When will interest rates go up?
“When will interest rates go up?” would seem a silly question to ask in 2014 when the new governor of the Bank of England, Mark Carney, has told us in no uncertain terms that interest rates will remain low for a very long time. This sort of “forward guidance” from the Bank is extremely valuable when you’re taking on a huge mortgage – and who hasn’t got a huge mortgage these days?
On the back of such reassurances the UK housing market is absolutely red hot right now – and according to every report you read, it’s getting hotter by the day.
Will interest rates rise and will the UK property bubble burst?
The Bank of England’s “forward guidance” looks like it may not be as robust as we were led to believe. Now we hear that the BOE is expecting to revert to a base rate of around 2.5% very soon. Not wanting to blow my own trumpet that’s exactly what I told my members six months ago following a meeting with my own bank insiders. The impact on anyone with a mortgage will be devastating. It’s absolutely vital that everyone understands that a 2% increase in lending rates can easily mean that someone already on a 2% mortgage will see their monthly payments double.
What is your current mortgage rate and what does that work out at a month?
Now, work out what those payments will be if the rate increases by 2%. Remember, you don’t multiply your payment by 2% to get the answer. You work out what 2% represents as a percentage of your current rate. For example, if you’re currently paying say 4%, then a 2% increase is a whopping 50% increase in your monthly bill. I sincerely hope everyone understands this and how it will impact on their mortgage payments on a monthly basis.
Of course, it’s highly unlikely that when interest rates do start to rise that they will stop at 2%. The BOE is fooling both itself and us if it thinks it can control interest rates. History shows that the exact opposite is true and the Bank is nothing more than an incompetent meddler in such matters. Witness the current rate of 0.5% if you need to see how little control the central bank has either in the medium or the long term.
If you are about to take on a larger loan in an attempt to get on the housing market gravy train, I suggest you tread very carefully indeed. We’ve all been here before – many times.
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6 Comments
At £100 to double-you’re not really competing with large scale seasoned professionals.
Once you go down the doubling numbers you begin to compete in effect with institutions and or Goverment policy etc(as that kind of continual doubling becomes an Intrest to the other 7 billion people and stated Goverment)
As a result-after a handful of these ‘doubling’ moves…the ability and time and competing positions from other investors and said governments etc just make the ability a compounded hardness.
Hopefully as we become more sophisticated we can enjoy these posts but realise they are like any other headline….attention seeking!
I’m afraid that none of that is even remotely true, Gerry. Remember, DYWTAM was written by not one, but two, multi-millionaires using these very techniques. I suspect that you’ve been ripped off in the past by the many “get rich quick schemes” that are out there. That’s a real shame. Having done all of the fourteen levels myself, (and I watch others do the same every week), I feel highly qualified to disagree with every single one of your comments. If you’re not rich now then you have to change your thinking if you want to make serious money. Here’s the thing; “If you keep doing what you’ve always done – you’ll keep getting what you’ve always got”. Stop and think about that for a minute. I don’t know if you live in a two million pound house but if you don’t, here you are telling someone who does that this won’t work. Really? The DYWTAM Programme is a genuine no-nonsense guide on how to become a millionaire – and absolutely anyone can do it.
Barry, is it only 10 issues of Double your way to a Million? A friend of mine who is interested wants to know, thanks.
Yes. That’s correct. One a month for ten months.
hi barry i am interested in your horse racing course and your recommendation of using isiris,i understand kevin booth has resigned from isiris do you still recommend we use this company still thank you,and also i notice on your websitethat it is still dated 2017 .
Good question. I have not used the Isiris service recently. I had a brilliant 11 year run but eventually I got closed down by all the bookmakers. I guess that’s a real sign of success but it was fun to do and I actually miss it. I did not know that Kevin had actually retired but I understand that the results this year have been extremely good. Maybe regular readers who still use Isiris can update me on that one and let me know how they are doing.