Mortgage Rate Rises

LiE said:
Personally I don't see it going down. The super low interest rates we've become accustomed to is not the normal. What we have now is a return to normal interest rates.
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The only way these rates these rates are gonna stay "normal" is if the massive debt this country is carrying suddenly reduces or disappears.
Gov, business and personal debt is at an all time high. With the current rate we are on brink of recession so they cant stay this high for long.
 
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LiE said:
Personally I don't see it going down. The super low interest rates we've become accustomed to is not the normal. What we have now is a return to normal interest rates.
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IMHO, they are quote a bit higher than "normal" but that's just based on the rate pre-2008 crash. 6% was there but it was on those Northern Rock Together style mortgages where you could borrow 115% LTV.

I thought 60% LTV rates were all around 4-5% back then.
 
LiE said:
Personally I don't see it going down. The super low interest rates we've become accustomed to is not the normal. What we have now is a return to normal interest rates.
Click to expand...

Boomers paid off all their mortgages now on super low rates can now enjoy that juicy percentage on their savings :D. Sometimes wish I was born 10-15 years earlier!
 
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Back in April I was annoyed at having to refix at 3.99% after watching it drop from the highs of ~6% following the disaster that was the mini budget... now it looks like I may have done OK.

I just hope that in 5 years time things are a bit more stable... we can but hope!
 
kevman said:
Sorry - you meant mortgage rate not BoE rate.

What kind of product did you get its not something ive heard of before?
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Yep, mortgage rates not BoE rates.

5 year fixed, 10 year term with Santander. 5.79% 100k borrow.

Product 'KS39R'

Early repayment penalty (ERP)
5% of the amount repaid until 02/10/2025 - max charge £5000
3% of the amount repaid 03/10/2025 - 02/10/2027 - max charge £2,488
1% of the amount repaid 03/10/2027 - 02/10/2028 - max charge £651

Max ERP £5200

You can make additional capital repayments of up to 10% of the loan balance in each calendar year
Overpayments in excess of 10% may attract an early repayment charge, on the excess amount


Some lenders allow a switch to a lower interest rate deal, others do not (what my mortgage broker told me)
Virgin money (same deal 5.72%) did not allow a switch to a lower rate deal, Santander did. The total cost of deal between the two was something like £250 / £3 a month
 
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Richie said:
IMHO, they are quote a bit higher than "normal" but that's just based on the rate pre-2008 crash. 6% was there but it was on those Northern Rock Together style mortgages where you could borrow 115% LTV.

I thought 60% LTV rates were all around 4-5% back then.
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In 2006 we took a 75% LTV fix at iirc 4.79% against a base rate of 4.5%. Base rate then rose to a peak of 5.75% and we switched to a +0.59% lifetime tracker on 60% LTV in early 2008 (6.09%) Can't remember what fixed rates were but they didn't appeal to me at the time as I expected rates to fall following the Northern Rock fallout etc.

Rates of around 5% are very much normal until 15 years ago but I accept that debt levels and house prices are a lot higher now.
 
No wonder banks are so rich.
I used to think a mortgage was a reasonaly low cost (until I looked into mortgages and interest rates and got one myself 5 years ago)

People dont realise that at 5.79% the interest over 10 years to borrow 100k is £32,000 at £1100/month (so you pay 32k to borrow 100k)
At 2.21% the interest over 10 years is £9150.

Christ, in 1979 when rates were 17% the interest on 100k over 10 years would be 235k at that monthly cost! So your balance would go up unless you pay £1750 a month. Then the interest is 108k
 
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Dreading our fixed term ending in 2025.

Looks like beans on toast for life is on the horizon. That and not being able to afford to drive. Oh well, was worse in the 70s so need to keep that in mind.
 
Guest2 said:
Christ, in 1979 when rates were 17% the interest on 100k over 10 years would be 235k at that monthly cost! So your balance would go up unless you pay £1750 a month. Then the interest is 108k
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Not that anyone had a 100K mortgage in 1979 but yeah, would have been nuts.
 
Screeeech said:
Anyone here using the "property log" for Google chrome? I just came across it, and it's pretty handy as you can see how much current listings on Rightmove have been reduced by, how many times and when,
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Nice one. Of particular use for new builds I think as they like to obfuscate price changes by re-issuing ads etc.
Mark M said:
Can anyone point me to a good mortgage overpayment calculator? Im looking at how hard Im going to have to graft to get the mortgage paid off in 15 years if possible!
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Keep in mind a lot will probably change in 15 years. Personally I'd just decide to pay off as much as you can afford (without incurring fees) and adjust that as you go along. Most people earn more money when they get older, but they also have life events like marriage/divorce/kids/inheritance etc that change things (within 5 years of taking out my last mortgage I'd inherited money, got married and had baby). In short trying to predict what your disposable income will be years into the future is very hard, so I wouldn't set yourself a target date. Maybe you can do it in 12 years, maybe it will take 18, who knows.
 
