Mortgage Rate Rises

badbiddy said:
I can't fathom why anyone would fix at 6%

Safety in numbers and all that- just go with a tracker, which will see you paying around 4-4.5% right now, and probably around 6% toward the end of next year before coming back down, you've seen the lengths modern Tory party has gone to to avoid mass layoffs etc during covid (massive borrowing). To a degree this is the counter swing and I fear it can only be worse in future if they do it again to combat the current situation... They won't let rates get that high (sadly lol)
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You have two options, either interest rates will rise or inflation will persist/increase for longer.

for the sake of 1.5% you open yourself up to massive risk, while the downside of fixing is that interest rates dont go up, this means that inflation will help you, by eroding away your debt.
 
Well got an offer of a discounted standard rate mortgage today...

3 year, 6.6% standard rate (but with 3% fixed discount for the 3 years). So in theory would be 3.6% from the start of Dec. With a small building society but looks to be worth considering.

Just weighing that up against a 5.1% fixed rate with £1000 fees added on.

Certainly not sticking with Santander!

Really all depends on if the base rate is likely to go up by more than 2% over the next 3 years...
 
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mattyprice4004 said:
The market has absolutely died here - lots of houses being dropped in price or relisted.
Very lucky to be mortgage free, so we’ll be staying here for a (very) long time I think.
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Same happening on same right move searches I have had on for ages. Volume is through the floor and many reduced
 
Surveyor said:
If you fixed in 2020 for two years how does your fix end in April 2023?
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My mistake - was 2021 for 2 years. Typo.

krooton said:
Yep, some will smugly sit on the sidelines commenting that people shouldn't have maxxed out on their borrowed amount, but the reality is many people have, so the increases still hit people relatively the same regardless of mortgage size.
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Based on our income and our outgoings I wouldn’t even say we stretched ourselves. We have a good household income and no children, but it’s just not going to be feasible paying that much more.
EvilRob said:
Surely it won't be as bad as that.

How much did you borrow? You could probably lock in an offer for a 5 year fix at 5.3% or so right now for April.
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It really is. We got “lucky” and secured a 95% LTV before the pandemic, borrowing 380k. The area we purchased is one of the only places we could afford and have commutes of less than a hour.

We’ve paid off enough to be around the 80% LTV which would’ve given us a much better rate before all of this. Gutted. We saved so hard for years whilst also renting in London and it’s gutting to think we could end up back at square one again.
 
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Meatball said:
My mistake - was 2021 for 2 years. Typo.



Based on our income and our outgoings I wouldn’t even say we stretched ourselves. We have a good household income and no children, but it’s just not going to be feasible paying that much more.


It really is. We got “lucky” and secured a 95% LTV before the pandemic, borrowing 380k. The area we purchased is one of the only places we could afford and have commutes of less than a hour.

We’ve paid off enough to be around the 80% LTV which would’ve given us a much better rate before all of this. Gutted. We saved so hard for years whilst also renting in London and it’s gutting to think we could end up back at square one again.
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That's rough. I sympathise. Try and hold on if you can...
Would still recommend getting an offer at the best rate you can now. You can always ditch it when it's time to remortgage if there's something better. Who knows what'll happen between now and then.
 
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Meatball said:
My mistake - was 2021 for 2 years. Typo.



Based on our income and our outgoings I wouldn’t even say we stretched ourselves. We have a good household income and no children, but it’s just not going to be feasible paying that much more.


It really is. We got “lucky” and secured a 95% LTV before the pandemic, borrowing 380k. The area we purchased is one of the only places we could afford and have commutes of less than a hour.

We’ve paid off enough to be around the 80% LTV which would’ve given us a much better rate before all of this. Gutted. We saved so hard for years whilst also renting in London and it’s gutting to think we could end up back at square one again.
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Sucks for sure but this was always a possibility when buying an asset using borrowed money at that kind of LTV. Sadly most people had no other choice, as this is the sad state of affairs in the country.

If you hold on for the long term things will work out. But yeah, you won't see the good old days of buying at low prices (at high interest rates), then see interest rates go down for 15 years so your mortgage payment continue to go down as your income goes up. Those were the luckiest buyers, our generation are not going to see those days.
 
Meatball said:
My mistake - was 2021 for 2 years. Typo.



Based on our income and our outgoings I wouldn’t even say we stretched ourselves. We have a good household income and no children, but it’s just not going to be feasible paying that much more.


It really is. We got “lucky” and secured a 95% LTV before the pandemic, borrowing 380k. The area we purchased is one of the only places we could afford and have commutes of less than a hour.

We’ve paid off enough to be around the 80% LTV which would’ve given us a much better rate before all of this. Gutted. We saved so hard for years whilst also renting in London and it’s gutting to think we could end up back at square one again.
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Did you see my post about extending the term?

