Mortgage Rate Rises

alexakasloth · 14 Dec 2025 at 12:44

How many buyers of a £220k house have a deposit of £60k? Around here that's at first time buyers house and a deposit would realistically be 10%. Over 15 years at 9% that's nowhere near the value of a house.

Whilst I pay for upkeep I guess that's why my neighbours rent is about £400 more a month than my mortgage.

unwashed potato! · 14 Dec 2025 at 13:27

fez said:
And how long ago was that? Its never a simple calculation like this. Most people who have this sort of outcome have had a house for a long time to get to where they are making this comparison from.

If your money in the markets would have returned 9% then you need to beat that in your housing calculations. People always seem to completely ignore this.

"Oh I am paying **** all mortgage after 15 years whilst the people that didn't do what I did are paying X". Yes, and if you had rented during that time and stuck the £60k you put into your deposit into the markets you would have enough money to buy the house outright now. Thats ignoring the cost of keeping and maintaining a house. All the costs involved in buying a house etc.

People do very very simplistic sums to come to these broad conclusions. Yes if you literally did nothing with the money you would have been paying towards a mortgage and just spent it then of course you will be far worse off. Thats not the comparison people are making that suggest that renting isn't quite the mad decision some suggest.

Exactly the point I was making earlier but you've better said it.

As much as I'm about to definitely be paying less monthly mortgage than rent when I renew at the start of next year, I also paid £8k to redo my driveway last year, £6k for the bathroom, £10k for utility room the year before, £3k for the wc. And all the other small costs to keep things working and up to scratch.

Buying vs renting, buying will always be better, but it's not a simple case of rent vs mortgage.

alexakasloth said:
How many buyers of a £220k house have a deposit of £60k? Around here that's at first time buyers house and a deposit would realistically be 10%. Over 15 years at 9% that's nowhere near the value of a house.

Whilst I pay for upkeep I guess that's why my neighbours rent is about £400 more a month than my mortgage.

I think the £60k figure the user quoted was a mix up from my comment

sparkymark75 · 14 Dec 2025 at 14:24

unwashed potato! said:
I see now HSBC went from the best rates to one of the worst. Now the price I can get is £1240 per month. Hoping it'll drop enough by end of Feb so that I can be below £1200

HSBC are always very competitive so strange that. Maybe just lagging behind. How much difference are we talking % wise?

My 5 year fixed with HSBC comes to an end in My 2026, that's going to be a sore one coming off 1.64%

fez · 14 Dec 2025 at 14:28

alexakasloth said:
How many buyers of a £220k house have a deposit of £60k? Around here that's at first time buyers house and a deposit would realistically be 10%. Over 15 years at 9% that's nowhere near the value of a house.

Whilst I pay for upkeep I guess that's why my neighbours rent is about £400 more a month than my mortgage.

It was a broad generalisation. Without a specific set of figures for everything its all conjecture but its based on doing hypotheticals.

Lets say your do stick a £22k deposit down on a £220k house. Over 15 years that 22k would become £85k if you got a 9% return every year.

Lets say you are paying off your £198k mortgage over 25 years and over the last 15 year period you manage to average a 4.5% interest rate (renewing mortgage, fees etc). I don't think 4.5% avg. is unreasonable.

In year 15 you will now have about £105k left. You've paid off about £93k of capital and about £106k in interest. Another way to look at it is that you have paid about £600/month in dead money servicing the interest. Then you start to get into the costs associated with owning a home and it all adds up. People always like to compare "what I pay on my mortgage to the rent I would pay" when its not the same. Rent is dead money, interest is dead money.

The only reason owning a house has been broadly speaking a good idea financially is because house prices have been going up so much that the money you are "making" is very high in most cases. The issue with that obviously is when people want to climb the ladder and the house they want has also gone up by X% which in real money terms is far more than their own home. So yes on paper they have move money but the amount of debt they are taking on to afford the house is crazy.

