Money expert Martin Lewis explains the mortgage crisis
2023 ж. 22 Мау.
203 677 Рет қаралды
We spoke to the Money Saving Expert Martin Lewis about the impact of the Bank of England's decision on mortgage holders, renters and the economy.
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Basically , mortgage rates have reached their highest point since 1998, spanning 25 years. Considering inflation trends, there's potential for them to rise even further. Just a year ago, a 28year fixed rate was only 6%. This prompts the question: should I wait for a housing market downturn before buying or shift my focus towards the equity market?
The stock market follows a similar pattern, in order to sustain profits, it's crucial to possess a deep understanding of the market.
Indeed, I primarily engage in buy-and-hold, but my portfolio has been in the negative for an extended period. To achieve substantial gains, consistency and regular portfolio adjustments are essential.
I think investing was simpler in the 70s, but it's more complex now. Those consistently profiting today are usually professionals. That's why I've had an advisor for 7 years to steadily grow my retirement portfolio.
My partner is also thinking about taking a similar approach. Could you please provide more details about the advisor who assists you?
@@VickyAlvy Her name is Stacey Lee Decker and she' a genius at her field. You can easily confirm her expertise by searching for her online. She possesses extensive knowledge of financial markets.
My diesel bill: up £3000 My food bill: up £2000 My heating bills: up £2000 My morgage payments: up £10,800 Tory paycuts over 13 years: £40,000+ This conservative government has cost me well over £67,800 and they have the cheek to say I, as a nurse, deserves another huge paycut. National disgrace
It’s gone beyond a joke. Seeing your breakdown of expenses really brings home the impact of inflation and interest rises. Also, thank you for all your service.
I'm going back to Jamaica tomorrow, I as had enough of the biristh government
@H.I.T.E.N. Thankyou. This list was just some of them. Cars, broadband, furniture, building materials have all doubled as well. Every employed person in the country is tens of thousands worse off because of this government. Every public service in the country is on its knees. The only good news is that we are unlikely to ever see a Conservative government in power again in our lifetimes
You have had no pay cut. Yes you do need a pay cut, you have had none yet as they were at most mere freezes. £2k rise! on food a year what do you live on, caviar? There is your problem your spending behaviours. My entire power bills are a quarter of your heating bill rise. Stop turning it on! UK winters are mild and barely ever need any.
@@nicholaspostlethwaite9554if inflation is more than a payrise then yes, that’s a real term pay cut. All you people who seem to actually WANT ordinary people to be worse off cos the daily Mail has told you that some nurses have a new car need to give your head a wobble. We’re an extremely wealthy country, why do you want heating bills to rise?
Banks are selling mortgages. People always say it's a good option to buy at discount, but with the market turmoil and everything at stake in present economy, I'm thinking of buying stable coin to hedge against inflation, or is it all right saving over 350k ?
There are options that spread across multiple banks. I use a non-beginner broker that protest up to 3 million dollars and provide 4.58% returns on cash, it's always a good idea to consider working with an advisor for financial planning
It is difficult to make exact projections for the housing market as it is still unclear how quickly or to what degree the Federal Reserve will reduce inflation and borrowing costs without having a substantial negative impact on demand from consumers for anything from houses to cars.
I recently sold my home in the Boca Grande area and am considering investing a lump sum into the stock market before the anticipated rebound, couple of folks have been discussing a potential May rally, speculating on which stocks may experience substantial growth during the festive season. Do you have any insight into which stocks these might be?
Over the past three years, I have been working with an investment coach who has provided daily guidance on my investment decisions. With their expert analysis, I have realized gains of over 850k. Their insights have helped me avoid losses and capitalize on market breakthroughs, particularly during downtrends.
@@williamsbrown4026 Could you possibly recommend a trustworthy advisor you've consulted with?
@@adakkristinn renowned for her proficiency and expertise in the financial market, ''Colleen Janie Towe’’ my financial advisor, holds a broad understanding of portfolio diversification and is recognized as an authority in this domain.
@@williamsbrown4026 I will look her up online and do my due diligence. If She seem proficient. I`will write her an email outlining my financial objectives and scheduled a phone call.
In my opinion, a housing market crash is imminent due to the high number of individuals who purchased homes above the asking price despite the low interest rates. These buyers find themselves in precarious situations as housing prices decline, leaving them without any equity. If they become unable to afford their homes, foreclosure becomes a likely outcome. Even attempting to sell would not yield any profits. This scenario is expected to impact a significant number of people, particularly in light of the anticipated surge in layoffs and the rapid increase in the cost of living.
I suggest you offset your real estate and get into stocks, A recession as bad it can be, provides good buying opportunities in the markets if you’re careful and it can also create volatility giving great short time buy and sell opportunities too. This is not financial advise but get buying, cash isn’t king at all in this time!
You are right! I’ve diversified my $450K portfolio across various market with the aid of an investment coach, I have been able to generate a little bit above $830k in net profit across high dividend yield stocks, ETF and bonds.
@@TomD226 Do you mind sharing info on the adviser who assisted you?
@@lowcostfresh2266 I receive guidance from coach Laurel Dell Sroufe, who possesses extensive financial market experience. While others may prefer different approaches, her strategy has proven successful for me, as evidenced by my results. Specifically, she offers valuable insight on entry and exit points for the securities that I concentrate on.
Are you people even real? Y'all talk like adverts
Every crash/collapse brings with it an equivalent market chance if you are very well informed and equipped. I've seen folks amass up to £800K amid crisis, and even pull it off easily in an unfavourable economy. Unequivocally, the bubble/collapse is getting somebody somewhere rich.
The effects of the British pounds' increase or fall on investments, in my opinion, are complex, but it has never been simpler to learn how to build your money than it is right now, when you may discover and experience a genuinely broad market passively by working with a successful Financial Consultant
@@graceocean8323 That does make a lot of sense, unlike us, you seem to have the Market figured out. Who is this consultant?
SALVATORE FORTUNATO SOFIA is my financial advisor. After finding her on a Kiyosaki interview in which she was mentioned, I contacted her. She later offered entry and exit points for the securities I concentrate on. If you feel the need to reach out, you can conduct a fast online search using her name. I practically copy her market strategies, and I haven't felt bad about it.
Thank you for this tip. It was easy to find your coach's webpage by looking up her name online. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her resume.
