Mortgage Rate Rises

norm said:
Aren't the banks now rubbing their hands with glee, they loaned a ridiculous amount of money on inflated mortgages because of cheap credit in the last decade, now the interest rates are rising they have everyone by the balls so to speak and can reap a load more profit.

It's almost as though this sort of thing is intentional.
Click to expand...

Minstadave said:
They have to be careful, got to have low enough interest rates to be competitive but don't want to be caught handing out a load of money too cheaply.
Click to expand...

Yea lending mortgages is barely profitable at the moment.

Hence the rates going up so much. The mortgage lender I work for has basically ****** themselves because we didn't pull our products/raise our rates fast enough on Wednesday/Thursday and we ended up with a months worth of volume in 2 days.

And we may end up loosing money on that.
 
scottomus0 said:
Am I mad about considering just staying on a tracker and dealing with the increases? Rather than commiting to that extra moneys from now? What’s the likelihood it’s gona surpass 7-8% ?
Click to expand...
Not mad - this it what we will probably do. Rates are still predicted to come down. These levels of predicted interest rates are not sustainable long term. Property in europe and the US is just as expensive as here
 
Goksly said:
No, I looked at the average rate of mortgages going back 20/30 years and made sure I was comfortable or had a plan if it hit the peak. Normal, no?
Click to expand...
Probably not normal. I haven’t personally ever considered looking back that far - it’s a different world now, with different economies and lending practices.

For so long as I’ve been in the market (7 years) and until the recent rises, going for a 2 year fix has was the tried and tested cheapest route and sensible so long as you didn’t have dependants on the horizon.

So not surprising that people have been operating on that basis.

I do not anticipate that interest rates will get higher than 6-7%, just my gut instinct, but let’s see!
 
kevman said:
Not mad - this it what we will probably do. Rates are still predicted to come down. These levels of predicted interest rates are not sustainable long term. Property in europe and the US is just as expensive as here
Click to expand...
This is going to have to be our strategy too. A fix at 7% would mean a monthly increase of £1600 for us (at the end of our current fix).
 
I can see the banks removing mortgages in the face of a housing market crash, but why not keep the lower rates for people with better LTV rates? The BoE base rate is still only 2.25 percent and yet all the banks have gone crazy and doubled their mortgage rates across the board.

For all we know, Ukraine gets nuked next week and the rates get frozen at 2.25 while we're stuck in WW3! Nothing has changed... YET but the banks have gone nuts!
 
Nemiyen said:
I can see the banks removing mortgages in the face of a housing market crash, but why not keep the lower rates for people with better LTV rates? The BoE base rate is still only 2.25 percent and yet all the banks have gone crazy and doubled their mortgage rates across the board.

For all we know, Ukraine gets nuked next week and the rates get frozen at 2.25 while we're stuck in WW3! Nothing has changed... YET but the banks have gone nuts!
Click to expand...

They are reacting to the mini budget last week. Inflation is going up, and to get it down BoE will need to up interest rates, which they have done. But the governments decide to borrow a ton of money to “kick start” the economy and want to economy to spend more money. Spending money causes inflation, supply doesn’t fill the demand, so the banks are expecting inflation to stay high after the latest budget meaning rather than looking at today’s BoE interest rates, they are protecting themselves 6 months to 12 months down the line by putting it up now.

That’s my understanding of it.
 
What's the plan with open mortgage offers and waiting in a chain? Any chance of these offers being pulled?

Have a few friends in chains currently who are getting very nervy.
 
AiiR said:
What's the plan with open mortgage offers and waiting in a chain? Any chance of these offers being pulled?

Have a few friends in chains currently who are getting very nervy.
Click to expand...

As I understand it, if you've applied and been accepted/offered you're fine.

Decision in principle is literally worthless though.
 
ChrisD. said:
I might look at them in 2026, it seems odd to me that usually when you renew you get one of the worst rate offers on the market.
Click to expand...

Sometimes they were a little higher (maybe a tenth of a percent at most) but our mortgage is less than 500 a month. Even as low as 440 a couple of years back so paying the fee to swap was pointless. Better just to overpay with the fee instead.

Obviously with a larger mortgage the fee becomes less of an issue. Even still I am on 1.75% at the moment which was a good rate two years ago.
 
Last edited:
scottomus0 said:
Am I mad about considering just staying on a tracker and dealing with the increases? Rather than commiting to that extra moneys from now? What’s the likelihood it’s gona surpass 7-8% ?
Click to expand...


Our fixed deal ends in July next year and we are around 60% Ltv

Inflation is going to dump very quickly imo when it does eventually hit people and spending stops . I do think they will have to lower interest rates again . This reaction is insaine it’s happening very fast and you need to leave time to allow things to settle. We wanted to move and have been waiting for our fix to end for this. World wide economy is going to stop us from doing this I assume for a few years but fixing for another 5-10 years locks us in to far .

When you hear the news of 8% plus I genuinely think we will be absolutely doomed by this point as nobody will be able to buy or afford there mortgages let alone anything at all ( rent etc) I just can’t see that being a BOE policy for any significant length of time. We know rates have been high before but as posted before here 15% back then was 3-4% Today etc
 
omnomnom said:
lmao of course you did. Absolute nonsense. Its a whole different world now.
Click to expand...
If your parents lost a house in the early '90s, or took a beating in the GFC, or if you had a hard time of it in the GFC, then of course you're going to look back and say "can I pay this if interest rates go up from historic lows?"

Caution comes from having been burned in the past.
 
Regy53 said:
When you hear the news of 8% plus I genuinely think we will be absolutely doomed by this point as nobody will be able to buy or afford there mortgages let alone anything at all ( rent etc) I just can’t see that being a BOE policy for any significant length of time. We know rates have been high before but as posted before here 15% back then was 3-4% Today etc
Click to expand...
Agreed. Once we enter recession the policy will be to reduce interest rates in order to stimulate.

At 8% we grind to a halt as it’ll be mass repossessions (inc BTL’s) which will mean banks start failing again, people stop spending and the only businesses that are able to remain open open are supermarkets/essential businesses.

Entire sectors will collapse - the BoE know this hence there’s no emergency increase and they’ve been cautious in terms of the amount they’ve raised the base rate thus far.
 
Harnser said:
If your parents lost a house in the early '90s, or took a beating in the GFC, or if you had a hard time of it in the GFC, then of course you're going to look back and say "can I pay this if interest rates go up from historic lows?"

Caution comes from having been burned in the past.
Click to expand...

Exactly you do not even have to go back that far in 2010 we were paying over 3% and where a lot would have still been on 6% fixed from previous years.
 
You must log in or register to reply here.
Back
Top Bottom