Mortgage Rate Rises

Think we are near/at the peak. I think for the medium term either interest rates continue to rise or the entire financial system will fail. Although it failing is not necessarily a bad thing as the current FIAT currency system is extremely unjust, counterproductive and basically parasitic on...
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I would certainly speak to a broker before you totally throw in the towel. Renting is going to cost a bunch still and set you back long term.
 
What would you do in this situation?
Mortgage due for renewal Sept next year. Currently on 2.1%. I could pay £800 to get out early and remortgage at 4.79% for 5 years. Costing me an extra £200 a month. I have about 13 years left on my total term. The £200 a month will very nearly break me (But not quite - But will make things very very hard) ontop of all the other increases going on.
I could hold off till next Sept to see what the rates are and bite the bullet then. As my last resort I have the option to extend my total term for up to 6 years, but that really is my last resort.

I phoned my lender who said that the banks are likely to raise the rate at the start of Dec, but I dont know if that was just them trying to force my hand. I have no trust in any of the professionals and I know there are very few people who know what will happen, but the more information I have to work with the better decision I can make.
 
Inflation isn't going down so it is very likely that BoE will up the interest rate further. Then no doubt will drive your mortgage rates up again.

The current interest rates ... IMO will stay around for about a year so next Sept would be at best where we are today...at a guess.
 
Absolutely no way of knowing exactly what is going to happen. When I spoke to my advisor 6 months ago he said the same to me but certainly wasn’t advising me remortgage now rather than later. He just said depends whether you was security or not.
 
Raymond Lin said:
Inflation isn't going down so it is very likely that BoE will up the interest rate further. Then no doubt will drive your mortgage rates up again.

The current interest rates ... IMO will stay around for about a year so next Sept would be at best where we are today...at a guess.
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Thats what I'm hoping for. If that happens and I leave it till then I'll save over £2000 by burying my head in the sand for 9 months. Even if the rates are at 6% next year I can use my wild card; extend the term, That will be on lesser mortgage amount and net me an extra year I can extend by. But if the rates go up to something like 11% then only divine intervention will pull me through... and that isnt happening. I feel like I'm gambling my whole family livelyhood no matter what I do!
What is very worrying is that I'm not on a bad pay and have no other depts, so I cant imagine what other families are going through.
 
bushmins said:
Thats what I'm hoping for. If that happens and I leave it till then I'll save over £2000 by burying my head in the sand for 9 months. Even if the rates are at 6% next year I can use my wild card; extend the term, That will be on lesser mortgage amount and net me an extra year I can extend by. But if the rates go up to something like 11% then only divine intervention will pull me through... and that isnt happening. I feel like I'm gambling my whole family livelyhood no matter what I do!
What is very worrying is that I'm not on a bad pay and have no other depts, so I cant imagine what other families are going through.
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Rates won't go up to 11pc.
It would destroy everything.
Can't see much further increase. The effects always have a big lag.

At this point inflation is significantly delinked to rate rises. All rate rises are doing (and I'd question this at this point) is keeping up with the Fed.



As for what to do?

Its so far away it's hard to guess. I had same issue in March with a mortgage a year away. But then at least there wasn't much to miss out on apart from the erc. Fixing now at 5-6pc could be very costly. You may well pay an erc and end up with an over market mortgage for years


I think I'd be looking at getting an offer now, seeing what environment looks like 3 months from now. If its improving get another offer. If it looks like it's worsening in long term. Take that offer.
 
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413x said:
I think I'd be looking at getting an offer now, seeing what environment looks like 3 months from now. If its improving get another offer. If it looks like it's worsening in long term. Take that offer.
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Could you say a bit more on this? I had heard that I could 'hold' a new quote now. That quote would be a rate + early settlement fee and would stick for a few months but didnt look into it much. Is that a thing?
 
bushmins said:
Could you say a bit more on this? I had heard that I could 'hold' a new quote now. That quote would be a rate + early settlement fee and would stick for a few months but didnt look into it much. Is that a thing?
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Mortgage offers are usually valid for 6 months, so i think he means apply for one now, which would lock in a rate until ~April 23. If they start to drop then you can just cancel the application and start a new application at the new lower available rates. If they don't drop then at least you have the current one locked.
 
Martynt74 said:
Mortgage offers are usually valid for 6 months, so i think he means apply for one now, which would lock in a rate until ~April 23. If they start to drop then you can just cancel the application and start a new application at the new lower available rates. If they don't drop then at least you have the current one locked.
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This.

Our offer was valid for 4-5 months ish. And I waited on it. Was going to wait until right near the end. But became clear, very clear what was happening.

I only committed 3 months after it was issued.

Obviously don't take out a new car lease during the offer or something like that!
 
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