It’s good to hear someone being transparent and shedding light on the subject rather than shying away when asked questions.
He is making millions off this
@@garybrown4753 So its even more heroic to talk about it
@@garybrown4753Stupid comment. Wow
Can you explain how you think Martin Lewis is making millions out of the situation? As you seem to know a lot about his motives to try to help people from financial ruin
The essential thing that everyone should be thinking about right now is investing in non-government sources of income. Especially in light of the current global economic crisis. It is still a wonderful moment to invest in gold, silver, digital money, and stocks.
@@Sunflowers176The wisest thing that should be on everyone’s mind currently should be to invest in different streams of income that doesn’t depend on the government. Especially with the current economic crisis around the world. I recommend Mrs Mary Margaret Cartier🇺🇸
This is not my first time I am hearing of this woman and her exploit trading world but I have no how to reach her. Please how can i reach her?
She’s good and guaranteed💯. When I saw her testimonies all over the place I thought it was all made up stories till I was convinced and gave it a try and honestly I don’t regret the move I made because I invested in a big way.
I strongly agree with you mate. Investment is the key to sustaining our financial longevity, and not just any investment but an investment with guaranteed return.
@@Roberttaylor333Wow 😊I texted your broker and she responded. Thank you guys 🙏 for this vital info
This man spends hundreds of thousands of time just to help us. He helps those in need while also helping us. He always puts a smile on our faces and we should appreciate it. Hats off to Him! I love you dude. Crazy I've never payed attention to the Mysticflip on the internet movement when I say ancestral your a gift to our people
If he really wanted to help, he would call out usury.
Hey Sherry after taking your advice and getting the 51 point increase to my fico score, Mysticflip claimed my increase came from my car payment balance decreasing which I believe was a lie, hoping I'd not realized the real reason it went down and try the process all over again.....makes me realize these companies really wanna keep us down and indebted to them...am I crazy for thinking this way?
I always chuckle when people say " you cant go wrong with bricks and mortar", "on the housing ladder" etc. The truth is house ownership is the lesser of 2 evils that will constantly need money pumped into it
Bu5over time you will always make money on bricks and water, quicker than other investments
Many ‘Builders’ are not even using bricks or mortar these days !.
@@helennoble9587 Nonsense. What you are doing is leveraging yourself using the banks money. That risk can mean you get burned very hard in a downturn. S&P500 destroys property in returns. I've no idea why anyone would want the hassle of BtL.
@@helennoble9587Not true, look at the cost of the so called investment. You get a better return on stocks and shares. You gain around 7% return on a rental property with risk and expenditure or 6.5% risk free in a cash isa now
Liz Truss skipped the game tutorial, and went straight to the main mission.
she then stocked up on lettuces.
😂
Well she’s on some ridiculous amount of cash, so I guess she’s the one laughing
Non-Expert explains the mortgage crisis: an intentional redistribution of wealth from the middle and bottom directly to the insatiable top .000001%
Not going to lie, but we are actually really proud to have an employee like you as part of the team. The job is done so gracefully and neatly. Very well done, dear MYSTICFLIP . First of all. Thank you for making the work environment so friendly and taking your responsibility seriously and completing the work gracefully! You deserve so much.
As a Retired combat Marine I want to tell you that as what you are doing is just as important as any warrior on the battlefield. You are waging warfare against these criminals and terrorists on the digital battlefield. You are defending and protecting the most vulnerable of our society against these predators. Keep up the good work MYSTICFLIP on the internet
It is all such a mess. Despite Martin Lewis being absolutely right and with inflation on food being so high at near 20%, house price inflation, over many years has been out of control. Given the UK has seen ultra low interest rates since the Great Financial Crisis in 2008, house prices have been the main beneficiary of low interest rates. The Governor of the Bank has been poor, printing money on a whim via quantitative easing and not increasing rates soon enough contain inflation. Now he is simply striking out at the sector that has benefited most. The management of our country is appalling. There is no plan just flying by the seat of their pants, Biggles style.
You're the best MYSTICFLIP ! Thank you for sharing the knowledge. I've actually gotten a few loans that you've suggested in the past. You bring so much to our tables. You're just full of great helpful info. You've taught me so much in the past few months and I'm grateful. You're an angel in disguise! Keep doing what you're doing my friend. Thanks once again MYSTICFLIP
The decision to keep historically low rates in place for a decade must have been one of the worst ever.( which is saying something ! ) It encouraged far too many to borrow large amounts and kicked savers hard. Mortgage advisers earn a commission, so most don't care if you end up struggling to repay the mortgage.
@michaelscales5996 people need to take personal responsibility, I was 19 when we bought our home, within months interest rates were 15-16%. It wasn’t a new thing and had happened before. When we bought our second home we set a budget Woking on high interest rates, this meant we had it payed off by the time I was 34. The pain is going to far worse this time round, not only have they bought houses they could barely afford, they’ve decided expensive luxury cars were a must as well. Some will literally own nothing but won’t be happy.
@@witlesswonderthe2nd883 Quite right about personal responsibility, but mortgage advisors and car salesmen can be very pushy and convincing when it comes to getting you to agree to take on debt.
The monetary policy since 2008 meant we transitioned to an economy hugely dependent on artificially cheap credit and excessive government debt. It was total madness.
The best way to take the money out of the economy is to squeeze the corporations engaged in greedflation and the mega-rich who saw all their assets increase during lockdown. That's the fairest and best way of dealing with it.
There are also companies in the UK that are squeezed. Retail have very thin profit margins, tescos profit margin is 1.5%, ASOS is nearly bankrupt, harbour energy is being taxed out of existence from windfall tax, they have a net loss of hundreds of millions. And as interest rates go up, companies who functioned on a lot of debt are unable to cope with interest rates
Some of the biggest companys on the very top of the FTSE100 are in a staggering amount of debt and are hurting too. You can complain about prices going up but so are their debt obligations.
@@theguy9067 Lies they are all making record profits
@@anthonyharris2930 lol if they were their stocks would be going up, which they are not :)) If you are talking about companies like shell, sure they are - but their business is overseas mostly
If you squeeze corporations then job cuts will happen as they have targets to meet for shareholders so please stop using this excuse every time an argument comes up about money. How about passing a close to the base rate on to savers? This will a percentage of people spending and take out of the system. I’m waiting now for someone to start by saying yeah make the fat cats richer by giving it to the banks 🙄. I’m saying banks pay people more for saving.