In a future where house prices stagnate and in places regress, house ownership really isn't a no brainer.

alexakasloth · 14 Dec 2025 at 14:58

Fair point @fez , comparatively to previous years there has been stagnation in the rising of house prices, noticeably since the jump after the pandemic.

fez · 14 Dec 2025 at 15:16

alexakasloth said:
Fair point @fez , comparatively to previous years there has been stagnation in the rising of house prices, noticeably since the jump after the pandemic.

Yeah, house prices going a bit mad during COVID based on high demand from wealthy Londoners fancying a move to the countryside. People broadly becoming far wealthier due to not having anything else to spend money on/saving much more from no travel/activities. That blew prices up and then interest rates went from **** all to a lot. I imagine that they will stagnate for a few years more before they start to climb again but honestly, the world is a very twitchy place right now. I think something huge is going to happen in the next 5-10 years personally.

unwashed potato! · 14 Dec 2025 at 15:35

sparkymark75 said:
HSBC are always very competitive so strange that. Maybe just lagging behind. How much difference are we talking % wise?

My 5 year fixed with HSBC comes to an end in My 2026, that's going to be a sore one coming off 1.64%

From memory it was something like 3.48 to 3.71 hsbc

unwashed potato! · 14 Dec 2025 at 17:00

fez said:
It was a broad generalisation. Without a specific set of figures for everything its all conjecture but its based on doing hypotheticals

Add in stamp duty, agency fee between sales if moving, all costs not thought about when people compare to renting.

Forgetting house prices increasing (which only really makes a difference if it's your second/third house as the next house you buy also increased), houses generally are just a massive cost.

if someone can make a house make any money, e.g renting out part of it, then you're really winning

Hagar · 14 Dec 2025 at 17:01

fez said:
In a future where house prices stagnate and in places regress, house ownership really isn't a no brainer.

I still say you don't really want to renting on a fixed pension income even if house prices are regressing. It's only if you have to sell that that may become a problem.
Having rent out of the picture is a big thing in older age.

fez · 14 Dec 2025 at 18:25

Hagar said:
I still say you don't really want to renting on a fixed pension income even if house prices are regressing. It's only if you have to sell that that may become a problem.
Having rent out of the picture is a big thing in older age.

No, in general you want to own a property in retirement but if you have made sensible choices alongside choosing to rent for your working life there is no reason you can't have enough to buy a house outright.

slinxy · 15 Dec 2025 at 06:07

The four elements that has a 80% impact on someone’s wealth is income, housing, motoring and taxes.

while some people shop around trying to save percentages on their mortgage, they really should be asking if they need the type of shelter they have or if they just want that type of life style.

A girl I work with is in her late 30s living with are long term boyfriend. No kids and at their age, it’s now unlikely but they have a 4 bedroom house in a catchment area for a serval good schools.. 3/4 of a million mortgage. the house needs a load of work doing to it but rather than uplifting the whole house to a standard where each room is usable, they are concentrating on getting the old extension knocked down and rebuilt at the cost of ~75k. Meanwhile they have to furnish every room, pay council tax etc etc. Some see it as an investment but finance it as a passion project and unless they are willing to downsize, the appreciation gain; if any will never be realised.

adam cool dude · 15 Dec 2025 at 07:01

unwashed potato! said:
Forgetting the deposit though. I was told to buy a house as early as possible, I dilly dalleyed and bought later than I probably should have. But I sold £60k stocks to do that. Stocks that would be worth a lot more now than my house.

That's why I'm curious who it is that told them to rent over buying

I was in the same boat. We bought our house at 23 because it was the thing I was conditioned to do. Last year I took equity out of my house even though my mortgage was basically finished to fund a passion and retrain in my late 30's. Looking back at it now I should have took the deposit and trained there and then. I would most likely be several hundred thousand better off net worth but I have my health and would have never met my other half all the way back then. Life is all a game.

Chris344 · 16 Dec 2025 at 20:16

fez said:
Not sure this is quite the decision you are suggesting. Every month you are paying the higher rate you are essentially digging a hole vs the fixed rate. So even if you get these 2 drops and even if you get a third or fourth, will you actually have been better off within 2 years vs the fix?

