will not personally be affected as we paid off our mortgage years ago and don't have any debts but I am so worried about how this will affect so many families and young people who are already struggling. A divorced friend has been trying to sell her house as the children have moved out and she no longer gets maintenance. She is really struggling to pay her mortgage but despite reducing the price of her home, she still can't sell. She's been selling belongings to make ends meet. I'm sure she's representative of lots of people and they are not the people who should be targeted, it's people like me! Mortgage free, decent pension, savings, with the ability to soak up extra costs. What do others think?

DaisyAnneReturns Sun 25-Jun-23 18:15:55

M0nica

I have said it before and I will say it again. Every older generation considers that the younger generation are wasteful spendthrifts. It happened in my generation and my son's and no doubt my parent's and grandparent's.

In fact I have a 19th century book which is bound copies of a woman's magazine, and I remember reading an article there on a similar theme. In every generation and every age group, some people are spendthrifts and others are misers.

Our standards of what is acceptable changes. When we bought our first house, central heating was an optional extra. Now no house would be built without it. I am sure at some time inside wcs and bathrooms were considered an unwarranted luxury.

Agreed.

Those who suggest the "I'm right, everyone else is wrong" explanation for all our problems are either arrogant or ignorant. Perhaps those are better words to use than the over-simplistic "rude".

You are right, though, that it was forever thus, and of course, ignorance is forgivable. But is it so wrong to think there are times when intelligent people should be wise and polite enough to avoid treading on others' views of how they want their lives?

Norah Sun 25-Jun-23 18:19:42

Germanshepherdsmum

100% mortgages caused huge problems for many. They started with no equity and their mortgage debt quickly rose to more than they had borrowed. They gambled on a sufficient rise in house prices staving off negative equity. As for those who borrowed 110% - it should never have been allowed, but it was.

Indeed.

Borrowing the very least one can, buying the least house, and going way under estimates of what 'one could afford' is sensible.

Casdon Sun 25-Jun-23 18:24:08

Germanshepherdsmum

100% mortgages caused huge problems for many. They started with no equity and their mortgage debt quickly rose to more than they had borrowed. They gambled on a sufficient rise in house prices staving off negative equity. As for those who borrowed 110% - it should never have been allowed, but it was.

It’s a different product now though. There’s still obviously a risk of negative equity, but provided a first time buyer is able to find a house which is big enough for the needs of their family and stay there, given that the average age of first mortgage has increased very significantly too, they are much less likely to default. The disparity between mortgage payments and the cost of rental of an equivalent property is also wider than it was, and widening.

DaisyAnneReturns Sun 25-Jun-23 18:35:10

Norah

Germanshepherdsmum

100% mortgages caused huge problems for many. They started with no equity and their mortgage debt quickly rose to more than they had borrowed. They gambled on a sufficient rise in house prices staving off negative equity. As for those who borrowed 110% - it should never have been allowed, but it was.

Indeed.

Borrowing the very least one can, buying the least house, and going way under estimates of what 'one could afford' is sensible.

Interestingly, I believe my sons first home had an over 100% mortgage.

As boasting about how well we or our children have done seems to be part of this thread I would love to show you the home he now has and give you it's value. Obviously I can't as that is his business and not mine and cetainly not the business of those who do not know him.

I do wonder when people will learn that everyone has to live their own lives and you really cannot criticise when you know nothing about those lives. How about just getting on and living your own life instead of being so judgmental?

Norah Sun 25-Jun-23 18:42:28

DaisyAnneReturns

Norah

Germanshepherdsmum

100% mortgages caused huge problems for many. They started with no equity and their mortgage debt quickly rose to more than they had borrowed. They gambled on a sufficient rise in house prices staving off negative equity. As for those who borrowed 110% - it should never have been allowed, but it was.

Indeed.

Borrowing the very least one can, buying the least house, and going way under estimates of what 'one could afford' is sensible.

Interestingly, I believe my sons first home had an over 100% mortgage.

As boasting about how well we or our children have done seems to be part of this thread I would love to show you the home he now has and give you it's value. Obviously I can't as that is his business and not mine and cetainly not the business of those who do not know him.

I do wonder when people will learn that everyone has to live their own lives and you really cannot criticise when you know nothing about those lives. How about just getting on and living your own life instead of being so judgmental?

Well, I tend to not boast on our children's accomplishments as we don't own their accomplishments, I assume you're not pointing to me.

However, when did valid opinions become judgmental?

Everyone is stating opinions. Mine is as stated, sensibly buy and spend the least - less chance to 'get in trouble'.