I don't live in the UK anymore, and the idea of landlords' increased costs just being passed onto renters is quite shocking. The fact that they can just do that and the tenant has to fork out or move out shows that there's something deeply wrong in the British way of doing this. For comparison, my landlord is facing increased mortgage payments too, but can't increase my rent by more than 2%, and chooses not to do that, because it's not worth squeezing me out of that money and running the risk that I leave for the sake of a few euros. All he could do is not renew my contract when it's up, and try to the sell the place. The risk is that it then sits empty and on the market for months before he's able to get his equity back out of it. Loading the dice so heavily in favour of the buy-to-let landlord class is a political choice that the UK has made. It doesn't have to be like this.
Yet another person who comments on the PRS without understanding the real problem.
@@gaurasrspublishing Enlighten me
@@frmcf Nub of the UK housing situation = supply/demand. Solution = build more houses (and that's been the solution for over 50 years but no government in that time period has taken it on board). That's it, anything else is just window dressing or completely misses that point.
@@gaurasrspublishing I understand that perfectly, thanks. If you read between the lines in my comment, you will see that. I don't understand your 'window dressing' assertion. There is a real cultural, ethical, and regulatory problem as well. All of this: the supply problem and the regulatory problem are due to political choices that the UK repeatedly makes and reasserts.
@@frmcf "There is a real cultural, ethical, and regulatory problem as well". That's exactly what I mean by window dressing. Over the last 8 years or so regulations/tax/licensing/totally new "improved" rules etc etc have done just one thing ... made things far far far worse for renters. Why? Because not one single one those "improvements" addresses the real issue Supply/Demand. It is genuinely that simple. It sounds too simple to be true and you want to make it more complicated, it just is not complicated. Build more houses for rental and renters have far more choice, rents come down, renters automatically have more power.
I was overpaying my mortgage as much as I could when my deal was at 2.6% interest. The reason for overpaying was to get me below 60% LTV, so I can access the most attractive rates for the next deal. Once I got to my LTV target, I have switched from my 2.6% to 1.14% deal fixed for 5 years. I've paid early replayment charge for this switch, but I knew it was well worth it, as I would get the money back after just 10 months on a new deal. Now I am still on that low rate of 1.14% for the next 3.5 years while watching the craze (or rather back to normal) of interest rates. I am no longer overpaying my mortgage because it is much better to keep savings in high interest rate savings account. The savings money will be then used to repay the mortgage once the curent deal ends (unless rates get back to very low levels again at that point). I could basicaly tell that in my case inflation is helping to pay off my mortgage. It was a lot of luck with the hint of discipline to position myself like that in these dificult times.
Cool story bro
There's no such thing as a "high-interest savings account." If the interest is less than inflation, your savings are being eaten up. You think you've dodged them by fixing your mortgage, but they're getting you with inflation. Either way, they're getting your money.
@@mrjelfs3705 I understand what you are saying but also please note that my savings are at much higher interest rate than my mortgage. So in other words inflation (that contributed to increased interest on savings account) is helping me to repay my mortgage debt.
Well done, you've taken responsibility for your own situation, I'd personally continue to overpay the mortgage to get the LTV down even further for when your deal ends but I can also see your logic in saving too.
@@mrjelfs3705 and if the interest rate on your mortgage is less than inflation your debt is being eaten up, so a 6% rate with 8 or 9% inflation is a negative real interest rate on the debt
Yet another reason why I sold my house in the UK and will retire abroad..... the Conservative Party won't be happy until they have every worker on their knees.
Well aren’t you lucky, maybe give some helpful advice instead of being a bit of a twit about what you’ve done, we can’t all retire now can we😂😂😂😂
@Nigel003.5 Nearly there... land is paid for, but house and solar isn't complete. Still renting in UK whilst I finish these jobs.
@@leonhenry4861 People don't want advice, I've given it before and they are just not interested. Creating wealth is slow and boring and most people think they will never get there anyway.
In Scotland , house prices went up 140% in 6.5 years. Those years were 2002-08. Gordon brown was Chancellor. Sounds like you just took the money and ran.
@@wakey87 you can lead the horse to water, but can,t make the water drink. Yes making wealth is boring but people here stories about the over night millionaires and they want that success. That’s the way it is
Screwed if you do and screwed if you don't. For the first time in a while (UK), people had the chance to buy a house with low mortgage rates and have something to call their own home. So people took it and hopefully didn't go too far out their budget. But now with Inflation sky high they have less disposable income to work with and the money gap between new mortgage costs and disposable is ever sinking. I knew the mortgage rate would go up and i'm lucky that my wife and I are able to soak up the difference (could only get a 2 year fixed, 1 year ago). But there will be many people that can't or if they do, they are simply existing. What I didn't foresee was the crazy inflation rise and even though its more under control in the UK, the fuel prices. I had little choice but to buy a house at the time as I wanted to settle the family down after being an Armed Forces family for 18 years. I wanted a family house that I would live in till the day I die and pass on to my children. By the time I remortgage about Feb next year, i will go from a 2.6% to something like a 6% so £300 pounds more. That's £300 pounds less to enjoy life with the family. We are lucky that we can soak that up as I seen this coming, but there are many people out there that will struggle real hard. Mortgage + Fuel prices + inflation is killing families. So...Do you buy a house when it's cheaper but the monthly cost are expensive or visa versa? With less money in peoples pockets at the moment, I cant see many even placing their toes onto the property ladder as they don't have the cash to save with in order to put down a deposit on a house to begin with. Saving is great if you have money to actually save with and right now, I feel pity for the younger people. People that have their own home and have paid it off (mostly the retired and rich) are the real winners at the moment. No mortgage and high asking house prices. The retired who have seen their house prices sky rocket to crazy amounts over the last 40-50 years. I have voted conservatives my entire life, they used to represent small businesses and those that want to push and do well in life, but those very same people are the ones that HAVE COME OUT THE WORSE. Rich are rich and the poor get benefits that outweigh them even working (and i grew up in a council estate). The tax cut to the rich with Truss to mention a few showed me the true colours of the party. For the rich and totally out of touch to the average Briton, even if they was trying to sell it as increasing investment in the UK. Wrong place and wrong time, by far. So...for some the lower mortgage rates 1-2 years ago was their only chance to get onto the ladder and now their screwed. Screwed if you do and screwed if you dont.
