Mortgage Rate Rises

GuruJockStrap said:
Incredible how quickly this is moving.

We moved house during Covid in April 2021 and I fixed for 5 years at 1.39%. Our LTV today is around 45% and thankfully our mortgage is the only debt we have.

Lord knows what the situation will be in 5 years time but this is going to prompt me to start making overpayments so that in 5 years time, we're in the best possible shape to deal with whatever the rate will be when it comes to re-mortgaging. Unfortunately, that's money that won't now be going into the general economy but I'll be mortgage free hopefully a lot sooner than planned.

What's the general view on making overpayments? Overpay whatever you can now on a monthly basis or squirrel the money away into a savings account (hopefully better interest than around 4%) and then put that down as a deposit when re-mortgaging?
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When will we see our interest rates on our saving account reflect todays interest rates?
 
GuruJockStrap said:
Incredible how quickly this is moving.

We moved house during Covid in April 2021 and I fixed for 5 years at 1.39%. Our LTV today is around 45% and thankfully our mortgage is the only debt we have.

Lord knows what the situation will be in 5 years time but this is going to prompt me to start making overpayments so that in 5 years time, we're in the best possible shape to deal with whatever the rate will be when it comes to re-mortgaging. Unfortunately, that's money that won't now be going into the general economy but I'll be mortgage free hopefully a lot sooner than planned.

What's the general view on making overpayments? Overpay whatever you can now on a monthly basis or squirrel the money away into a savings account (hopefully better interest than around 4%) and then put that down as a deposit when re-mortgaging?
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Similar position albeit with a much higher LTV.

Normally the best bet would be monthly over payments as that immediately reduces the interest accumulating on your mortgage but we now life in strange times where it is possible to get an easy access savings account with a higher interest rate than I pay on my mortgage so you are probably better off putting it in a savings account provided you can resist the temptation to spend.
 
Azza said:
41% of mortgage products have been removed since the 'mini-budget'.
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One thing for certain is right now probably isn't the best time to start a mortgage application the market is too scared to offer decent rates which will hopefully calm as the fall out from this settles and we see what the BofE do next with rates.
 
a1ex2001 said:
Similar position albeit with a much higher LTV.

Normally the best bet would be monthly over payments as that immediately reduces the interest accumulating on your mortgage but we now life in strange times where it is possible to get an easy access savings account with a higher interest rate than I pay on my mortgage so you are probably better off putting it in a savings account provided you can resist the temptation to spend.
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we did think about that too with my other half.. I currently put in a good chunk in savings for either overpaying once a year or else.. Our current deal is 1.99% for the next 3 years so we've got a bit of time, annyoing that savings account take a long time to match interest rates elseware.
 
jonneymendoza said:
When will we see our interest rates on our saving account reflect todays interest rates?
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They already are if you look around, ATOM instant access is at 1.9% so just below BofE which is where instand access stuff normally sits and you can get lock in account at 4% so significantly above BofE rates you just need to move your savings around which people will need to get back into the habit of as it has hardly been worth it for the last decade with rates of 0.25%
 
Haggisman said:
So you're in the exact same position as me and my family then ;)



If you can afford it then that's great - you're lucky enough to get the best of both worlds. Unfortunately there are people who can't afford it, but are unwilling to even entertain the prospect of having to move a couple of hours away from their family in order to be able to buy the house they believe they deserve.
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that's my point, if you're lucky enough to have built your life in one of those cheaper areas then great but very few people will commit to leaving their home town really.

I have seen people like that and I know a couple and I agree with you there but those people will continue renting as they are now and continue complaining. My main annoyance with a few posters here is the idea that those who have recently bought should've known "better" and prepared for this insanity that we're currently experiancing.
 
My Chase Savings is getting me 10x 20x ?? the rates vs my Barclays Cash ISA...which is useless, so bad I think i will take it out and move it unless it changes soon.
 
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We are semi-retired in our mid-early 50s. Got a 33% LTV interest only tracker (0.5% above base) mortgage that is due to finish in 3 years.

We've been saving away over the last 20 years so that we have the funds to pay it off.

Over the last 10 years we've been benefitting massively from the low interest rates paying <1% for some of it. Problem is that if rates rise to 5/6% we end up with a monthly repayment that will cause us to really struggle.

So we are having to cash in most of our mortgage savings at a price about 10% lower than they were only a year ago in order to pay off the mortgage early. The risk of them sliding further leaving us without the means to pay of the mortgage in 3 years is just not worth it.

Whilst on one hand that's £20k we have lost, on the other we will be mortgage free which will help massively with cost of living.

I don't see things getting better for a fair few years yet. But I will NEVER forgive this tory government for what they have done to the country. Brexit, mis-management and blatant corruption.
 
grudas said:
that's my point, if you're lucky enough to have built your life in one of those cheaper areas then great but very few people will commit to leaving their home town really.
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It was a conscious choice to make that sacrifice. We could have chosen to continue living near family in Bath, and scraped by - just about able to afford a 1 bedroom flat, with no prospect of being able to afford starting a family of our own - but we chose instead to move up here where we could get a 3 bed house with a nice garden in a half decent area, along with more (and better paid) jobs. Of course we'd rather be in Bath than Birmingham. Of course we'd rather be closer to family, but like I said, life isn't fair.

It was nothing to do with luck, purely a willingness to actually do something about the situation instead of just complain.

grudas said:
My main annoyance with a few posters here is the idea that those who have recently bought should've known "better" and prepared for this insanity that we're currently experiancing.
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Yeah completely understandable, and I do have sympathy for those people. Getting on the ladder at any time is a bit of a gamble, and like you say, nobody could have predicted Covid followed by Ukraine a couple of years ago :(
 
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With savings accounts, I've never been in a position to care about interest rates since they have been so low that it has never affected any balances I had. Now I'm starting to care obviously with the whole pay off your motrgage vs put it in savings. I know with Mortgages the interest is calculated daily, so the sooner you make overpayments the better, hence I do monthly overpayments rather than annual. How does it work with Savings account interest accumulation? I know this sounds really basic but I'm not afraid to say I don't understand it but want to. I'm going to assume if you put £100 into a savings account advertised as 4% it's not as simple as you get £4 back after a year?
 
a1ex2001 said:
One thing for certain is right now probably isn't the best time to start a mortgage application the market is too scared to offer decent rates which will hopefully calm as the fall out from this settles and we see what the BofE do next with rates.
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You think that's realistically going to happen? The amount of extra payments (including erc) that some people are seemingly locking in to right now indicates that they are as close to certain as possible that it won't.
 
Kill_Phil said:
Who was the chap who got banned not too far back who used to tell people who struggled with cost of housing to just live out of a van ha
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If I didn't have a gf, 2 cats and a dog I genuinely would have sold up a few months ago and bought a big van, caravan or boat to live in.

House on the street behind me went up for sale a few months ago for over 50% what I paid 5 years ago and over 25% what mine was valued at in Jan this year for a remo. Same size house but less desirable (no garage, smaller gardens, mid instead of end terrace). It sold in days. Dont know what it went for but presumably close to asking at least.

It seemed inevitable recently that this rise was unsustainable and I was prepared to take the gamble on sitting pretty with a chunk of cash if it went pear shaped
 
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