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Guest2 said:
People dont realise that at 5.79% the interest over 10 years to borrow 100k is £32,000 at £1100/month (so you pay 32k to borrow 100k)
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To play devil's advocate, perhaps people don't realise how long 10 years is. If paying £32k to borrow £100k feels like a lot it's just because you've got to keep paying interest on a fair chunk of capital for many years. I'd say its pretty reasonable to get a six-figure sum up front. It's only a "lot" because you're choosing to borrow for a long time, paying it back quicker would mean less interest, which is as it should be.
If you go to a payday loan company it might 'only' cost you £20 to get an advance of £100 but you're paying that back in a month.
Furthermore in 10 years time the final interest amount paid of £32k is worth less than it is today due to inflation. Based on history, it would not be unreasonable to expect a house bought for £100k to be worth more than £132k after 10 years anyway (an average of 3% property value increase per year would put it over £134k).
 
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HangTime said:
To play devil's advocate, perhaps people don't realise how long 10 years is. If paying £32k to borrow £100k feels like a lot it's just because you've got to keep paying interest on a fair chunk of capital for many years. I'd say its pretty reasonable to get a six-figure sum up front. It's only a "lot" because you're choosing to borrow for a long time, paying it back quicker would mean less interest, which is as it should be.
If you go to a payday loan company it might 'only' cost you £20 to get an advance of £100 but you're paying that back in a month.
Furthermore in 10 years time the final interest amount paid of £32k is worth less than it is today due to inflation. Based on history, it would not be unreasonable to expect a house bought for £100k to be worth more than £132k after 10 years anyway (an average of 3% property value increase per year would put it over £134k).
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Good points. Also, I could have taken a lower cost of deal mortgage but the monthly rates would have been much highter (£800 higher) I opted for the safety net incase of emergencies and to overpay instead of leave myself short.

My property has increased by about 3% every year for the past 5 years too
 
lemonkettaz said:
Dreading our fixed term ending in 2025.

Looks like beans on toast for life is on the horizon. That and not being able to afford to drive. Oh well, was worse in the 70s so need to keep that in mind.
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One year to the day till our 2% fix ends, really hoping things calm down before then. Good there's some positives, inflation slowing and more competitive deals, can only hope that continues:/
 
Guest2 said:
Christ, in 1979 when rates were 17% the interest on 100k over 10 years would be 235k at that monthly cost! So your balance would go up unless you pay £1750 a month. Then the interest is 108k
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1970s​


This was a rocky decade with widespread unrest and hardship on the one hand, and a boom in home ownership on the other.

The mortgage market took off and house prices flew. At the start of the 70s the average house price was £4,378.

In 1974, the first microwave was sold and four years later the VHS video recorder meant we never had to miss our favourite TV programme again.

Our average earnings climbed too. But this was when the gap between wages and house prices began growing wider and wider.

The cost of home ownership continued to rise at lightning speed. By the end of the decade, the average house price had quadrupled to £21,966.

Historical House Prices – Property Prices UK | SunLife

How have house prices in britain changed since 1950? See a historic timeline of UK house prices and how prices of everyday items have changed.
www.sunlife.co.uk www.sunlife.co.uk




Rather meaningless considering the average house price was £21k.

Average male salary was £6.5k around that time so house prices were only 3-4 x salary

Now they are nearly 10x.
 
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Guest2 said:
Yep, mortgage rates not BoE rates.

5 year fixed, 10 year term with Santander. 5.79% 100k borrow.

Product 'KS39R'

Early repayment penalty (ERP)
5% of the amount repaid until 02/10/2025 - max charge £5000
3% of the amount repaid 03/10/2025 - 02/10/2027 - max charge £2,488
1% of the amount repaid 03/10/2027 - 02/10/2028 - max charge £651

Max ERP £5200

You can make additional capital repayments of up to 10% of the loan balance in each calendar year
Overpayments in excess of 10% may attract an early repayment charge, on the excess amount


Some lenders allow a switch to a lower interest rate deal, others do not (what my mortgage broker told me)
Virgin money (same deal 5.72%) did not allow a switch to a lower rate deal, Santander did. The total cost of deal between the two was something like £250 / £3 a month
Click to expand...

If making overpayments is important to you then check out a First Direct mortgage - as far as I can tell there are no repayment charges as long as you don't clear the mortgage in the term duration.

Assuming your mortgage is 60% LTV then the rate is the same at 5.79% with the fee saver mortgage or 5.64% with a booking fee of £490.

No affiliation, just that I've been looking myself!
 
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