The expected interest rate %

Da GOAT

Ive been calculating alot of my repayments based on different amounts i can borrow etc.

Ive constantly stress tested myself against 7%-7.5%, obvious in most cases ill just get by okay on these levels. My problem is im being to averse to the high rates that its worrying.

What are more experienced people thinking of how high the rates will go, and will the government (can the gov.) step in to keep levels low?

Thanks guys.

Cookie_Monster

Da GOAT wrote: »

What are more experienced people thinking of how high the rates will go, and will the government (can the gov.) step in to keep levels low?

Thanks guys.

why should the Gov, even if they can, step in and do anything about it?

Rates will rise by 1-1.5% this year I reckon, just today we've seen AIB kick off with .5%

AARRRGH

Our Government has no control over interest rates.

It's impossible to preduct how high they will go, but if you consider the fact that our banks are currently losing money on both their mortgage and deposit accounts, you can be pretty sure there are quite a few rate hikes on the way.

silverharp

Interest rates will go up and probably taxes too. Plan for the worst and hope for the best. The gov. cant manage bank interest rates and ultimately Irish banks will depend on foreign institutions to lend funds here so there could be an Irish premium depending on relative risks versus the non piigs economies.
Overpay now if you can and pay off personal credit as these have the highest interest rates

D3PO

Cookie_Monster wrote: »

Rates will rise by 1-1.5% this year I reckon, just today we've seen AIB kick off with .5%

German economy has taken a backstep recently so its likely going to push ECB rate rised out until Q1 next year. Dont see the banks raising their margins between 1 - 1.5% in this country this year especially with the Gov taking a larger stake in both of them which is almost enevitable.

0.5% - 1% is probably a fairer reflection of where we will be by the end of the year with a further 0.5% in Q1 next year I reckon.

OP In terms of where they will end up. I think it would be pure speculation if your stress testing and want piece of mind though you could always lock into a 5 or even 10 year fixed.

20goto10

Silverharp2 wrote: »

Overpay now if you can and pay off personal credit as these have the highest interest rates

Why bother overpaying your mortgage? You need to live now. It's all well and good thinking for the future but people should think for the present too. The vast majority of people will come into some sort of inheritence in their life and thats the time to start lumping money into your mortgage. Not to mention wage inflation, i.e its easier to pay off extra later down the line. If I have a choice between going on a holiday or paying off more of my mortgage I know which I'd be doing.

The worrying thing about interest rate rises is the way in which banks are dropping their switcher mortgages. Are there any switcher mortgages left at all now? So basically, they can hike rates and there's sweet FA you can do about it short of selling your house.

robd

D3PO wrote: »

German economy has taken a backstep recently so its likely going to push ECB rate rised out until Q1 next year. Dont see the banks raising their margins between 1 - 1.5% in this country this year especially with the Gov taking a larger stake in both of them which is almost enevitable.

0.5% - 1% is probably a fairer reflection of where we will be by the end of the year with a further 0.5% in Q1 next year I reckon.

OP In terms of where they will end up. I think it would be pure speculation if your stress testing and want piece of mind though you could always lock into a 5 or even 10 year fixed.

Government stake comes up all the time. The government stake is a tax payers stake. The banks are currently losing money. It is in the tax payers interest for the banks to raise rates as much as necessary. Stopping or restricting how much the can raise rates by is counter intuitive.

D3PO

robd wrote: »

Government stake comes up all the time. The government stake is a tax payers stake. The banks are currently losing money. It is in the tax payers interest for the banks to raise rates as much as necessary. Stopping or restricting how much the can raise rates by is counter intuitive.

I dont deny a lot of this, however if the government become majority stakeholders then it comes down to a CBA.

Does increasing margin, cause more defaults, cause more distress to the market, cost the exchequer in terms of reposession orders taking up court resources, cost the exchequer money in terms of keeping the housing market stagnent and reducing stamp duty tak, cost the exchequer in terms of having to rehouse these people that have their homes reposessed etc etc

Its not as straight forward as saying its in the tax payers interest for banks to raise rates. Im not saying which is the most beneficial but the numbers would have to be crunched.

Da GOAT

D3PO wrote: »

I dont deny a lot of this, however if the government become majority stakeholders then it comes down to a CBA.