All good points but when did energy bills become part of people's "disposable" income...
Everything said in the video is valid. But actually rising rates will impact another type of debt: car finance. All those people happy to spend £300/month on their car finance will be in for a nasty shock when they come to their next trade in/upgrade date and discover the next deal will be considerably more. Only they also won't own their existing car outright either.
Well said sir. A point conveniently missed by the sensationalist MSM and this chap because the phrase of the moment is "The Mortgage Crisis"
💯 I'll be getting out of the car leasing gig after I return my current car. Prices are out of control and second hand cars are holding their value alot better now. Never been interested in owning something that dropped in price so drastically.
@@Rafiq07 This is all a corrective mechanism. There's too much leverage in the system and people are driving around in cars that they can't really afford. It's pretty clear to me when visiting the UK that people's lifestyles often do not correspond to their real levels of skill, training and productivity. The middle to lower-middle class has had it a little bit too good for the last few decades and it's been propped up by cheap credit and rising asset prices. Something has to give, either in the housing market or in the value of the currency.
@@frmcf you sound like a hater
Hence why I hire purchased my car 3years ago on a 1.9% apr.it’s 3years old and will serve me well after it’s paid off.it’s hybrid also ,so set up for ulez expansion also.
How many times over does a house need to be payed for? Just look at some of them. Old as f, or new built substandard scams that probably won't last 10 years.
and why do the British insist of hiking up the cost of building houses by making them out of thousands of tiny little bricks that have to be all neatly glued together by well paid skilled workers!!!
I've thought exactly the same thing, imagine how much a terrace house cost to build in 1900s and how much money has been made by banks on sale after sale, it's crazy.
@@johnross2924 It's not quite like that as the person who sells the house after paying a mortgage then doesn't need to get another mortgage for their new house.
@@marviwilson1853 but the person who bought the 100 year old house will be getting a mortgage on that 100 year old house, so yes it does work like that 👍
@marviwilson1853 yet each time the house changes hands a bank makes a huge percentage of the value in interest on it
This is the reality when a country kills its own manufacturing base and replaces it with a casino economy.
Times are a changing. They say economies progress from agriculture to manufacturing to technology. The UK has moved onto the latter now.
@marviwilson1853 yeah right....with technology that has created jobs in the gig economy? The UK is a net importer in nearly every published consumer indices and severely exposed to inflation more than any other G7 countries. The UK does not even manufacture tissue papers for God's sake and so when the speculative bubble in the housing market implodes as it bound to be at some point, then be prepared to be transposed for a life back in Victorian Britain.
350k for a 150nyear old 2 up 2 down is madness. A correlation in prices of at least 50% is needed and is gonna happen
You got to protect your huge property portfolio Martin !
You've got to look out for yourself first. Especially when you've lost all that commission income from people switching between 0% interest credit cards
Mortgages have been at an all time low for years. They were always going to go up and now they have. We bought your house in 2020 fully expecting this. I don’t understand why people are so surprised.
I started stacking to SAVE wealth. I've always been the type of person to spend my entire paycheck. I hate having money just sit in the bank. I am under pressure to grow my reserve of $950k. before I turn 60, I would appreciate any advice on potential investments.
I can feel your pains. New guys need to realize the risks that come with all of this. You could lose it all and you could win it all. It goes both ways. Second, what works for A may not necessarily work for B and you should not be a bandwagon investor. A good number of folks are raking in huge 6 figure gains in this downtrend, but such strategies are mostly successfully executed by folks with in depth market knowledge.
@@Mcllwain Factos!! Since the market became extremely volatile and pressure increased (I should be retiring in 17 months), I took the decision to work closely with a financial advisor. It has already been 9 months and counting, and I have made approximately 600K net from all of my holdings.
@@kurttSchuster That's impressive, my portfolio have been tanking all year, tried learning new strategies to gain in the current market but all of that flew right over head, please would you mind recommending the Adviser you're using.
@@tonicruger My advisor is the quite famous NICOLE DESIREE SIMON She has been making a fortune online worth millions of dollars in digital assets for a select few for years. Lately, these types of services have appeared that allow you to copy the results of the experts. She demonstrates how to copy it automatically using that system.
@@kurttSchuster Thanks for the info, i found her website and sent a message hopefully she replies soon.
It is gone, we lived through the zenith of our time. These bourgeoisie individuals in tandem with the corrupt govt. will take down this country like what happened to Rome. My condolences to anyone approaching retirement, you may have concerns over whether your pension pot will stretch to cover the rising cost of living, bad regulatory policies, bad energy policies and insane fiscal policies
I'm 54 and my hubby and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, we are finding it impossible to replace it. We can get by, but cant seem to get ahead. My condolences to anyone retiring in this crisis, 30years nonstop just for a crooked system to take all you worked for
@@ohmakure4716From being financially empty-handed to dedicating months of hard work delivering for Uber eats, I managed to accumulate approximately $20k, which I then invested with Joffrey Adam Smith. Currently, my investment has grown to $128k, and I couldn't be more delighted that you've brought her up in this conversation
Government policy has thrown the future under the bus for decades. The day of judgment is near.
@@ohmakure4716I know Joffrey Adam Smith. I found him on a El Mercurio interview where he was featured and reached out to him afterwards. over $174,000 profit was made last year on my portfolio, more so because his strategy cuts across the major financial markets which I found out generates more profits.
Not just the retirees. You might as well want to empathize with the younger generation. We still have the most part of our lives to life in this sh*thole
They could increase savings bank interest rates
My savings rate just increased from 3 to 4% today
@@danielwood2901 Mines increased
What a ridiculous, draconian policy. How are people still not able to see how badly the deck is stacked against the low and middle classes?
if an increase of "25 quid per month per 100K Pounds outstanding mortgage" is burden for someone, that person shouldn't have been granted that mortgage in the first place. 25 quid is nothing! how is this possible? Who are these people that cannot pay such incremental increase?
Cca £25 to £40 equates only to the latest interest increase by BoE. If you combine all past increases together, it's coming up hundreds of pounds more per month for anyone who is currently on fixed interest which is on average around 2.7%. So out of a sudden, if you are on fixed and it comes to remortgage, you can easily be paying now £400 more per month on the same years term. Facts matters...
But the rate has risen 13 times. 13 x 25 is 325. Plus, most people have mortgages much higher than 100k..