The product fee one the fix was £1999 vs £999. So with a .50% base rate drop I’ll be in roughly the same position. We are looking to move, and would like more options so the tracker works best.

fez · 17 Dec 2025 at 08:28

Chris344 said:
The product fee one the fix was £1999 vs £999. So with a .50% base rate drop I’ll be in roughly the same position. We are looking to move, and would like more options so the tracker works best.

Thats an absolutely ridiculous product fee on a 2 year mortgage! £83/month extra just on the product fee. God I hate mortgage lenders. Make tens of thousands from you and still have the cheek to charge a fee. They should be banned. The rate should be the rate.

sparkymark75 · 17 Dec 2025 at 08:35

fez said:
Thats an absolutely ridiculous product fee on a 2 year mortgage! £83/month extra just on the product fee. God I hate mortgage lenders. Make tens of thousands from you and still have the cheek to charge a fee. They should be banned. The rate should be the rate.

Yup. I’m not even sure why the rate can’t be fixed for the lifetime of the mortgage if you wanted to like a regular loan.

413x · 17 Dec 2025 at 08:38

fez said:
Thats an absolutely ridiculous product fee on a 2 year mortgage! £83/month extra just on the product fee. God I hate mortgage lenders. Make tens of thousands from you and still have the cheek to charge a fee. They should be banned. The rate should be the rate.

Yep.
You have to calculate the fee in manually.
Better to be banned and make it easier yo compare mortgages.

I bet there's a hefty erc too.

413x · 17 Dec 2025 at 08:41

On renting vs owning.

I'm really questioning if owning is the right thing for me.

House prices look to be flatlining, and the economy doesn't look great long term.

My main reason is I don't like being stuck in one location for long. And I'm itching to move. But stamp duty and other costs make this ridiculous.

Its a really hard decision to break from the mould. But yes, I'm really questioning if this "sensible" life pushed on us is really for me.

It would be a bold choice to sell and not buy. But that's what I want to do.

Sythe79 · 17 Dec 2025 at 08:44

sparkymark75 said:
Yup. I’m not even sure why the rate can’t be fixed for the lifetime of the mortgage if you wanted to like a regular loan.

There's nothing to say you couldn't get a 25-year fixed, It's generally how American mortgages work. It's not better tho, as the rates tend to be higher than you get here on 3s and 5s to make up for it.

unwashed potato! · 17 Dec 2025 at 08:48

413x said:
House prices look to be flatlining

This surely is irrelevant though, or if anything a good thing given a lot of costs are based on a percentage.

Yeah your house hasn't gone up in value, but neither has the one you'd buy next.

So you'll save as the agency fee of 1 percent or whatever, will be on a lesser value house

fez · 17 Dec 2025 at 09:02

sparkymark75 said:
Yup. I’m not even sure why the rate can’t be fixed for the lifetime of the mortgage if you wanted to like a regular loan.

You can certainly do 10 year fixes but I imagine you can do longer but they are not commonplace.

413x said:
Yep.
You have to calculate the fee in manually.
Better to be banned and make it easier yo compare mortgages.

I bet there's a hefty erc too.

Yeah, its all smoke and mirrors to confuse people with the headline rate. Make its so much more work to calculate.

Cashbacks
ERC
Rate
Fees
Potentially legal fees
Duration of fix.

It should be a very simple "this is the rate for X years". This is the ERC. Thats it. Nothing else. Then everyone can say "look, this mortgage is cheaper over 2 years than this one over 5" (for the initial 2 years) rather than "Hmm, so this 2 year fix is cheaper than the 5 but I will have to get another fix in 2 years and probably pay another fee to do that so....".

413x said:
On renting vs owning.

I'm really questioning if owning is the right thing for me.

House prices look to be flatlining, and the economy doesn't look great long term.

My main reason is I don't like being stuck in one location for long. And I'm itching to move. But stamp duty and other costs make this ridiculous.

Its a really hard decision to break from the mould. But yes, I'm really questioning if this "sensible" life pushed on us is really for me.

It would be a bold choice to sell and not buy. But that's what I want to do.

If you don't like to stay in one place then I wouldn't be buying right now. They don't seem to have any will to change stamp duty into something remotely sensible so moving house in a market that is flat is so expensive unless you are talking houses in the low hundreds.