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

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

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.

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.

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.

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.

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.

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.

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.

Just the one home then Daisy? 😊

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

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'.

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?

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.

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.

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?

I'm sure I read recently that one building society was planning to offer 100% mortgages to renters, Casdon. I think on the basis that repayments would be about the same as their current rental payments.

Yes, I agree. A 100% mortgage will be a life saver for some renters who cannot get a deposit together.

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.

DiamondLily

Inflation has been rising for ages, but core inflation is usually buried under government spin.

It's all smoke and mirrors. 🙄

Have a look at the annual inflation rates for the last decade

www.inflationtool.com/rates/uk/historical

100% mortgages for first time buyers were common in the 90s and early 2000s, fell out of availability after the crash in 2008, but are now available again. I don’t know anybody who had one, but I can see that if you are a renter with a family so no opportunity to save a deposit, they have a place provided you can get a good deal and aren’t paying a huge amount more on a mortgage than you would be renting.

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

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'm confused as well.

Our home was purchased over 60 yrs ago, with a 10% deposit, 3.5x salary (£500 yearly salary) on 5% mortgage.

When looking at the housing market and considering interest rates, playing with interest rates will not help people buy houses.

The housing market is based on supply and demand and the price of houses is based on how much people can afford or are willing to pay to own the roof over their head.

On a repayment mortgage the monthly payment includes interest and capital repayment. If interest rates are high then less capital can be repaid each month and prices will fall - there is already talk of prices dropping by as much as 10%. The reverse applies if interest rates are low. Similarly when lenders became willing to consider 2 incomes when house buying, the price of houses gradually rose to match the larger sum that could be spent on housing each month.

You do not see large estates of empty houses that haven't sold because people cannot afford them. Now and again the market for existing houses will slow down because of sudden national economic reasons (2008, for example), or local reasons like the shutting down of a large employer, but generally, demand matches supply, matches available income for new buyers.

The problem that arises when interest rates are rising is with existing house owners who took out mortgages when interest rates were low and now have to pay more.

But again that problem will mainly be with those who bought houses in the last 5 years because, with most mortgages being repayment mortgages you are paying off capital each month, very little at first, but if you have been in a house for 10 years or more, not only will you have paid less for your house than those who bought recently, you will be paying interest on your original mortgage less the capital you have already paid. so the rise will not be high.

The ones having the real problem with these recent interest rises are first time buyers who have bought in the last 5-10 years.

Inflation has been rising for ages, but core inflation is usually buried under government spin.

It's all smoke and mirrors. 🙄

MaizieD when exactly are you counting periods of low inflation? Energy and food prices have been rising steadily and if these could be lowered, surely interest rates could go down also?

Ok, well whatever. I'm glad that I'm finally getting some sort of return on my savings and investments.

I'm not sure the inflation figures were entirely accurate either 🙄