It’s not 25 quid when you look at the total increase. Take my example, on 2% fixed deal in December will roll off to 6% Which changes repayment from £25k per year to almost £40k per year. That’s not a small amount of money to find, particularly when have to earn much more than that because taxes are also high. All it’s done is push us to push for bigger pay rises which is going to worsen inflation.
@@azfellcrowley5860 The bank should have taken these rikes into account. 5% is nothing. But the problem is that the banks like 2008, made tons of BS mortgages with high risks and sold those MBSs to bunch of investors as low risk.
@@lightweightben 1. 25 quid per 100k outstanding. 2. The bank which gave you such a ridiculous mortgage which you can not pay back, must have taken such a simple risk in to account. 5% rate is ridiculously low for this much fuss.
What is the reason why it's following the same pattern as the mortgages in America? If you listen to the reasons we're being given, it seems unconnected to America.
The mistake the BOE is making is that inflation IS transitory. It's already disappeared in PPI. Demand is super weak (inflation was never about excess demand, but short supply) rate hikes are inflating rents and used cars 2 key drivers of Core inflation
And help to buy. People have to pay 1.75% (on the 10%) on the government loan on top of the mortgage increase
I probably will never own a home now 😞
I totally understand that people are going to be poorer. But you seriously could not look at the last decade, get a mortgage on a low fixed rate and think they will stay that way. The post 08 interest rates were mad, it was only going up. If you borrowed to the point you can't take the rates as they are now you need to think about being more reserved. I don't get how many more lessons people need to understand how precarious our situation is.
Inflation in America was really high long before the war in the Ukraine , a lot to do with covid and how it came out of it as a country . But the sad thing is whatever happens there then tends to happen over here and no one was warning people in the Uk when this was going on as if more people had been aware they could have locked into low fixed rate mortgages for 4 years etc
Apparently people of UK , Canada, Australia are in trouble because of uk banking system which squeezes people and makes banks super happy .
I just heard the UK Government in Parliament say that reason for interest rates going up is because of 1) war in Ukraine causing energy prices to increase 2) Supply constraints during Covid. So both the so called causes are down to supply constraints then or a mismatch between supply and demand. OK. But increase of interest rates actually works by slowing the demand for new money being created in form of Dept, so there is less money in the system. I can see how that reduces money in the system but that is not what BOE or Government is saying is the problem. They say the problem is imported inflation not that there is too much money in the economy. SO the conclusion I come to is that the real reason the interest rates are going up is to keep the Pound up. So we do not import even more inflation via an exchange rate imbalance. So here is another LIE then. So the UK economy is hit by an increased cost of imported energy and general inflation outside of the Pound and now also the cost of housing added in. No one is talking about inflation factors relating to Brexit. Brexit seems to a third of the inflation in the UK. So by pushing up costs for households will only cause a recession and not fix the external factors that is taxing UK households. The increasing interest rates will increase demand for pay rises and then the whole spiral starts off. Noting that during Covid many hoarded money because they could not spend it (~10%) So in sort, the problem is not money in the system, so why lie? The problem is worldwide supply constraints, U.S. increase Government spending and Brexit. Chuck in a bit of QE to season the whole thing and serve. Its the lie's or complete ignorance that gets me.
So richest people in the UK will make even more money of the poorest people in the UK lol ! Banks, Supermarkets, Landlords who simply bought home for renters.
Why does it seem most people still think having really expensive houses is a good thing? Even when I was a kid in the early 2000s when all this went mental, I thought what good can come from this.
I had 15 years almost 0 percent interest rates I kept paying in lumps sums Paid off early Took advantage Common sense Unfortunately my council tax is a mortgage Good news, am on low-income Discount on my council tax Street wise TAL
A very good explanation about how interest rate increases do not equally effect everyone. There must be a more equitable way of doing it, for example a temporary vat rate increase and a temporary property tax increase
Agree. Should be a different policy but interesting that interest rate rises are seen as the only solution to tackle inflation.
I agree, I hadn’t realised that the percentage of people with mortgages are actually in the minority. As someone else has mentioned in this thread the government should be taxing the mega rich corporations rather than the working men and women of the country.
Why should I pay more tax because other people go into too much debt? Nobody paid more tax so that I could get a return on my savings did they?
@@pbeeby yes I've always been puzzled by that, there has to be a better way
@@Shybairnsgetnowt1 yes that's a good point too
Politicians and the Bank of England should be looking at militantly clamping down on aggressively-marketed tax avoidance schemes such as Shell company abuse as well as reforming the tax system to help tackle inflation. They should also be clamping down on the greedy people with wealth who buy properties as an investment and not a home, especially foreign investors like Russian oligarchs who hide their ill-gotten wealth in places like London's property market. Instead, these narrow-minded, corrupt wretches are punishing those in society who do not have access to all these shady tax-dodging financial instruments and who are paying their share of tax into the economy.
The HMRC and valuers use the government ONS HPI official UK average monthly house price percentage increases. For example, the government reported a 10.8% increase in Dec 2021 but the real figures are Jan-2021 £249,690 to Dec-21 which is £268,115 which is 7.4%. To be clear my calculations include Januaries Increase that goes back to December and Decembers increase that goes back to November. I include the 12 percentage increases for 2021 but the ONS include Decembers twice. The golden rule of accounting is there are only 12 and if you include 13 you can be in serious trouble. Do the sums yourself and please comment?
We need to stop or scale back mortgages if we want price control
Exactly, plus the big squeeze on landlords the new EPC regulations and Section 21 to weaken landlords to deal with bad tenants. Where is a regulation on bad tenants?! Its crazy.
The problem...BIG PROBLEM is that when rates were historically low there was no way to lock in for 20 years. Bank's seeking profits....quelle surprise.
Not really, if I lent you 300k four years ago at 2% and said you can have it at 2% for a further 16 years I’d be stupid. Yes you get a fantastic deal but as interest rates were always going to rise, they had nowhere to go down any further, I would now be losing out on 5% each year that my money can get in fixed deposit accounts. I would be so happy that my 300k is helping someone out while, the person who earned it (me) would be losing 9k each year interest stayed at 5%. The BIG PROBLEM is anyone who got a mortgage 10-12 years ago should have been overpaying as interest rates were at a historical low, if they couldn’t afford to overpay then obviously they had no spare cash and overstretched themselves when they took out the mortgage. Therefore had no contingency if interest rates increased during the last 12 years. If it was a more recent purchase, as interest rates were never going to remain under 1% forever, then you can only afford the house if you factor in a rise up to 5% and should have fixed in for as long as possible. If you are looking to buy a house now wait 18 months for the prices to drop considerably and interest rates have settled.
