PR scare story will increase your mortgage, claims Telegraph

24 August 2010

Now seems as good as time as any to scare the living hell out of people, so that's what the Telegraph have promptly gone and done today:

Bitterwallet - Telegraph mortgage scare story

Yes, everything is going to turn to shit very quickly, because interest rates are going to soar through the roof. What is this entirely hypothetical doomsday scenario based on, then?

A leading think tank warned that the Bank of England may have to increase interest rates sharply – to as high as 8 per cent - to choke off soaring inflation. Once lenders have added their profit margins, it could push the rates offered to home owners to 12 to 14 per cent, according to personal finance website Moneyfacts.

Of course these numbers aren't entirely relevant to the reader; what the Telegraph needs to do is frighten them with an example expressed in pounds that'll make them break down on the spot:

"At 14 per cent, borrowers would pay £1,750 a month on an interest only mortgage of £150,000. It compares with a monthly mortgage payment of £313 for those with the same mortgage, but paying a rate of just 2.5 per cent."

Suffering Jesus! Surely that would lead to tens of thousands of mortgage payments being defaulted on, homes beings repossessed, property values plummeting and banks that are already in the financial mire being stuck with negative equity? An- oh, wait a minute, did you say:

"...according to personal finance website Moneyfacts."


You mean you've based this story on a press release from a website that provides price comparisons for financial products? Like mortgages, for example? I see.

The Telegraph piece is puffed out with a couple of other expert views, but not one single quote to provide any balance, not even to suggest it might not be as bad as all that. Of course there's a chance it could happen - there's been talk of interest rates rising for months - but there's nothing like a proper scare story to grab a few column inches, is there?

TOPICS:   Economy

14 comments

  • ShakesHeadSadly
    This is why I don't read newspapers. The Telegraph has dropped to Daily Mail standards. "BAN THIS SICK FILTH"
  • MrRobin
    Blah blah blah, daily DOOM. We're all doomed etc etc etc.
  • LanceVance
    We'll all be dead from legal highs by then anyway.
  • Paul
    But Moneyfacts has the word 'facts' in its name! They must be true!
  • Way
    What a load of bull tripe
  • Daniel Z.
    Apparently we could all be hit by a meteor within the next two years two... Individually at that!
  • Mark H.
    This may not happen however I do feel we are currently in the lull before the storm with regards to the economy.
  • Noodles
    @ way..you are a load of bull trip..falling for such a scare story..now crawl back to ur hole and live ur meaningless life. @ daniel z...no ur not funny..crawl back under that rock u utter waster
  • Charlie O.
    Cheers for the head up, I've put my house for sale and going to downsize before it happens.
  • Jonny S.
    Sell up now and buy a desert island!
  • Nobby
    Savings rates will stay at 0.01% though.
  • Mikki C.
    This is a great post. We're always looking for smart resources to share with clients and colleagues, and your piece is definitely worth sharing!
  • Dwayne B.
    I apologize I cannot add more to it as I have no practical experience with real estate, but can you help me as you appear like a wealth of knowledge. I live in the united kingdom and I have possession of a 1 bed property. I would like to acquire a larger home to live in and rent my own flat. Is there any way of steering clear of a buy to let mortgage loan and acquire the usual mortgage to assist me buy my house?
  • Mortgage
    Thank you for the good writeup. It in reality used to be a entertainment account it. Look advanced to more introduced agreeable from you! By the way, how could we keep up a correspondence?

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