DaisyAnneReturns Sun 25-Jun-23 18:52:15

You "assume" right. It was a general comment; no one was individually mentioned.

Germanshepherdsmum Sun 25-Jun-23 19:16:53

Just the one home then Daisy? 😊

DaisyAnneReturns Sun 25-Jun-23 19:51:07

You can't stop trying your attempts at one-upmanship can you GSM? Not everyone who invests in property buys other people's homes.

Yet again you think it clever to attack people whose lives you know nothing about.

foxie48 Sun 25-Jun-23 20:00:44

We may not "own" our children's achievements Norah but we certainly contribute to them. If my children don't recognise that they have been "lucky" then I have failed. I don't want them to believe that what they achieve is all due to their talents and hard work, some of it may be but they started with a huge advantage and they need to recognise that and if they do that, they hopefully will realise that they aren't superior to those who started with less of an advantage.

Germanshepherdsmum Sun 25-Jun-23 20:09:45

Just responding to your boast Daisy. My son only owns properties that he occupies. You seem to be attacking him whilst knowing nothing about him.

DaisyAnneReturns Sun 25-Jun-23 20:37:19

Oh please, GSM. You putting unknown, possibly non-existent people down with tales of yours and your families successes based only, we are told, on your own work and cleverness is your signature post. It also allows all who think this way to have a strong sense of entitlement over others.

Thank you Foxie for restoring my faith in what is usually my normality. I agree with your views totally and hope the same for my children.

Norah Sun 25-Jun-23 20:52:15

foxie48

We may not "own" our children's achievements Norah but we certainly contribute to them. If my children don't recognise that they have been "lucky" then I have failed. I don't want them to believe that what they achieve is all due to their talents and hard work, some of it may be but they started with a huge advantage and they need to recognise that and if they do that, they hopefully will realise that they aren't superior to those who started with less of an advantage.

I too think our children have made luck, nothing we've done by quitting school at 16. I hope and pray they don't feel superior to others - no matter any perceived advantage anyone started with.

Germanshepherdsmum Sun 25-Jun-23 21:05:56

My son’s success is not down to me or anyone but him Daisy. Purely hard work. You seem to have a problem with people who work hard to get on in life and are proud to have done so. Perhaps they should just pay their taxes and keep quiet.

DaisyAnneReturns Sun 25-Jun-23 22:29:22

I don't have any problem with hard working people. If I did that would mean I had a problem with with the vast majority.

You come up with that line so often GSM. Can't you think of a new one? All your problems seem to be the other guys fault. I have a feeling that is the definition of a true Conservative, so that should make you very happy.

Germanshepherdsmum Sun 25-Jun-23 22:43:52

I don’t have any problems Daisy. Nothing to blame anyone else for. What a strange thing to say.

DaisyAnneReturns Mon 26-Jun-23 08:34:40

I know you don't feel you have never got anything wrong GSM. However, you, and others on here, do seem to have issues with others you don't know and about whose circumstances you have no idea. Even though that is the case you all seem to feel free to criticise them for not being you (plural).

The outright snobbery of criticising others for, for example, the wearing of nail varnish, is something I thought had died out with increased education. Obviously not.

foxie48 Mon 26-Jun-23 08:36:55

Norah what's a "perceived advantage"?

DaisyAnneReturns Mon 26-Jun-23 08:50:03

don't

Norah Mon 26-Jun-23 09:03:05

foxie48

Norah what's a "perceived advantage"?

No idea - you brought up huge advantage. Our children have had no huge advantages. I merely said "I hope and pray they don't feel superior to others - no matter any perceived advantage anyone started with."

Germanshepherdsmum Mon 26-Jun-23 09:20:06

DaisyAnneReturns

I know you don't feel you have never got anything wrong GSM. However, you, and others on here, do seem to have issues with others you don't know and about whose circumstances you have no idea. Even though that is the case you all seem to feel free to criticise them for not being you (plural).

The outright snobbery of criticising others for, for example, the wearing of nail varnish, is something I thought had died out with increased education. Obviously not.

You don’t ‘know’ any such thing Daisy. Of course I have made mistakes - we all have. All you know about me is what I have posted GN, but you seem to keep a mental note of things I have said which I find very odd. For instance you have accused me of ‘boasting’ that I was once very hard up. That was not a boast, it was a statement of fact made in a particular context, but you decided to retain it in your mind to bring out and twist to suit your purposes at a later date. If anyone has a problem it isn’t me.
Have I ever criticised anyone for wearing nail varnish? No. Twisting words again. Criticised for spending money they can’t afford at a nail bar, yes. That’s very different.

