Interest rates increased

fez · 12 May 2022 at 15:42

Raymond Lin said:
Repossession -> Renting -> Move in with family -> Bankruptcy -> State accommodation -> Shelter -> Homeless -> Death

You hope to be back to ownership or reverse that order somewhere along the that line.

Its good though because then even more of the housing stock will find its way into the hands of the already wealthy and isn't that what society is all about.

People will tell those who lose their homes that "they shouldn't have bought it if they couldn't afford it" ignoring the fact that rent is far more than a mortgage.

Richie · 13 May 2022 at 07:29

So what are people's predictions for the June interest rates?

Will the BoE pause until the next one in August or raise again in June?

Will they rise even more by the end of this year?

I'm thinking they'll not raise again until August (if needed) to see what current rates do to the economy. Not that it will lower inflation until we get fuel and food prices under control

413x · 13 May 2022 at 08:22

Richie said:
So what are people's predictions for the June interest rates?

Will the BoE pause until the next one in August or raise again in June?

Will they rise even more by the end of this year?

I'm thinking they'll not raise again until August (if needed) to see what current rates do to the economy. Not that it will lower inflation until we get fuel and food prices under control

Apparently 3 of the board voted for a 0.5 increase last time

I wouldn't be surprised by 1 more 0.25 increase before August.
Will it come in June? 50/50 for me

Richie · 13 May 2022 at 08:24

Well it's June or August as they don't have one in July

martin363 · 13 May 2022 at 08:37

I think with inflation as it is, June is a certainty, I was surprised they didn't go higher last time,

IvanDobskey · 13 May 2022 at 08:42

It's only going in one direction now unfortunately. Luckily our mortgage is fixed for three more years. I've calculated it should be down to about 38k at the end of the fixed term if I keep up the 10% overpayments though. So the jump shouldn't hurt too much when it comes.

Richie · 13 May 2022 at 08:45

^^^ both posts above true but, given recession talk is looming, could there be a pause in increases until Aug ?

stoofa · 13 May 2022 at 09:25

I locked in for 5yrs a couple of years ago on quite a low rate and then once this 5yr period is up, I'd only have 2yrs left - so I'll make over-payments and attempt to get Mortgage paid during the current deal I have.
I'm now getting a "whopping" 1.25% on some old ISA I've got floating around.

413x · 13 May 2022 at 10:27

I think the bigger risk with not remortgaging now is if you're on 95 percent and bought in covid you could (probably will) be in negative equity come the time to look for a new deal.

That will be very very unpleasant.

Fixes will be a lot more. But if you can't fix you'll be on 5 percent rate on SVR

My house has been down valued significantly already when I renewed. Much less than all the estimates.

If I'd have bought at estimate value, and banks valuation was correct and I bought at LTV 92pc I'd be in negative now.

fez · 13 May 2022 at 10:30

stoofa said:
I locked in for 5yrs a couple of years ago on quite a low rate and then once this 5yr period is up, I'd only have 2yrs left - so I'll make over-payments and attempt to get Mortgage paid during the current deal I have.
I'm now getting a "whopping" 1.25% on some old ISA I've got floating around.

Most mortgages have a max overpayment/year which is 10% of the remaining balance so you will never be able to clear it without a fee before the end of the mortgage. That being said, if you are able to do that via overpayments you can just wait until the end of the mortgage and pay it off then.

Mercenary Keyboard Warrior · 13 May 2022 at 10:52

fez said:
Most mortgages have a max overpayment/year which is 10% of the remaining balance so you will never be able to clear it without a fee before the end of the mortgage. That being said, if you are able to do that via overpayments you can just wait until the end of the mortgage and pay it off then.

Many are now 10% of original amount now. It seems most lenders switched 5 years or so ago to the 10% of original rather than the 10% of balance.
But yeah if your on a deal your almost certainly capped somewhere

Mine is 10% of original, in theory at the annniversay date of Oct last year I could repay about 35% of my outstanding with no impact. So far I have paid off about 26.5%

Zenith · 13 May 2022 at 11:07

martin363 said:
I think with inflation as it is, June is a certainty, I was surprised they didn't go higher last time,

I agree June is a nailed on increase.

The thing with fixed mortgages is they are priced on the current projection of base rate so an increase in June which is already priced in probably won’t change the dial much.

Currently Base rate is projected to be 2% at the end of the year with a peak of 2.25-2.5% next year. Unless you think rates will go higher than that there’s probably not a huge benefit on paying an ERC and refixing now, that ship has sailed.

MikeTheNative · 13 May 2022 at 11:16

Can't see them whacking it a whole percent in a go, I'm going to guess it will a 0.5 rise.

IvanDobskey · 13 May 2022 at 11:20

Agreed, probably go up 0.5%

purplesky · 13 May 2022 at 11:39

US Fed did 0.5% last meeting. BOE have no choice now, unless we want to see the pound crash and inflation of food and utilities go up even more.

413x · 13 May 2022 at 11:57

I don't think it'll be 0.5.
They should have been starting this earlier.

Surely it would be 0.25 now and in August?

UK rate is 1pc
Usa is 0.75

I can't see uk being 1.5 in June?

jonneymendoza · 15 May 2022 at 09:07

Richie said:
So what are people's predictions for the June interest rates?

Will the BoE pause until the next one in August or raise again in June?

Will they rise even more by the end of this year?

I'm thinking they'll not raise again until August (if needed) to see what current rates do to the economy. Not that it will lower inflation until we get fuel and food prices under control

I've just got a mortgage in principle locked in for around 3 percent interest rate. It runs out in August.

TNA · 15 May 2022 at 14:49

jonneymendoza said:
I've just got a mortgage in principle locked in for around 3 percent interest rate. It runs out in August.

Nice. Hope there is no chain or at least a small one. A mate has one in a huge chain and he got a good percentage a few months ago, but I fear the deal offered which was for 6 months will expire before everything goes through and then he will end up on a much worse deal at a higher interest rate.

Make sure you chase the conveyancer, otherwise it may take a lot longer than it should. I had to chase ours and even picked up things that she missed.

kona786 · 15 May 2022 at 15:33

TNA said:
Nice. Hope there is no chain or at least a small one. A mate has one in a huge chain and he got a good percentage a few months ago, but I fear the deal offered which was for 6 months will expire before everything goes through and then he will end up on a much worse deal at a higher interest rate.

Make sure you chase the conveyancer, otherwise it may take a lot longer than it should. I had to chase ours and even picked up things that she missed.

Also if you can keep in contact with the seller directly. I found if both buyer and seller are on the same page and keep on top of their respective solicitors, it saves significant time

TNA · 15 May 2022 at 15:45

kona786 said:
Also if you can keep in contact with the seller directly. I found if both buyer and seller are on the same page and keep on top of their respective solicitors, it saves significant time

Yeah, probably not possible with him though, I think there are at least 6 in the chain :cry: