# concerned over possible interest rate rises



## craigeh123 (Dec 26, 2011)

As per title . Santander increased our rate a while back even though the base rate hadn't changed which kind of annoyed me , and now in concerned over the talks of another rise . I would be in a lot of bother if it goes up as tbh we never benefited from the low rates as we had a fixed mortgage when the rate tumbled and then had to go interest only . 

Anyone else concerned ?


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## fatdazza (Dec 29, 2010)

Not concerned, as we fixed ours for the next 4 years at 2.79%.

One thing is certain however, interest rates will rise, the only question is when?

The current low interest rates are an anomaly, created by the Bank of England, to prevent a massive recession following the banking crisis.

Now that economic recovery looks to be gathering pace, interest rates will rise to prevent an unsustainable boom (which will be followed by the inevitable bust).

My money is that rates will start to rise around October/November/December time. The rise will be steady and gradual. Possibly rising to 3 or 4% by the end of 2016. These are only my predictions ans should be taken with a pinch of salt. Anyone who can predict with certainty would be a very wealthy person!


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## steveo3002 (Jan 30, 2006)

looking forward to earning some intrest on my savings tbh

did you not realise rates would increase sometime?


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## Maniac (May 20, 2012)

TBH if you're variable rate you're better off trying to pay some of it off rather than saving money. You'll make much more money paying off your mortgage than putting money into a savings account. Is there no option to fix your mortgage now OP? You might pay a fee but so long as that's less than a forecasted increase on your interest now that's a good move IMHO.


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## Exotica (Feb 27, 2006)

No , savings are crap so welcome it soon.


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## Naddy37 (Oct 27, 2005)

IMHO, if you take out a mortgage, you should account for an interest rate rise in your budget.

Think it's gonna catch a lot of people out.


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## adlem (Jul 6, 2008)

neilos said:


> IMHO, if you take out a mortgage, you should account for an interest rate rise in your budget.
> 
> Think it's gonna catch a lot of people out.


That's why they've changed the way mortgages are given out, reducing the amount people can borrow and making it much harder. The system is still majorly flawed too.

Added to your bottom point, the help to buy scheme added to this is going to lead to a lot of problems and repossessions in the very near future imo


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## Darlofan (Nov 24, 2010)

adlem said:


> That's why they've changed the way mortgages are given out, reducing the amount people can borrow and making it much harder. The system is still majorly flawed too.
> 
> Added to your bottom point, the help to buy scheme added to this is going to lead to a lot of problems and repossessions in the very near future imo


Ours is on the market at the mo so had few chats with our mortgage provider. the whole thing is stupid, 8 years ago I walked into the bank gave them my payslips and walked out with a mortgage. Now I have to provide them with everything we spend each month. That's all well and good but as the mortgage advisor said the second I complete on next house I can go out and get loans for god knows what, spend my wages exactly how I want and there is nothing the mortgage company can do about it.

I've had a mortgage for 8 years never paid late, I've had loans, car finance, credit cards galore over the last 24 years and never paid one late or defaulted on anything. THAT is what should determine whether or not I get a mortgage not where I eat out each month or go to a gym.:wall:

At the moment I'm even holding off on a new mobile contract £21/month as advisor said it'll flag warnings up.


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## craigeh123 (Dec 26, 2011)

Basically we've had our mortgage 9 years . First 4 were fixed , it then rose and worried it would rise again we got another fixed rate at a poor rate just before the rates dropped meaning we were paying over the odds but stuck in a fixed deal . We then had to go interest only , and as i say inspite of the low rate Santander still increased ours . So tbh we haven't really benefitted from the low rate at any point . 

cant remortgage as due to being a bit naughty with a couple of credit cards in now a risk to lend to . 

My house is worth 165 with a mortgage of 135


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## craigeh123 (Dec 26, 2011)

We've never missed a payment on our mortgage though .


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## adlem (Jul 6, 2008)

Darlofan said:


> Ours is on the market at the mo so had few chats with our mortgage provider. the whole thing is stupid, 8 years ago I walked into the bank gave them my payslips and walked out with a mortgage. Now I have to provide them with everything we spend each month. That's all well and good but as the mortgage advisor said the second I complete on next house I can go out and get loans for god knows what, spend my wages exactly how I want and there is nothing the mortgage company can do about it.
> 
> I've had a mortgage for 8 years never paid late, I've had loans, car finance, credit cards galore over the last 24 years and never paid one late or defaulted on anything. THAT is what should determine whether or not I get a mortgage not where I eat out each month or go to a gym.:wall:
> 
> At the moment I'm even holding off on a new mobile contract £21/month as advisor said it'll flag warnings up.


