The forecast is for a rainy day (NOT weather related)

  fourm member 09:30 29 Dec 13
Locked

Unemployment is falling towards the 7% that the BoE said MIGHT trigger interest rate rises.

Some people have suggested that the Tories would benefit from a rise in interest rates because savers are more likely to lean towards voting for them.

The papers are starting to run pieces about the problems people would get into if mortgage rates rise.

So, if you have a mortgage, are you already planning for higher interest payments?

  wee eddie 14:31 29 Dec 13

Anyone who started a mortgage, without factoring in a rise in Interest Rates from it's current record low, has to have been two slices short of a sandwich!

  Fruit Bat /\0/\ 15:30 29 Dec 13

wee eddie I would agree with you,

however today's Goverment, businesses and society as a whole, appears to

work for the short term

or in this years budget

or live for today

  fourm member 15:31 29 Dec 13

wee eddie

Harsh but pretty much true.

I know that if I had a mortgage I'd be starting to cut my spending by an increasing amount each month so that, when the interest rate rises, I'd have already adjusted for the higher payments.

I just wonder if people are doing that.

I suppose what I'm saying is that I won't have any sympathy once the 'unfortunate family falling into mortgage arrears' stories start appearing.

  fourm member 10:51 31 Dec 13

spider9

My point is that there are lots of situations that are hard to deal with if they come on you unexpectedly but can be managed if you have time.

Obviously, interest rates are going to rise. That gives people time to plan to cope with that rise.

In the worst case, it gives time to sell the current property and move down to something affordable. Better to do that than sit back and wait to get turfed out and lose a lot more money in the process.

I'm not thinking about people who are already on the edge. I'm thinking about the people that will go ahead with a foreign holiday this year and keep their Sky subscription going before screaming blue murder when their mortgage payments go up.

  wee eddie 10:52 31 Dec 13

spider9: I have sympathy for anyone in such a situation, if they have reached a position that does not allow them to pay an increase.

The loss of a job and all the consequences of that go with it can be horrendous, but that is not what I said.

  Quickbeam 11:24 31 Dec 13

**"I know that if I had a mortgage I'd be starting to cut my spending by an increasing amount each month so that, when the interest rate rises, I'd have already adjusted for the higher payments. I just wonder if people are doing that."**

Of course they are already cutting their monthly expenditure back, and have been for a while. But not for an expected rise in interest rates, but for normal living. I don't know of many that aren't already on a much reduced standard of living compared to 5 years ago.

When there is no more lean to be trimmed, no amount of bigging up talk will fool the electorate when the election comes.

  fourm member 13:01 31 Dec 13

'I don't know of many that aren't already on a much reduced standard of living compared to 5 years ago.'

I can't say that I know of many that have dramatically changed their living standards in spite of the problems.

True, UK visits abroad fell from 69 million in 2009 to a low of 55 million before recovering to 57 million in 2012 so a number of people clearly cut back but a good many didn't.

Or what about Sky TV? Since 2005, Sky has added around 2.5 million TV subscribers. Of its 10.5 million total, around 5 million take its premium HD service.

For a lot of people, things aren't that tough.

  HondaMan 18:58 31 Dec 13

When my wife and I married in 1972, we had what was then a sizeable mortgage of £4000 or thereabouts and our repayments were of the order of £32.00 per month. Bear in mind, we were only earning £1000 per annum BETWEEN US!

We factored in a doubling of the rate, decided we could still afford it, and went ahead. As rates went up, so did our payments but as the rate fell, we kept the payments at the higher rate thus shortening the term.

We considered that we were responsible people (as did our bank) for allowing for any rise in interest rates in our calculations.

These days, I am afraid that "looking ahead" seems to have become obsolete and as Fruit Bat /\0/\ said, it seems to be a case of work for the short term, or {live} within this years budget, or simply live for today.

There are, of course genuine instances of those who through no fault of their own fall on hard times, but those living on credit up to the hilt, with no fore-planning have no-one but themselves to blame

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