Re: UK interest rates rise for first time in 10 years
Originally Posted by
Morticia
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Put like that I have to agree with you.
Anyone who can already afford to pay over a grand a month on a mortgage shouldn't even flinch at an extra £39.
Indeed. The current rise is insignificant compared to the rises of the past, when 1 or 2% rises were common and which really hurt people's finances.
For example, currently:
A £300,000 mortgage @ 4% over 25 years costs about £1,584 pm
An increase of 2% would increase the payment to £1,933 pm - if my calculations are correct, that's an increase of £349 pm.
Even a mere 1% increase would entail in increase of £179 pm.
Now, those rises would really hurt!
I can recall rates rising so much that building societies were extending payment periods because borrowers were unable to cope with rate increases.
http://www.independent.co.uk/money/m...0s-787630.html
In 1991 mortgage repossessions – people losing their homes – hit a record of 75,000. Interest rates went from 8 per cent to 13 per cent in six months