Interest rates now the highest since 2009 and only above.
Mike Harris of Cribstone Strategic Macro is one of the analysts who believes the UK is gaining momentum faster than the rest.
In Europe and America, home loans are long-term, at least 10 years, sometimes 20, and in the US, unusually 30 years.
During the term of the mortgage, borrowers may pay more in general or not, but they are confident that if they can afford the first mortgage payment, then without a catastrophe they will be able to pay the last.
Here we prefer rates for 2, 3 and 5 years.
The rationale offered by bankers and mortgage brokers who sell products and accept commissions is that it is impossible to know what the rates will be in the future, so why tie yourself in?
Isn’t the agile ability to talk every few years much better? (For brokers, of course.)
Short-term deals mean that there are far more people in the UK than anywhere else who will soon have to get new credit deals that cost more, and perhaps much more, than they pay now.
Some just can’t handle it.
Former Bank of England chief economist Andy Holden said Monday: “We have a whole generation of mortgage holders who have seen almost no interest rate hikes. It will be a big shock to the system. “
Britain has always preferred short-term growth, valuing the pound won today over the two saved tomorrow. The nation is not so much shops as players.
We are about to lose the last bet.
Does short-term mortgages leave us more at risk of recession?
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