chem1st Posted October 31, 2010 Share Posted October 31, 2010 Interest rates are at a 300+ year record low, soon they shall rise. Currently they are 0.5% Many have mortgages at 2.5% based upon this rate. So assuming they rise to 5%, the mortgage rate will be 7% 10% > 12% 17% > 19% You get the picture. This little tool will let you calculate your future mortgage repayments when interest rates rise. The question is, to what level would rates have to rise for you to be unable to meet the repayments, and thus be repossessed/wiped out. Link to comment Share on other sites More sharing options...
Guest sibon Posted October 31, 2010 Share Posted October 31, 2010 Interest rates are at a 300+ year record low, soon they shall rise. Currently they are 0.5% Many have mortgages at 2.5% based upon this rate. So assuming they rise to 5%, the mortgage rate will be 7% 10% > 12% 17% > 19% You get the picture. This little tool will let you calculate your future mortgage repayments when interest rates rise. The question is, to what level would rates have to rise for you to be unable to meet the repayments, and thus be repossessed/wiped out. In my case, the answer is "a long way". I think I could cope up to about 25% I can remember paying double digit interest rates in the late 80s after those paragons of fiscal prudence, the Tories, wrecked our economy. That was very hard, my mortgage was a much bigger proportion of my income back then. I do think that those selling mortgages to first time buyers must be very clear about the effect of increasing rates. Link to comment Share on other sites More sharing options...
perplexed Posted November 1, 2010 Share Posted November 1, 2010 They'd have to seriously rocket to make me panic. And even then I could re-mortgage over a longer period of time. I pay under 1% at the moment, and liking it. I'd start to struggle if they headed towards 18% ish. But thats not happening any time soon. Link to comment Share on other sites More sharing options...
espadrille Posted November 1, 2010 Share Posted November 1, 2010 Interesting to see that the biggest percentage so far have no mortgage at all. I wonder of those how many are paid off or havent even started? Link to comment Share on other sites More sharing options...
Bonjon Posted November 1, 2010 Share Posted November 1, 2010 Most economists are suggesting the rate will stay low for a long time (2+ yrs) and when it does rise will be in very small steps. I think we will be ok for a while yet, as soon as it does start to step will be when I fix. On the flip side I come out of my current fixed at the end of the month and will go from 7% to 2.5% saving me over £200 p/m Link to comment Share on other sites More sharing options...
chem1st Posted November 1, 2010 Author Share Posted November 1, 2010 Interesting to see that the biggest percentage so far have no mortgage at all. I wonder of those how many are paid off or havent even started? About 23.5 million properties in UK and 11-12 million mortgages. Link to comment Share on other sites More sharing options...
espadrille Posted November 1, 2010 Share Posted November 1, 2010 About 23.5 million properties in UK and 11-12 million mortgages. So are you saying that about half of those are owned outright? Link to comment Share on other sites More sharing options...
Dave650 Posted November 1, 2010 Share Posted November 1, 2010 Think the biggest risk to anyone's mortgage would be unemployment, if the rate went up astronomically we'd be wrecked anyway wouldn't we? Link to comment Share on other sites More sharing options...
chem1st Posted November 1, 2010 Author Share Posted November 1, 2010 So are you saying that about half of those are owned outright? No, it's all a bit confusing. http://www.statistics.gov.uk/census2001/profiles/commentaries/housing.asp 67% owner occupier rate I think. So about 17% owned outright? 33% must be council and HA? Link to comment Share on other sites More sharing options...
Isabelle Posted November 1, 2010 Share Posted November 1, 2010 I'm hoping the interest rates stay low. Our five year fixed rate of 5.99% expires in 5 months, and we'll probably end up on a tracker deal. Can't really afford any increase at the moment, but anything above 8% would not be affordable. Link to comment Share on other sites More sharing options...
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