Interest rates up

[Meh]

The BOE today announced IR hike of 0.25%, which makes the base rate now at 4.75%. With fuel, gas, electricity, council tax going up, it wasn't really suprising.

I know a lot of people who are in the housing market, speculating on property. Most of them are convinced that there won't be a crash until interest rates hit 12% ("like last time"). After todays news, all of them have gone into panic mode as they will have to find the extra money to pay off the mortgages and rents have been static. Apparently IRs could go up further in the coming months, so are we finally about to see the madness that is house speculation about to crash?

[Jojo]

I'm not sure - people dont seem to worry about borrowing these days whether it be for cars (I've never seen so many brand new Mercs/BMW X3's/Lexus' etc around before), shopping or mortgages. But on the other hand, something is going to happen and I think it will be before IR's hit 12% (or at least I hope so) People seem to have forgotten that banks need to earn a profit just like any other business and with more money being borrowed than ever, they are going to have to recoup their lends somehow.

[Siobhan]

People don't seem to care about getting themselves into debt these days.. as long as they have the fancy house, nice car and are better than the jones' (not you em, no amount of possessions can do that) and they let themself get way behind in payment thinking work is secure, house is secure... it will all crash down and we are going to be left with a lot of very very poor people!!!

I was saying to NB yesterday, according to stats every man, woman and child in Ireland is in debt to €64k. I know i am not or my kids so who is in that much debt????

[Jojo]

People don't seem to care about getting themselves into debt these days.. as long as they have the fancy house, nice car and are better than the jones' (not you em, no amount of possessions can do that) and they let themself get way behind in payment thinking work is secure, house is secure... it will all crash down and we are going to be left with a lot of very very poor people!!!

I was saying to NB yesterday, according to stats every man, woman and child in Ireland is in debt to €64k. I know i am not or my kids so who is in that much debt???? :rotfl: Theres only one me! :rotfl:

Its true - so many people don't seem to care anymore and just want the possessions to try and make people think they have lots of money. The market will crash, and people will be getting themselves into all sorts of problems. They can't see this happening and IMO are blind and deluded if they think that things aren't going to change.

64k euros!! OMG - thats not including mortgage I presume? I dread to think what it is over here. I know that hubby and I aren't like that either - so the person who has my share has a massive shock coming to them.

[Katy]

I was saying to NB yesterday, according to stats every man, woman and child in Ireland is in debt to €64k. I know i am not or my kids so who is in that much debt????
That doesnt surprise me the amount of money my cousins have taken out trough varius loans so they can have the big house with 6 Bedrooms (even thoughs theres 2 people and a dog living there) the big cars and the land thta the house is built on. My dad has just come back from Ireland on Monday and he was saying how he doesnt know how they do it. Especially as when he and my mum were first married they were living in a little ex council house in St Helens not some mega big houses. They will be paying it off for the rest of there life, he said one of them has a 40 year mortgage.

[Siobhan]

yes it includes mortgage.. but that is per person.. there is about 3.5 mil of us and over half are under age 18 (so they can't get a loan) so that is a lot of debt for one country.. The new fad is €1 million mortgages for the house where the stars are.. House prices will go up to €500k for 3 bed in the next few years.. credit card, bank fee will also rise and energy has already increased

[moonstorm]

Surely the €64k must include a mortgage, how on earth could anyone borrow that much just for "stuff"??

[Jojo]

Surely the €64k must include a mortgage, how on earth could anyone borrow that much just for "stuff"?? You'd be surprised - have you seen how much a Lexus costs brand new. Even top of the range Renault Espaces cost £35,000 brand new - the Lexus SC40 brand new costs £54,778.....

[Katy]

54 grand for a car, you wouldnt want to drive it, incase you damaged it. People do pay stupid amounts of money for things though. Not just houses and cars.

[Meh]

I'm not sure - people dont seem to worry about borrowing these days whether it be for cars (I've never seen so many brand new Mercs/BMW X3's/Lexus' etc around before)

People either are getting loans for them or taking out equity from their homes. Its all fine as long as interest rates remain low and house prices remain constant. However, once inflation rears its ugly head, IR must go up which may leave many people in negative equity. End of the good times me thinks.

[Jojo]

People either are getting loans for them or taking out equity from their homes. Its all fine as long as interest rates remain low and house prices remain constant. However, once inflation rears its ugly head, IR must go up which may leave many people in negative equity. End of the good times me thinks. I totally agree NB - the sad thing is that so many people have been fighting to get on the housing ladder of late, that they are going to find their "cheap" one bedroom houses/apartments going into negative equity and when they need to get a larger property are going to be in a worse position than if they hadn't purchased originally.

[pookie1968uk]

we have just moved our mortgage round again and took a 5 year fixed rate deal out so our mortgage will be the same now for 5yrs. we feel we have done this at the right time as it is obviously the lull before the storm im sure.