@mickkelly8153 but you lend what you borrow which would be lower than what you lend out at. Therefore, the spread is fixed for the lender. Or you initiate a swap where you pay the fixed and profit on the floating part. Either way, money was cheap and wasn't made available to home borrowers.
@@edcoad4930 I would disagree, house prices from 2010 to just prior to the pandemic increased very little, no more than inflation. This is what most homeowners would expect and hope otherwise we would have nothing of value to leave our children. During this time mortgage interest rates were at an all time low, money was extremely cheap and passed onto borrowers, in the same way the terrible interest rate was passed on to savers. By using your point of view, everyone could/should have locked in for 20 years in the year 2000 when the base rate was 6%, they would have missed out on cheap money between 2009 to 2019. I don’t agree with the way in which banks operate but, houses are just like anything you buy that you cannot afford at the time. If I want a £30,000 car and have no savings. 1.) I can save up 6k a year for the next 5 years and more as the car would now be more than 30k or 2.) I can borrow money and get it tomorrow and pay 6k a year plus interest. Money was cheap and now it is back to ‘normal’. Most people with savings of any significance own a house outright, these people endured interest rates higher than the last 10 years and managed to pay off their mortgage. If everyone was now fixed in at say 2% like you are suggesting for 20 years, savers would be getting nowhere near as much as they are currently getting ( 5%-6%) and one day when all these people on 2% mortgage rates have savings they would be complaining that they get nothing on their savings.
a third maybe on a mortgage...but some are on fixed. so it squeezes a even smaller number of people...those who are on variable
Why on earth can’t Martin run things. He’s the man
People just need to sell the houses that they can no longer afford and buy a new one they can. Nobody helped me keep my Jaguar V12 car when petrol prices went up!
Good comment. Made me chuckle. You're absolutely right though. People cut their own cloth. Nobody forced anyone to engage in bad short-term personal finance decisions. I know soooo many people who bought larger houses than they need on the minimum deposit possible who are now consumed by panic. "How will we afford, how will we afford!?! It's so unfair! We need an intervention", yet these people lease multiple cars; go on foreign holidays; smoke; their kids always have new football shoes and kits, wear branded clothes, etc etc. Many people need to stop living in this fantasy world where they buy everything on cheap credit and don't worry about the cost. They're certainly worrying now. And they'll be worrying even more when the car leases end...
@@benghiskahn3673But that's the massive issue the governments now face. How to keep the massive corporations (donors) happy while trying to cut inflation. Our two biggest outlays, houses and cars, have both increased massively in cost, as has food and fuel. I'm surprised it's only at 8.7% tbh.
Government was too busy partying
These people borrowed stratospheric amounts of money over a 25 year period, with very short fixed rate periods, when interest rates were at an artificially low level - with no plan to cover the eventuality of interest rates rising again within that 25 year period... 25 years is a long time: did no one think this would happen? Neither the home buyer nor the mortgage lender? Did everyone really think the interest rates would sit at near 0 for 25 years?
What option do young people have when we are paid slave wages of maybe £30,000 a year and the local houses are £450,000
35 years for me mate.
The problem isn't the interest rates themselves but why they aren't fixed for the entire duration of the mortgage
@jeremiahpoole6526 mines a 40 year mortgage. I can't be blamed for being irresponsible for buying a house now because it was impossible to buy one when I was 5 years old. This is the first chance I've had at buying one and it's not my fault the average homes at 10× the average salary. My boss probably wouldn't increase my salary 150% just because houses are unaffordable
Mysticflip is the best credit repair expert I've ever seeing on YT.The dedication,passion and humor he has in these credit industry is what makes it so amazing.I’m happy it's easy to use on backend but excited to see you give that penny to creditors!
Are we in the sunny uplands yet?
Love this man,.he has helped us for years .very grateful to him.
it's his business not a charity
Sensible analysis, stress test at 3% higher, simple concept. It's a quick return to normal lending rates.
The reason the BoE had to raise rates 13 times, is because most mortgage holders are on fixed rates- so are unaffected. Those who have to remortgage on the other hand, may be ruined.
When are ppl going to realise this has only happened the second after bank bonuses was allowed again
The adult in the room again, thank you Martin, sadly your help as fallen on deaf ears, this government will be only interested in helping the banking system doing a little profiteering for the good old shareholders, god a Tory does love a banker, the public really enjoyed balling the banks out and suffering austerity for what seems like for ever .
I am not a Tory, but I believe Labour were in power during the banking crisis and up until May 2010. What a state they left things in, whether you agree with austerity or bailing out the banks is a matter of opinion, some would say let the banks fail, sure that would have been fun for all. Anyway, many years of austerity to try and help recover from a global banking crisis, yes it took 9 years but things had started to improve. A global pandemic followed by a war in Europe, someone’s got to pay.
@@mickkelly8153 it was a global banking disaster, not caused by labour lol even though the Tory’s and the media did fed this to the public. The Tory’s wanted austerity rather than other measures taken by the rest of the word, under investment and and cuts in public services, and the sell off of a country’s assets, did shock the thinking public, and yes as always the poorest will take the burden of paying the most wile those that benefit pay less or nothing at all.
For about 15 years I've looked at the situation and in my bizzare way, I thought: At parties people tend to binge on what ever is on offer (generally food and drink) After parties people tend to have hangovers. The severity of the hangover is generally proportional to the length of the party and the amount of binging. The party started in 2008, where the banks offered money at astonishingly low rates of interest, low because an 'Emergency' interest rate was introduced. The party (and apparently the emergency) last around 15 years, a lot of people binged. The party is now over. It's time for the hangover. What an absolute shambles, all credit to the BOE and incompetent Govts.
It is not only about mortgage. so it should go up higher and stay longer there... to eliminate all those zombie companies and bubble makers
Most ofd those are funded by VC / private equity, not banks so they'd barely feel it.
and stop the young owning houses and make us home owners lose our homes? just have laws that stop foreign investors buying up streets.
With the pitiful increases in interest rates, it is no wonder that inflation is stubbornly refusing to descend.