I know, it's a real pain! I'm self employed so it was done on my net profit not my actual earnings then they still tried to ask what fuel and vehicle expenses, insurance etc I had monthly - hang on a minute I've already taken that out to get to the net profit lol!

It should be done differently as you say, there's nothing to say you can just cancel all those expensive things beforehand, have the affordability then just take it all out again you move in. We've just fixed our first mortgage for 5 years. We're having to pay 3.75% but it's bound to go up at some point and at least we're guaranteed what the payments will be to start with with no nasty surprises


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## J306TD (May 19, 2008)

Were on a fixed rate. Had mortgage now for 3 1/2 years. First time buyer never missed a payment. We started off on a high fixed rate for first 2 years. Then mortgage broker rang went through our details again which resulted in a low fixed rate. This is saving us about £55 a month


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## Gavla (Apr 10, 2014)

Judging by the news this evening about inflation being at it's lowest in 4 years, coupled with the economy in general being better, I reckon they will go up before the year is out or at the very beginning of next year at the latest.


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## Kiashuma (May 4, 2011)

I am, our mortgage product expired so we are on a +% of base rate just now, which is a good saving over what we had been paying, giving us a chance to put the money to some other things, so im hoping it won't increase. If it does i think it will only be by 0.5%


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## Andyg_TSi (Sep 6, 2013)

any rise will be slow and gradual, initially I would expect to see a 0.5% raise early in the new year, then if the recovery gets better further 0.5% increases over the nect 18 - 24 months, depending of course, on the state of the economy.

The key here is paying off as much as you can off the capital borrowed if you have savings & remortaging a smaller figure overall, if you can.

While a 0.5% increase in interest rates will do bugger all for savings, it will make mortgages significantly more expensive

If your currently on your lenders Standard Variable rate, then I'd be looking to pay as much as you can off the capital figure of your mortgage & look for a fixed rate on a lower figure.

I'm on my lenders SVR at 2.5%, currently owe £93K, i'll be looking to remortgage in September, as i'll have £30K to pay off my mortgate, so i'd be looking to remortgage
£63K in September for as low a figure as I can get


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## craigeh123 (Dec 26, 2011)

So on a monthly payment of 538 quid what am i going to end up paying .


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## Andyg_TSi (Sep 6, 2013)

A 0.5% raise will add approx 30 - 40 on the monthly repayment on a 100k repayment mortgage.


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## Andyg_TSi (Sep 6, 2013)

Here is a mortgage calculator, put your figures in and then adjust the rate % figure in +0.5% steps to give you an idea

https://www.moneyadviceservice.org....ft_section=e&gclid=CMfk3YmbhL8CFYIewwodDwMAGg


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## craigeh123 (Dec 26, 2011)

So prob looking at another 100 within the next year . Nuts


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## Andyg_TSi (Sep 6, 2013)

That depends on how much the rate rise(s) are mate.

Bank of England might up the rate in 0.25% steps.

I think we can safely say the rate will rise it's by how much and when which is uncertain.

If you can do anything try and pay off any additional credit you have between now and the end of the year, if you can't do anything on the mortgage front.

So credit cards/ Hire Purchase / Loans.

Try and pay these down if you have them to free up more cash flow.


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## Darlofan (Nov 24, 2010)

This is why finance needs to be taught in schools. It's scary knowing anyone can get mortgages, loans etc without knowing about interest, repayments etc.


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## craigeh123 (Dec 26, 2011)

My circumstances have somewhat changed since i took my mortgage and other credit agreements


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## wrxsti (Feb 3, 2013)

Heres what i did, sell house, use equity from house to pay off debt, rent and be good for 5 years then buy again.


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## craigeh123 (Dec 26, 2011)

Trouble is wrx is rebts more than mortgage ! Also the equity in the house isn't mine its my wife's .


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## ChuckH (Nov 23, 2006)

I hope rates do rise !
Lets be honest here when have rates ever been this low and so low for so long ? Anyone who has kidded themselves rates would not rise is not living in the real world..

Sorry this isn't going to be popular but we savers need a little balance here as well. For the last few years our savings have dwindled as they are not keeping up with inflation..

In other so called recessionary times we saw rates up around 15% yet this time we have seen money for nothing. Well almost..