Doodledog Mon 26-Jun-23 10:56:10

I hesitate to get involved in threads about economics, as I am the first to admit that I don't know a lot about it. Probably most people don't, yet these are the threads where posters are accused of all kinds of nastiness simply for disagreeing. I know that politics and economics (along with political philosophy) are intertwined, but sometimes people's views are far more visceral than theoretical when it comes to personal finances, as they are about security and often self-worth, too.

Accusations of 'not caring about the rich getting richer and the poor getting poorer' for instance are hurtful (and I don't buy the 'just letting her have a chance to defend herself' line, I'm afraid grin) and some of the things said about GSM have been entirely unnecessary, too.

I think that most people want a more equal society, but disagree on how that can be achieved, largely based on our own experiences, which will differ. Not knowing (or not agreeing) that if X policy is put in place then Y will happen to Z group of people is not a crime. It can be a lack of knowledge/understanding, or just a different perspective.

I am no shrinking violet and I like a good debate, but like most people I don't like being shouted down or having sarky or unpleasant insinuations made about my motives. I will happily listen to explanations if I am not expected to take them as gospel, and on this topic I am actively willing to learn, as I recognise my own ignorance.

Basically, however, I think that life is not fair. Some people work hard for little reward, some work very little for high rewards, some can't work at all, and some just don't want to. Some are born with lucrative abilities and others are more challenged. Some have wealthy and supportive parents and others don't, and so it goes on.

Those with money want to keep it, which is understandable, just as those who don't want to have more, and that's understandable too. If I have a fridge full of food and someone hungry asks for a meal I will happily cook them dinner and they'd be welcome to bring their friends, but if I am down to my last block of cheese and loaf of bread I will feed my family first, and hope that they would do the same for me.

As Economics is basically about taking from one group and giving to another, much depends on whether, as individuals, our fridges are full or empty. We can all be generous if we have enough to share, but get more protective of our own when we have less, or can see penury on the horizon. Speaking purely for myself, I fear poverty, and have done as much as I can to protect myself from it whist still working to live, rather than living to work. I am far from being rich, however, so I resent the idea that it is 'fair' that what savings I do have (which are all from earned income) have should be taken away by making me pay for things that those who don't have savings will get free. That is a race to the bottom, and I would hit the bottom long before someone with an inheritance or other cushions would do. I fully appreciate that there are many people with less than I have, however, who have had no chance to save. I would very much like to make the 'playing field' more level for everyone, but I also resent having to pay for those who expect to get everything given and 'choose' not to work. My feelings are just that - feelings - based on my own upbringing and particular life experiences, not on Economics textbooks, just as others' feelings will be based on theirs. That doesn't make anyone right or wrong. They are just different points of view.

DaisyAnneReturns Mon 26-Jun-23 10:58:07

Of course your first sentence is true. We do only know what posters tell us and only get impressions of them by how they tell us. That is why, when you told us you had gone through tough times, I felt for you. When you said or implied you climbed out of it with no help whatsoever (until I mentioned your previous comments), I was even more sad as, either you had been very alone or you had not recognised those who did help you.

You are surprised I remember, but you do tell us much and often. And you should be proud. I love it when I hear about women who have taken up extra education later in life. Many didn't have the same opportunities earlier on and I would plaster their pictures everywhere as inspiration for others.

However, it grates on me when people use culture war tactics to attack others and this is how you, and others, come over. The nail varnish was an example as I clarified. Your attacks are usually money orientated. But one is not better than the other. People have and will always do things differently and even of those who do the same, some will fail and some succeed.

The most successful people I know are happy to admit that they were lucky with their timing, there chosen skill-set, in one case very much thrust upon them, and the people that helped and guided them along the way. In each case I would say their ability to accept both Duke and dustman, understand people and play to their strengths and the ability to understand their own weaknesses is why they have been so successful.

DaisyAnneReturns Mon 26-Jun-23 11:00:33

The above was in reply to GSM.

growstuff Mon 26-Jun-23 11:06:27

MaizieD

Good post, MOnica

I'm puzzled by vegansrock's statement that 'back in the day' people could get 100% or even 110% mortgages. Back in what day?

Wasn't that one of the things that precipitated the Global Financial Crisis? Uncontrolled credit?

Back in my day you'd have been lucky to get a 90% mortgage, let alone even more. 20% deposit and max 3x salary was about standard.

I had a 100% mortgage in 1982. The flat I bought increased in value by over 50% within four years, when I sold it.

growstuff Mon 26-Jun-23 11:09:11

Great post Doodledog.