Energy Prices (Strictly NO referrals!)

Fubsy said:
It's the upfront cost of the early repayment charges.
We did it in December with a year left on the fix as we were able to fix down to 1.75 from 3.45* as we worked out if interest rates were to go up we'd either at least break even or be better off, with the bonus of no surprises on the mortgage for the next 5 years.

*(higher LTV gives worse rates, there's that lovely catch to deal with as well if you don't have a massive deposit, so 80-95% mortgages could be even more unaffordable for FTBs trying to save and buy :( )
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This is another thing. The new rate would be higher than current rate (but negligible)
Ltv is good now. If prices on paper start dropping. I'd also drop a band. Making it even worse. Yeah. Maybe I'll I'll get this sorted. More I run it through in my head more I see risk in waiting.
I calced it out.
0.5 percent is the spot.

If rates go up 0.5 its evens on pay now or later.
Any more and it's definitely switch now.

And from what I'm reading 0.5 before September is the absolute minimum prediction.
 
clv101 said:
There is no general rule of increasing standards of living! The last couple decades have been the exception not the rule. Looking further back the last 200 years have been an incredible *exception* not the rule. Over the last 10,000 years the general standard of living has been up and down dramatically, civilisations rising and falling. The last two hundred years of the 'carbon pluse' has been truelly exception and only a fool would consider this trajectory a sustainable general rule.
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On a small scale yes. On a long term scale then the general trend is up, as otherwise, like I said, we'd all be still living in caves dressed in rags (although if Putin has his way that may still coming in the near future :p)
 
413x said:
But inflation only really benefits if it affects your wages ?
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Yes it does, but realistically there are very few people who do not get inflationary rises over a period of time.

I mean one of the big puzzles was why wages were going up so quickly and yet productivity wasn't. How were these wages being funded.

But yes 100% inflation (or deflating your debts) is only a good thing if you actually secure wages rises that roughly match it.
 
Haggisman said:
That's quite an assumption to make though, particularly in the last couple of years, plenty of companies seem to have used covid as an excuse not to give any payrise with the excuse of "you're lucky to have a job at all". While I'm sure this is justified in some cases, others will just be jumping on the bandwagon to save themselves a few ££
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Its not an assumption at all, its well recognised that inflation causes deflation in debt over time. The exact impact is of course individual.

A mortgage is not for a couple of years though, its for many people for 25-35 years. No one in their right mind would suggest that over that time period most people will not see roughly inflationary rises, its simple impossible.
 
413x said:
Most have told me not to. But I'm talking myself into exactly what you say. More I think about it. More it seems sensible. Even if rates do drop. Its going to be max 100 ppm
On upside.. Well. Who knows.

Only reason not to is to wait until September. When I can lock in without that 2k fee. That's the decision.
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Well. I like as much certaintly as possible bill wise, so also did the 3 year energy fix last year (and also had people telling me not to) but obviously only you can decide what is your best course of action.
I know what I would be doing in your position.
 
413x said:
Most have told me not to. But I'm talking myself into exactly what you say. More I think about it. More it seems sensible. Even if rates do drop. Its going to be max 100 ppm
On upside.. Well. Who knows.

Only reason not to is to wait until September. When I can lock in without that 2k fee. That's the decision.
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£2k is nothing really if it gives you peace of mind.

You'll make it back in a month anyway.

413x said:
I went down to 2k savings (across crypto, s&s and cash) in 2020 after house buy.
Now up to 25k which is definitely more than putting every last penny into the mortgage for 2 years.
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clv101 said:
There is no general rule of increasing standards of living! The last couple decades have been the exception not the rule. Looking further back the last 200 years have been an incredible *exception* not the rule. Over the last 10,000 years the general standard of living has been up and down dramatically, civilisations rising and falling. The last two hundred years of the 'carbon pluse' has been truelly exception and only a fool would consider this trajectory a sustainable general rule.
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I agree, in fact I think the assumption it will always get better is a recent one.
Why should they always get better.

Its a ****** thing for most, I dont expect to have it as good as my parents and I think the generation behind me will probably not do as well as I have.
IMO post war the rebuilding, the expansion, the coming from pretty much nothing at the end of the war created this ever better thought. And for some for some time it seemed to be happening.
IMO the boomers were at the peak and will be the ones who (On average) had the best reward for the lowest work.

Since then energy has soared, even ignoring the recent rises, look back to bar the previous oil crisis how cheap energy was. Land was still fairly plentiful and lots of housing was flattened so much newer stuff was being built which tended to have more land around it.
Population density was low etc. Pensions were great since many people didnt live as long, so funding a high pension for a short retirement was easy. The age expectancy has leapt for the Boomer generation who frankly didn't pay enough to support that, that was their luck.
 