Interest rate does not match inflation number to number.
I’d be too nervous to take out a mortgage if there were a chance the interest rate might change
@@snoopy-XV208 I’ve had a mortgage since buying my home in 2016. It’s 3%. I live in the US.
It was avoidable really. How many times have i heard work folk tell me they have borrowed the max . You never do that. Have you not learnt anything from the 80's, they were the first to complain when the rate bumped off from zero percent .
Seeing as we've witnessed unusual low interest rates for the last few years. You shouldn't be surprised that they've gone up. Historical interest rates were usually between 8 and 11% on average. Always best to be prepared. Those that have bought property in more recent times should have been prepared and take higher costing into account
Interest rates were indeed higher in the past, but the income to property price ratio was sharply different. You try and buy a property on the scale I was assessed on twenty years ago of 4x sole or 2.5x joint income and see if that buys you a garage today
Buy what you can afford.
@@derf9465please keep your common sense ideas to yourself 😉
To be fair I don't think anyone was expecting rates to go beyond 6% with loan sizes as they are nowadays, that was certainly my stress test for affordability, not 11%.
@@edc1569 you're probably right but for us that remember those previous years, we would are the most likely to use our judgement to consider the worse scenario. When I bought my first house about 20 years ago the interest rate was about 6% but I always realised that they could increase again and that I was able to afford it. Apparently they may never recover to that low figure again
House prices are too high. too many people got themselves mortgages without thinking about future interest rate rises.
Putting up interest rates wont bring down food inflation
My mortgage will go up £450 a month. It’s unaffordable. No idea what we are going to do. We actually went for a much cheaper house than we could have.
As did everyone who isn’t a boomer! Surely someone could just share their stockpiles of cash? What is the point of these super wealthy people exactly?
@@goych wealth tax is sorely needed isn't of increasing interest rates.
Let me see... - Create money from thin air - Lend it out and earn interest off it - Filter it through fractional banking, extracting all the value off the top, give us the scraps. - Have everyone trade their limited time for it. On top of that... - The company where you work is taxed through corporate tax. - You're taxed through income tax. - Your invested savings are taxed through capital gains tax. - Your spent money is taxed through sales tax. - You're then taxed again through inflation 'The invisible tax '. An endless cycle of theft
In 2007/8 we were told that 'austerity' was the only way out of trouble, and that we were 'all in it together.' During the pandemic we were told that there wasn't time, during the crisis, to check every contract awarded for the supply of equipment, and that, of course, we were all in it together. Now we are being told that the only way to deal with inflation is by raising interest rates. Every 'crisis' is an opportunity to increase the wealth of the very wealthy.
You are talking like using interest rates to control inflation is a new concept. It's not. This is basic economics 101 which even I learnt when I studied economics at A levels. People always look for someone to blame other then themselves. You want to buy an overpriced house at 6 times your wage when interest rates are low without expecting interest rates to eventually go back to 5% then you only have yourself to blame. If you want to take on a mortgage at 95% debt by going for this 5% deposit scheme then you only have yourself to blame. If you voted brexit when the UK only main source of income comes from financial services and have no major manufacturering industries then you only have yourself to blame. If you believe in supporting Ukraine on this level and imposing sanctions on Russia which will affect trade on your everyday goods then you have to be willing to accept it will affect your mortgage.
@@tanveerUKhan15 You make quite a number of interesting points. I would like to reply to them bit by bit. Of course interest rates are used as one of the ways to tackle inflation. But, in my opinion, interest rates need to be considered alongside other means.
@@tanveerUKhan15 It is easy to blame people for taking 95% mortgages, but with no real social housing built since the 1970s, and with sky high rents, what option do people have?
On your brexit point, I can't disagree that it has been an economic failure.
@@tanveerUKhan15 On the war in Ukraine... There is so much to say. My position is that Russia had no option but to move into Eastern Ukraine. So much hypocrisy in the UK about the situation.
I'm not sure how we didn't see this coming!
Paying more helps lower inflation, but where does the "more" go?
First of all.Thank you for making the work environment so friendly and taking your responsibility seriously and completing the work gracefully! You deserve so much. He does what he says he is going to do and his ethics are of the highest quality. MYSTICFLIP
Come on channel 4, subtitles with your videos please
I'm suprised no one has advised those on a Fixed Rate Mortgage to start paying more towards their Mortgage so when their Fixed Rate Term Ends, the outstanding interest wouldn't be as high if in comparison you paid just your set monthly installment. I honestly reckon simple advise like this can help some people not have a huge impact later on the future 😶
Every spare penny throw at mortgage, end it quicker , Payless 👍
I’m a mortgage adviser, I do that, and I would hope most other do too. But people have to make their own decision on that, and as a result they normally don’t take advantage of the flexibility that they’re made aware of when they take the mortgage, although some do. But when utilities are so much higher , as is food, child care, and the effect off the pandemic etc , people just can’t pay extra . In theory it’s a good idea.
People don't want to give up their holidays abroad to pay more mortgage in advance. People cling to their lifestyle as much as they can, until they realize they are too deep in debt.
Young people are too poor to invest anything. I'm 30 and never had a payrise in my life in the NHS
@@ilikelampshades6 one thing I said for years now is that there will be a modern civil war in the country if this goes on much longer. I really fear that and hope it doesn’t happen. But the open migration that none in power will stand against through fear of being branded a racist is ridiculous and dangerous. Foreign criminals on various levels have already come here unchecked and vomited terrible crimes, terrorism juts being one of them. given whatever benefits are required, and people won’t stand for it much longer our whole society is a ticking time bomb, maybe part of a bigger plan.
The BOE are increasing interest rates to stop people spending and that’s normal if inflation is being driven by consumer spending the whole issue is inflation at the moment has nothing to do with people overspending, inflation currently is due to high food, energy and other contributing factors but NOT overspending by the consumer, so how does putting up interest rates help……?? It doesn’t and this is evident as the previous 12 rate increases have done nothing to bring down inflation proof that consumer spending is not the cause, when inflation is caused by non consumer spending you leave interest rates alone, the Bank of England governor Andrew should be going to the old Bailey is totally useless!!
My fixed rate has gone from 2% to 6%... Last night alone it went up by 0.5%. I would usually lock in for 5 years but this time I'll only do 2 and overpay as much as possible.
Wow you have spare cash to overpay!
