How long is a piece of string - interest rates

D

Dragon

Member

Location

Cornwall

• Nov 25, 2016

• #1

Regarding brexit and the likelihood of increased inflation.
The reasoning with higher inflation, interest rate will rise to help control it. But but how far can rates rise before having a negative effect on the economy - due to high debt in all parts of the economy.
I'm looking at "New money" and trying to work out what possibilities could unfold. All to with fixing now or 1-2 years time or staying variable

Thanks for replies and thoughts

 

Last edited: Nov 25, 2016

Daniel

Member

Location

Mildenhall, Suffolk

• Nov 25, 2016

• #2

Our bet was that rates will rise in the 5-10 year term. We've just fixed a reasonable sum for 15 years at 3.05%.

The variable rate was not substantially cheaper and libor would only need to rise by 2% in the second 7.5 years of the term to cancel out the saving in the first.

In 2004 we took a mortgage at 7.5% variable rate and no one would have said you could knock 5% off that by 2016. It won't take much for libor to go from the current 0.5% to 2.5% in 15 years.

 

Last edited: Nov 25, 2016

D

Dragon

Member

Location

Cornwall

• Nov 25, 2016

• #3

3% good was that 1-2 weeks ago or more, better deals for shorter term fix, since discussing with the bank fixed rates have increased by 0.5%.
Have been offered 3.74% for 25 yrs.

 

Surgery

Member

Location

Oxford

• Nov 25, 2016

• #4

Dragon said:

3% good was that 1-2 weeks ago or more, better deals for shorter term fix, since discussing with the bank fixed rates have increased by 0.5%.
Have been offered 3.74% for 25 yrs.

Click to expand...

2.25% severn year term just done here

 

Daniel

Member

Location

Mildenhall, Suffolk

• Nov 25, 2016

• #5

Dragon said:

3% good was that 1-2 weeks ago or more, better deals for shorter term fix, since discussing with the bank fixed rates have increased by 0.5%.
Have been offered 3.74% for 25 yrs.

Click to expand...

Yes, been in the pipeline for a while.

 

D

Dragon

Member

Location

Cornwall

• Nov 25, 2016

• #6

Surgery said:

2.25% severn year term just done here

Click to expand...

reflec

Surgery said:

2.25% severn year term just done here

Click to expand...

thats says your supplier isn't thinking its going to rise in the short term then??

 

D

Dragon

Member

Location

Cornwall

• Nov 25, 2016

• #7

Daniel said:

Yes, been in the pipeline for a while.

Click to expand...

loan already set up and converting to fixed ?

 

Surgery

Member

Location

Oxford

• Nov 25, 2016

• #8

Dragon said:

reflec

thats says your supplier isn't thinking its going to rise in the short term then??

Click to expand...

Wife's in the money game so it helped when sitting down with the bank , was an arrangement fee thou but glad we done it

 

Sid

Member

Livestock Farmer

Location

South Molton

• Nov 25, 2016

• #9

Dragon said:

3% good was that 1-2 weeks ago or more, better deals for shorter term fix, since discussing with the bank fixed rates have increased by 0.5%.
Have been offered 3.74% for 25 yrs.

Click to expand...

In the spring i was offered 28yr money at sub 3%

 

D

Dragon

Member

Location

Cornwall

• Nov 25, 2016

• #10

Surgery said:

Wife's in the money game so it helped when sitting down with the bank , was an arrangement fee thou but glad we done it

Click to expand...

arrangement on top? cant really go wrong with 2.25% fixed,
the banks margin have risen in 12 months where as cost of funds has reduced , even though overall cost is the same.

 

D

Dragon

Member

Location

Cornwall

• Nov 25, 2016

• #11

Sid said:

In the spring i was offered 28yr money at sub 3%

Click to expand...

did you take it. I would expect they have risen now

 

Sid

Member

Livestock Farmer

Location

South Molton

• Nov 25, 2016

• #12

Dragon said:

did you take it. I would expect they have risen now

Click to expand...

Had 3 offers on the table. But we went with our long standing bank that have shown that the have great customer service and understand our business. We fixed half and went variable with half. Will spread the risk.

 

D

Dragon

Member

Location

Cornwall

• Nov 25, 2016

• #13

Sid said:

In the spring i was offered 28yr money at sub 3%

Click to expand...

wouldnt hesitate at 3 %
but having seen rates rise .5% in 2 weeks - waiting for contract. which in turn increases cost over variable rate by 50%.

 

Daniel

Member

Location

Mildenhall, Suffolk

• Nov 25, 2016

• #14

Dragon said:

loan already set up and converting to fixed ?

Click to expand...

Interest only facility converted into capital repayment, which had been agreed as a strategy 12 months ago, just had to decide whether fixed or variable rate.