Mortgage Rate Rises
- Thread starter glenimp617
- Start date
Soldato
Tbf I got a 1.69% 7yr fix with no fees when I remortgaged with Barclays and the new Rate started in June as you could sort it 3 months ahead so was just in time to get a decent rate.
Caporegime
I have been with Barclays for the past 12 years. People always say you should chop and change but they always gave me the cheapest or worked out cheapest when you took into account fees. Although we have only been fixing for 2 years a pop. 2 years ago we got 1.75 which was a good rate at the time. Although we run out in Jan so expect an increase. Only pay 450ish a month so might even double it. Could be Mortgage free by my 40th
.I thought I had a 2 year fix on a property I let out (yup, evil landlord here!) but it turns out it’s a 5 year fix. Good news all round as if it did go up I would have to think passing some cost to the tenant but as it stands I won’t be amending the rent at all. And I haven’t changed it in the 2 years they’ve been there.
Things are hard and I think landlords should morally do what they can to keep rents reasonable. However, if costs increase then there is only so much they can do.
My own house’s fix is up in April and September next year so that’ll be a sore one.
Things are hard and I think landlords should morally do what they can to keep rents reasonable. However, if costs increase then there is only so much they can do.
My own house’s fix is up in April and September next year so that’ll be a sore one.
That's a bit different though and you got quite a nice deal there, I was talking about 2 or 3 year fixes.
Soldato
I also fixed my energy in October, but then my supplier went bust. Lots of people making good decisions are still getting screwed.
I made sure it was with a big one. With all the suppliers going bust I didn't want to risk it.
I didn't even consider octopus. Just in case.
But yeah. It was brutal. Who knew it would get this bad. :/
Soldato
You can always lean on your renter to help you out with your main home cost increase....
/s
Soldato
Where does your broker see BOE rates this time next year (best guess I know he’s nor mystic Meg)? I thought all mortgage were stress tested , wasn’t it 3% above BOE at the time of taking it out ? Sorry my residential mortgage is tiny so Ive not bothered remortgaging in years and I’ve only kept it in case I need cash on the quick .
My immediate concern is my 2 x ~BTL mortgages that come fix end in Jan ( yes 4 times evil landlord here ) I just don’t think it’s fair I pass my mortgage cost onto a tennant so might be easier to sell one and clear both mortgages.
Soldato
Stress test is 3% increase, to the banks base mortgage rate, (Sorry I edited this, often called SVR)
Problem with the stress test is that its not assuming massive inflation elsewhere, its assuming a 3% hike in your mortgage.
Whilst a little painful I can't imagine anyone couldn't have coped (thats the point in the stress test) had there not been massive cost of living impacts in food, fuel etc
Soldato
Never thought of that , good point.
I just can’t see how inflation can be brought down without BOE rates not increasing over the next year, a few brokers I’ve spoken to are expecting rates of north of 3% in a years time .
Agreed.
3 percent on a mortgage.. Fine.
But when isn't a 3 percent increase going to coincide with "bad times" elsewhere?
Can't believe tests are being loosened too. I forget the way they are loosening them
Soldato
???
it's cost-push inflation, the solution is to reduce costs (oil+gas prices).
increasing rates will do practically nothing to help inflation but will cause massive damage.
Soldato
Its a tricky one.
I still remember much higher rates, in my mind rates were artificially low and would return to a more balanced point anyway. As such I didn't consider an external significant shock would be behind it, but a rebalancing to a fair risk reward between savers and borrowers.
For sure however there is always the risk that rates moving significantly are tied to another external event that is also working against you.
Problem is enough people criticised the stress test as it is, if they added a 20% cost of living increase (say) as well, that would just make affordability even worse for everyone.
There is and has to be some element of risk left in borrowing, or basically you would only lend to people who didn't need it.
Soldato
Increasing rates will help to preserve our currency value, which will keep imported costs lower than if we didn't increase rates. Therefore at least helping to suppress inflation
Increasing rates will draw some discretional spending out of the economy as people decide to save some in case things get worse.
Increasing rates also makes saving more attractive even if its still losing value compared to inflation.
Rates are a blunt mechanism but they do cause a deflationary impact.
Soldato
Which everyone knows, everyone can see - so why are the BOE/FED doing it? Seriously, any of us here could do a better job than these overpaid idiots.
Soldato
1. they're under pressure to do something, and only have a hammer
2. some degree of the stuff Mercenary Keyboard Warrior said
3. a desire to get rates back to the historical norm so there's room to reduce them should the need arise
4. not caring enough about the consequences to normal people
Interest rates were 7.25% when I bought my first house back in 1998. Just looked through historical rates and can see anyone with a mortgage since 2009 has enjoyed 13 years of crazy low rates. That's half a mortgage term for a standard 25 year deal. I'm a bit glad I fixed at 1.64% for 5 years at the start of the year and only have 5 and a half years to go until it's paid off. Easy to see though why people are unprepared for higher rates.
Soldato
But people haven't 'enjoyed' low rates as you put it, because house prices have risen to absorb that benefit. Either a person buys a house for £100k at 7% or for £200k at 3% (indicative figures), it still costs the same per month, that person sees no benefit from that.
Just to add, houses are less affordable based on salary multipliers now than in the past despite higher rates in the past, so low rates for a while have not helped new buyers at all.
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