Mortgage Rate Rises

[413x]

Pretty much it yeah, the alternative of private rental is far far worse, even interest only mortgage is a better option than renting.

Our rent was 550 a month. For the grottiest of 1 bed flats.
Before covid peaked this more.

II dread to think what it would be now. I bet many on forum would turn thier nose up at it. It was the nastiest place I've lived.

 

[I_M_Weasel]

Ours is fixed until 2027. But like you looking now it would be 500ppm more!

With all the other costs be looking at a cost of living increase of 700-800ppm! That's a huge amount of money.

This is "only" a 200k mortgage. Bank would have lent 300k! Which I even said to the advisor was crazy irresponsible!


We have a low cost of living base line. Horrible to think of what others are going through!

My fix runs out in 12 months - seems like this might be when rates are at their worst; don't know whether I'll be better off suffering the standard vaiable for a while of fixing on something not very good for two years. Bad timming.

 

[neocon]

I kinda see it both ways.

Yes - people shouldn't be overstretching, but the reality is - house prices have gotten so damn expensive, unless you earn a ton of money - pretty much everyone is going to be overstretching themselves to buy a house in the last couple of years (before this charade)

People just want decent places to live, if you have a family and you need 3-4 bedrooms, a garden and garage - unless you're right up north or in a real crap area, you're going to need in the region of £340k to get anything relatively standard. If you're in the south - basically forget it now.

Oh I missed off the fact he was in his 60's. Somehow I think they already have equity, do the house could have been double 340k.

 

[delta0]

My fix runs out in 12 months - seems like this might be when rates are at their worst; don't know whether I'll be better off suffering the standard vaiable for a while of fixing on something not very good for two years. Bad timming.

The peak is expected around the middle of next year so prices should be coming down after that.

 

[neocon]

That doesn’t seem right for both numbers.

Maybe interest only?

 

[delta0]

Maybe interest only?

Good point. 0.75% to 4.25% matches with those numbers.

 

[I_M_Weasel]

The peak is expected around the middle of next year so prices should be coming down after that.

Hope so!

 

[413x]

My fix runs out in 12 months - seems like this might be when rates are at their worst; don't know whether I'll be better off suffering the standard vaiable for a while of fixing on something not very good for two years. Bad timming.

One source of light here, there should be some clarity by then.

Rates may come down by then. Trackers might even be a good option.

Worst time to probably exit (if I was guessing) is now until end of q1 2023. Ours would have ended February 2023!

 

[Chuk_Chuk]

Sure?

I've just taken out a 0% balance transfer card, which also had a 0% transfer fee and it's got 22 months on it. I've not seen any disappear yet.

This is my one benefit at the moment, ramping spend onto these cards and using the money i would otherwise be paying into a 5% savings account. No risk of not having the money, should i be unable to switch i'll have more than enough in those savings accounts.

What CC is this?

 

[Dem2k]

For me its ideal if the housing market does crash or reduce in price, I hope prices at least fall by 20% or more, not so good for people who just recently got onto the housing market though, I do feel sorry for those who will be shafted through no fault of their own, just incompetence of government, and Putin frankly wanting to revive the СССР.

 

[neocon]

For me its ideal if the housing market does crash or reduce in price, I hope prices at least fall by 20% or more, not so good for people who just recently got onto the housing market though, I do feel sorry for those who will be shafted through no fault of their own, just incompetence of government, and Putin frankly wanting to revive the СССР.

House prices don't fall in isolation though. In the scenario where they have fallen, interest rates have gone up, inflation is up, cost of borrowing is higher, unemployment has increased, etc. So unless you're a rich cash buyer, where is the gain?

 

[Martynt74]

What CC is this?

Sainsburys was the one i got.

Balance transfer credit cards

If you're paying interest, see if you can transfer your debt to a 0% deal. See Martin Lewis' top pick balance transfer credit cards.

www.moneysavingexpert.com

There's a Santander one too though

 

[Hagar]

Well I have been outside the privately owned market for the best part of ten years. We had just finished with a mortgage and tried renting until we found the right house.
So I am re-entering at a high, but without a mortgage and being seventy am not too bothered by negative equity. The last house was a four bed detached, ensuite etc., this one is a three bed semi with just one bathroom.

 

[Semple]

House prices don't fall in isolation though. In the scenario where they have fallen, interest rates have gone up, inflation is up, cost of borrowing is higher, unemployment has increased, etc. So unless you're a rich cash buyer, where is the gain?

This really.

Banks also tend to get nervous at times like this and make affordability criteria stricter. So a lot of FTB'ers will struggle to meet stricter criteria / bigger deposits at a time when house prices have dropped.

At a guess the market would also slow down with price drops - people wouldn't be looking to sell when the price is down unless they absolutely need to.

 

[Troop]

House prices need to come down by a third really to make them affordable. the increase in prices over the last 20 years is beyond ridicules.
December 98 property bought for 109k, sold April 2022 600k. that's nearly fivefold increase....totally bonkers.

 

[200sols]

House prices need to come down by a third really to make them affordable. the increase in prices over the last 20 years is beyond ridicules.
December 98 property bought for 109k, sold April 2022 600k. that's nearly fivefold increase....totally bonkers.

Nationwide prediction of a 30% fall in their reasonable worst case. This is higher than 2008 fall. People say prices don't fall in isolation but they can, the majority of the population can't afford these houses even with a job or in most cases even with dual salaries in the household.

 

[FBi7]

I am in the extremely fortunate position of being fixed at 1.58% til March 2026. Currently putting everything we can into a higher interest rate savings account to use as a lump sum come remortgage time.

Currently being charged ~£210/month interest on my mortgage account. Is there any sense in making overpayments to the mortgage to the same value as the interest charges, or am I better off sticking with putting everything in savings for later?

 

[Martynt74]

I am in the extremely fortunate position of being fixed at 1.58 til March 2026. Currently putting everything we can into a higher interest rate savings account to use as a lump sum come remortgage time.

Currently being charged ~£210/month interest on my mortgage account. Is there any sense in making overpayments to the mortgage to the same value as the interest charges, or am I better off sticking with putting everything in savings for later?

I'd say you're better sticking everything into savings.

Mortgage Overpayment Calculator: Pay off your debt early?...

Mortgage Overpayment Calculator shows how much you can save by paying off your mortgage early - if your mortgage allows overpayments.

www.moneysavingexpert.com

This lets you compare benefits of overpaying vs savings.

 

[FBi7]

I'd say you're better sticking everything into savings.

Mortgage Overpayment Calculator: Pay off your debt early?...

Mortgage Overpayment Calculator shows how much you can save by paying off your mortgage early - if your mortgage allows overpayments.

www.moneysavingexpert.com

This lets you compare benefits of overpaying vs savings.

Perfect, thanks. Yes, better off putting everything into savings by the looks of it.

Cheers!

 

[Screeeech]

People say prices don't fall in isolation but they can, the majority of the population can't afford these houses even with a job or in most cases even with dual salaries in the household.

I know, it's gotten silly - houses have become like graphics cards, they're just artificially expensive because people have been able to buy them. But outside of London - I doubt many people can realistically buy a first home now that isn't going to bankrupt them.

I don't understand a scenario, where the house prices stay even close to being the same - I just don't see how it can be possible, (with London being the exception, because it's just packed full of people who can drop £1M on a property in cash)