Does increasing margin, cause more defaults, cause more distress to the market, cost the exchequer in terms of reposession orders taking up court resources, cost the exchequer money in terms of keeping the housing market stagnent and reducing stamp duty tak, cost the exchequer in terms of having to rehouse these people that have their homes reposessed etc etc

Its not as straight forward as saying its in the tax payers interest for banks to raise rates. Im not saying which is the most beneficial but the numbers would have to be crunched.

Yea this is kinda what I was getting at in OP.

Amhran Nua

D3PO wrote: »

Does increasing margin, cause more defaults, cause more distress to the market, cost the exchequer in terms of reposession orders taking up court resources, cost the exchequer money in terms of keeping the housing market stagnent and reducing stamp duty tak, cost the exchequer in terms of having to rehouse these people that have their homes reposessed etc etc

The way to deal with that is stimulate job creation and reduce the dole queues, not prop up the banks with even more taxpayers money. As for stamp duty tax take it should never have been allowed to reach the level it did, the sooner the government gets its head around the fact that we need industry not property the better.

robd

D3PO wrote: »

I dont deny a lot of this, however if the government become majority stakeholders then it comes down to a CBA.

Does increasing margin, cause more defaults, cause more distress to the market, cost the exchequer in terms of reposession orders taking up court resources, cost the exchequer money in terms of keeping the housing market stagnent and reducing stamp duty tak, cost the exchequer in terms of having to rehouse these people that have their homes reposessed etc etc

Its not as straight forward as saying its in the tax payers interest for banks to raise rates. Im not saying which is the most beneficial but the numbers would have to be crunched.

2 words: AerLingus - Shannon

Also, the number of repossessions per % point increase is well modeled. It would be far less than cost to the exchequer of plugging the deficit. It's a case of what's bad for the few is better for the masses. Anyone on a tracker would not be affected, which is most people who bought during the boom and who are struggling. The losers are those who bought in recent months but as lending criteria was stricter there should be more scope to absorb the increases. New buyers will be affected too but that would likely transfer to sellers of property with cheaper houses given that it's a buyer's market.

Not everyone is with a NAMA Bank. KBC, Ulster Bank, BOSI, PermanentTSB can all do what they like. They have, none of these have been lending over the past 24 months.

billybigunz

20goto10 wrote: »

Why bother overpaying your mortgage? You need to live now. It's all well and good thinking for the future but people should think for the present too. The vast majority of people will come into some sort of inheritence in their life and thats the time to start lumping money into your mortgage. Not to mention wage inflation, i.e its easier to pay off extra later down the line. If I have a choice between going on a holiday or paying off more of my mortgage I know which I'd be doing.

The worrying thing about interest rate rises is the way in which banks are dropping their switcher mortgages. Are there any switcher mortgages left at all now? So basically, they can hike rates and there's sweet FA you can do about it short of selling your house.

Have you just posted from 2006? Wage inflation? haha. I like the idea of somebody using the deaths of their parents in their futuer financial plans. Very Celtic Tiger.

JuliusCaesar

never mind the fact that if your parents ever need to go into a nursing home you'll be put to the pin of your collar and their house will go to fund it.....Don't count on an inheritance!

D3PO

robd wrote: »

2 words: AerLingus - Shannon

Also, the number of repossessions per % point increase is well modeled. It would be far less than cost to the exchequer of plugging the deficit. It's a case of what's bad for the few is better for the masses. Anyone on a tracker would not be affected, which is most people who bought during the boom and who are struggling. The losers are those who bought in recent months but as lending criteria was stricter there should be more scope to absorb the increases. New buyers will be affected too but that would likely transfer to sellers of property with cheaper houses given that it's a buyer's market.

Not everyone is with a NAMA Bank. KBC, Ulster Bank, BOSI, PermanentTSB can all do what they like. They have, none of these have been lending over the past 24 months.

hey like I said I dont know whats the most beneficial Ive not seen the model you refer to, but if you have a link that would be cool. Nothing like broading your horizons.

D3PO

Amhran Nua wrote: »

The way to deal with that is stimulate job creation and reduce the dole queues, not prop up the banks with even more taxpayers money. As for stamp duty tax take it should never have been allowed to reach the level it did, the sooner the government gets its head around the fact that we need industry not property the better.

your forgetting whos running this country though