Surveyor said:
£2k is nothing really if it gives you peace of mind.

You'll make it back in a month anyway.
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This was my thinking a few weeks ago (rates available were 1.79) I allowed myself to get swayed. Now 1.93.
Thata nothing, but it shows how market can move so quickly.

Useful quote there. I may go for this fix available (5yr, 1.93, tomorrow)

Fixed energy for 3 yrs
Fixed mortgage for 5.
Not a bad thing with world in turmoil
 
413x said:
This was my thinking a few weeks ago (rates available were 1.79) I allowed myself to get swayed. Now 1.93.
Thata nothing, but it shows how market can move so quickly.

Useful quote there. I may go for this fix available (5yr, 1.93, tomorrow)

Fixed energy for 3 yrs
Fixed mortgage for 5.
Not a bad thing with world in turmoil
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Control the things you can control is not a bad way to look at things really.
 
413x said:
This was my thinking a few weeks ago (rates available were 1.79) I allowed myself to get swayed. Now 1.93.
Thata nothing, but it shows how market can move so quickly.

Useful quote there. I may go for this fix available (5yr, 1.93, tomorrow)

Fixed energy for 3 yrs
Fixed mortgage for 5.
Not a bad thing with world in turmoil
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Thats by historic rates still an amazing deal. I haven't got my sheet to hand but I did have a chart of years to % repayment in regards to what % of a mortgage would be left after x period. As you say it ca affect the banding etc.
I would expect 5 years on a 25 year to be roughly 10% capital repayment on a 25 year assuming your towards the start of the process.

I would expect the better rates to start disappearing very quickly, I expect a lot of lenders are getting nervous and if they see lots of people flood in they will pull deals.
Typically they only have so much capital allowed to be lent on any deal before its reviewed and reassessed.
Many people are still probably on the "free" money that the government injected to get lending working again back in 2008.
If rates start to rise the institutions will likely see a scramble for better paying savings, and as such they will need to be careful on liquidity or their ability to lend may be hampered by capital outflows. Its less marked than it once was but its still particularly relevant to Building societies.
 
Uther said:
Control the things you can control is not a bad way to look at things really.
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This, and depending on personal circumstances
And a "kind of" (I use this term to avoid triggering Dowie) a Minmax maxmin situation
Do you prefer to minimise the maximum interest you could pay = fix for as long as possible at the best rate you can
Or do you aim to maximise your chance to pay the minimum interest but happy to accept the risk of paying a lot more = only ever take the lowest rate decision which is normally short fixes, may involve cancelling and paying redemption fees etc if that makes sense

The higher your mortgage outgoings as a percentage of your income the more its likely you should look to minimise your maximum interest payable (control the worst case). But this does come with a risk you will pay more, your offsetting that security against the risk of paying extra compared to what you would have by taking the maximum chance to pay minimum interest.
 
Mercenary Keyboard Warrior said:
Thats by historic rates still an amazing deal. I haven't got my sheet to hand but I did have a chart of years to % repayment in regards to what % of a mortgage would be left after x period. As you say it ca affect the banding etc.
I would expect 5 years on a 25 year to be roughly 10% capital repayment on a 25 year assuming your towards the start of the process.

I would expect the better rates to start disappearing very quickly, I expect a lot of lenders are getting nervous and if they see lots of people flood in they will pull deals.
Typically they only have so much capital allowed to be lent on any deal before its reviewed and reassessed.
Many people are still probably on the "free" money that the government injected to get lending working again back in 2008.
If rates start to rise the institutions will likely see a scramble for better paying savings, and as such they will need to be careful on liquidity or their ability to lend may be hampered by capital outflows. Its less marked than it once was but its still particularly relevant to Building societies.
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One of the options for me is to over pay yearly too. So far I haven't as yeilds on stocks have kind of been much better. But that could easily change. If for example. In 5 years (if I fixed) rates are looking like 5 percent I'd obviously dump a significant portion of other savings into that mortgage.

Your assessment is right. I'm at start of my mortgage journey (FTB in Feb 2020) and thus those percent points are significant

And agree. At this point I'd rather lose be being over cautious than have a catestrophic life changing issue where rates do rocket.

Really I guess that's it isn't it.
Fix. And yes I've burnt. Maybe 3k.
Don't fix. Could be life change bad.
 
413x said:
This is why I'm thinking about locking in now.
I did the same with energy and it means I have 3 years of no worries.
I know I won't be money stressed.
It's almost worth the 2k just for that.
2k isn't even much in grand scheme.
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I missed out on locking energy prices but managed to lock my mortgage for 5 years back in October. Its helped keep my household bill under 1k even with these energy price shenanigans.
 
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