More help for people with mortgages !! What abt those who dont have mortgage and a house ?? More inflation to get screwed !!
The amount of hoops us honest taxpaying people have to jump through just to buy a house when others dont work or pay anything into the system and get what i have but can afford holidays and new phones and cars makes me sick
I 100% agree. I was perfectly appauled and horrified when I learnt that billionaires make £15,000 PER SECOND. Some people earn that in a YEAR, but at least they EARN it.
@@SevenEllen The rich literally make money from money. Even in a 3% savings account if you put millions into it that is alot of money for what is zero productivity and unearned income
Alvin hall is the money saving expert. This bloke is the money spending expert. He has spent 20+ years getting people to borrow and switch the cash between accounts where her gets commission on every switch people make. Now he has some cash he makes out he is concerned about you, he isn't. what he is concerned about are the interest payments on his extensive property portfolio and he will use you and the airtime he gets on the msm in a battering ram against politicians to save himself some cash.
A valid point of squeezing from 1/3 of the population to bring back inflation. Isn't that the irony when people say the ways rich gets richer
Those that overleveraged themselves have no one to blame but themselves
The problem is both govenments have been chanpioning low inflation, low interest rates for decades. So people simply don't expect this.
Time to raise rent to match mortgage inflation & housing inflation. 20% increase per year - it must be done to maintain passive income from those greedy lazy renters, you know, the ones who do most of the work.
Thanks Martin
There is a problem with the BoE raising interest rates, so as to prevent people from spending and (in so doing) counter inflation. The problem is that their spending isn’t the cause. The cause was, originally, high natural gas and energy prices. This led to increased fuel costs everywhere and the illusion of “inflation” but it is not true inflation. (In the sense of true inflation being a general increase across the board due to a large majority of different costs increasing, such as wages, materials, etc.) It is specifically the fuel problem which needed to be dealt with, directly, and that’s a very focused target. The BoE needs to be held to account, and potentially fined, for making the problem worse for those affected by the fuel shortage already. It should not be reacting by adjusting interest rates which is an unrelated factor. If my car is empty of fuel, I don’t address this by stopping eating. I have to find ways to get fuel.
Yes and it's those who own outright make the rules!!!
Absolutely stunned how Truss & Kwartang can walk the streets being safe from harm. During Kwartang & Liz Truss's term, the mini-budget resulted in a depreciation of Pound Sterling, an expected increase in interest rates affecting future mortgage rates, and financial instability. Currency fluctuates, but the enormous spook in the market during their period is still being felt today. The interest rates rose exponentially after the mini-budget & ain't recovered since. The verm1n were the clear catalyst. Martin Lewis said somet similar & I rate he knows his onions. I wish anyone struggling with their house payments all the best. I also hope all the (none Windsor, Kensington, Mayfair silver spoon licking) - hard working Brit's who make this country great, all the best during these difficult times. Before we know it the Tories will be dust, rear view mirror legacy stuff - and order of equilibrium will be restored.
I am sorry you failed to mention on the week of the budget the federal reserve raised USD interest rates by .75% This was Wednesday night UK time, the next day the Bank of England only raised base by 0.25%. The world markets had less than 24 hours to digest this before the mini budget. I agree the mini budget was wrong but the drop in the pound was a result of the bank of england failing to keep in lockstep with the fed. The base rate is only a 24 hour interest rate. Mortgage rates are determined by Treasury bond rates and they provide an indication of the rates banks can lend for for a fixed term. These are rising from a very low base in an enviroment of very high inflation. Why would an international investor put his money into a 2 year gilt for a 1% return when the pound was falling in value at more than 10% a year due to inflation. Treasury bonds have a yield inverse to its price. The interest on a treasury bond is the difference between its sale and redemption price. As less people buy the bond the price of the bond falls and the yield rises. A final point 86% of the Treasury Bond market is US treasury bonds. The yield on these bonds have a heavy influence on UK treasury bonds. The USA is in effect bankrupt. It takes in $4.6 T annually in taxes which will just about cover its fixed obligations of Pensions, Medicare, social security and the interest on its debt. Everything else is now funded out of new debt. It has $32T of Treasury bonds on which debt is paid and over $160T of non interest bearing financial obligations. It is running an annual fiscal deficit of $1.5T which will rise to $2.5T when the actual interest paid on its debt rises to current market rates on its bonds. After the USA confiscated all Russian money in its markets a lot of countries are looking to get their money out of US dollar bonds Hence the new BRIC currency being introduced. On top of that the US social security fund a major bond investor is now selling bonds to finance social security payments to baby boomers. This means high US interest rates and in turn high sterling rates. As to anyone who bought a house lately when house prices had never been higher in relation to average earnings in the history of the world, whilst interest rates had never been lower than in the history of the world, whilst the buying population 21-55 years old demographics were collapsing due to baby boomer retiring and selling their house for pension funding. What do you think was going to happen??? Its not the governments fault that you entered into the largest financial transaction in your life and yet you failed to do any meaningful research? As for Labour they have never in their history managed to govern without spending more than they collected. As to their green energy scheme it does not add up. Any knowledge of Return on Energy invested shows that all of these green schemes will simply mean that we will end up with more expensive energy which will be marginally greener and will make no difference whilst china id constantly opening new coal power plant.
not many options available. a powderkeg just waiting for the touch of the fire paper..perhaps should bring back some methods of old where people where unhappy with their 'leaders' or unreasonable demands pushed onto them where dealt with and examples where made...
Yes
Too many ads in comments😮
Fat and rich are spending. Try and stop the boomers from spending.
You think all boomers are rich do you? The wealth flows from the 98% to the 2%. The 2% have more money than they could ever possibly spend, or us even imagine. The rest of us are poor, just various degrees of poor. Even someone with a million is poor to the 2%. A million seconds is 12 days, a billion seconds is 31 years. That's the disparity level we are talking about here between a millionaire and a billionaire. To the 2% who have BILLIONS, the rest of us are just fleas. Fleas they can exploit. Some "boomer" owning a million pound house because prices have gone up isn't the problem, it's the mega rich owning more wealth than whole countries.
It is 50% more expensive to live in London, compared with 3 years ago. When salary cannot cover your basic needs it make no sense continue working.
You think this is the end? This is not the end. This is the beginning.
Martin Lewis & Mick Lynch for PM. Imagine how better off the country would be
Wonderful thought. ^_^