The fact that lending institutions are raising rates before the actual rate rise just goes to show what thieving money making bast£rds they are !!


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## Richf (Apr 26, 2008)

Savers rates aren't linked to these rates in fact they are actually dropping because the banks don't want money as they have nothing to do with it ie no one to lend to , that's why many have already dropped their cash isa rates


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## S63 (Jan 5, 2007)

We need two rates, one for borrowers, one for savers.


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## ChuckH (Nov 23, 2006)

Richf said:


> Savers rates aren't linked to these rates in fact they are actually dropping because the banks don't want money as they have nothing to do with it ie no one to lend to , that's why many have already dropped their cash isa rates


Low lending rates mean low rates for savers.. Ok there is some strange goings on and has been for some time something to do with the government propping things up but savers rates are ridiculous now and have been for far to long.


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## Richf (Apr 26, 2008)

S63 said:


> We need two rates, one for borrowers, one for savers.


There already is


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## Richf (Apr 26, 2008)

ChuckH said:


> Low lending rates mean low rates for savers.. Ok there is some strange goings on and has been for some time something to do with the government propping things up but savers rates are ridiculous now and have been for far to long.


They have indeed been too low for too long but rising base rates won't fix that

Back when savers were getting 5 or 6 % the mortgage rate was 14%


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## craigeh123 (Dec 26, 2011)

I wouldn't mind so much if the bank hadn't raised my rate allready when the base rate hadn't changed .


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## kh904 (Dec 18, 2006)

ChuckH said:


> I hope rates do rise !
> Lets be honest here when have rates ever been this low and so low for so long ? Anyone who has kidded themselves rates would not rise is not living in the real world..
> 
> Sorry this isn't going to be popular but we savers need a little balance here as well. For the last few years our savings have dwindled as they are not keeping up with inflation..
> ...


I agree 100%
I've been prudent with my wages and saved extremely hard for a house but savers like myself have been punished for it!

Regarding the BoE base rate, it does usually effect savings and lending rates. 
Banks make their profit on the difference on the interest paid to savers and the interest on loans (that's in theory but they actually scam everyone as they create new money each time a loan is taken out).

Different banks have different margins and therefore different interest rates


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## ChuckH (Nov 23, 2006)

craigeh123 said:


> I wouldn't mind so much if the bank hadn't raised my rate allready when the base rate hadn't changed .


My point exactly ! Once again they are profiting from folk at no expense at all to themselves cos savers aren't getting a single penny extra !

These ridiculous unfair stunts should not be allowed as its almost .. No its completely immoral !

But then someone has to pay their bonuses eh ?.................


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## CliveP (Feb 1, 2009)

My first mortgage was over 15% so I have always calculated payments based on that, and if I wasn't happy paying it at that interest rate, I wouldn't take it. 

Hope it's all ok for you - my advice is over pay like mad, kill your mortgage in a fraction of the time, and you'll relax - that's what I did. Then I just started buying places to let, so any mortgage is only on a buy-to-let place, so it's no real risk (never had a problem getting decent tenants). I still pay them off asap, then there's more for that retirement, if I could ever face not working, which I cannot imagine.....

As above I just want to get some decent interest rates now...

Regards,
Clive.


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## Tricky Red (Mar 3, 2007)

As CliveP says really - when we had our first mortgage the rate was 4.99% fixed for 3 years that was back in 2002. In 2006 we switched to an offset tracker at BOE + 1.00%. 

We carried on repaying at the same rate as the 4.99% rate when the rate dropped so now we are at least 2 years further into our mortgage. 

Morale of this really is to work out what you can afford at a higher rate and stick to it.


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## Soul boy 68 (Sep 8, 2013)

A lot of people including myself have taken a heck of a beating on our savings for too long now, so for many of us a rise can't come quick enough.


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## craigeh123 (Dec 26, 2011)

some of us dont have enough money to put aside for savings as much as id like to .


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## ChuckH (Nov 23, 2006)

Tricky Red said:


> As CliveP says really - when we had our first mortgage the rate was 4.99% fixed for 3 years that was back in 2002. In 2006 we switched to an offset tracker at BOE + 1.00%.
> 
> We carried on repaying at the same rate as the 4.99% rate when the rate dropped so now we are at least 2 years further into our mortgage.
> 
> Morale of this really is to work out what you can afford at a higher rate and stick to it.


Why more people cannot adopt a sensible attitude like that beats me.......


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