Mortgage Rate Rises

[NotAGolf]

I'm fixed at 1.49% until 2025, but are hoping to move before then. Really hope I can port it!

 

[fez]

Well house prices are still rising, a sellers market with houses flying off the shelves, rates are rising, wages aren't

Where's the money coming from

Its still far more sensible (barring a housing crash) to pay insane money for a house than pay even more each month on a rental. This is the fundamental driver of house prices continuing to rise. Yes if we built more houses then demand would reduce but that hasn't/isn't happening so everyone is looking at it in a very simple way.

Would I pay more each month renting? Yes.
Have house prices continued to rise for a long time now? Yes.

In my early 20's I thought that house prices were insane and couldn't keep going up. 15 years later I am still saying the same thing but I made the decision about 8 years ago to get on the ladder and so far its 100% been the right decision. The housing market has been bonkers for years but you have two options. Complain and lose out or jump on the gravy train while it's still running. Even if the market dropped 20% we still wouldn't lose any money on our current house based on what we paid. We've been in here a little over 3 years and its gone from £458k -> ~£550k in value. Our first flat went from £226k -> £278k in a little under 3 years.

Its like so much of life. You either play the game and make money or you stay out of it and suffer the consequences all the same.

 

[rhobbyh]

Well house prices are still rising, a sellers market with houses flying off the shelves, rates are rising, wages aren't

Where's the money coming from

Quantitative easing has been propping up the housing market for many years

Last week, the millionaires of this particular government mooted a policy of 50 year mortgages that you passed down to your kids on death. I incredulously bought this up with a chap at a BBQ last week who instead of the expected horror actually said "well, we're going to need something like that" as if this was a great idea. People are thick.

 

[413x]

I don't think many people know you can look 4-6 months in advance.

I certainly didn't.

So many wait until really near the fix end to remortgage

 

[BUDFORCE]

Forget the BoE base rate to a certain extent.

The cost of borrowing on the money market has shot up, like 500% for some lenders, but swap rates have literally soared in the last few months.

So non-deposit taking lenders have to put their rates up otherwise it's basically not profitable.

Deposit taking (high street banks) have the edge but they also borrow money and they will have the increase rates on savings to stay competitive so will catch up soon.

Expect mortgage rates to go up significantly from.here on.

 

[Efour]

Isn't housing one of those parts of life where "making money/worth" isn't realised until you sell and downsize to a cheaper one, something a lot of buyers never actually do.....until death.. Unless you are a do-er upper or move into a S-hole.

My mortgage is half 3 month rolling and half fixed for another 2 years.... That is bad timing for sure on the 2nd half.
Me and the Soon to be wife are looking at rejiggling some money and paying the first half off without penalty "soon"
as for the 2nd half, well its not a huge amount by UK standards so im not too bothered about the interest rate but i might try and get a meeting with the bank and see if we can renew it and fix it for a decent length of time.
TBH im not really sure if Swedish mortgages follow the same rules as UK ones. Time to get reading.

 

[Freefaller]

1.52% until May 2026 thank goodness... hopefully by then country and market will be in a better situation....

 

[DanTheMan]

In May, I paid our early repayment charge of 2% to fix in at 1.86% for 10 years, as I didn't want the uncertainty.

I did the maths for 10 years at 1.86% + the ERC compared to no ERC and 2.3% for 10 years,and it still made sense to pay the ERC. Anything over 2.3% just means more of an overall saving.

I sound like a broken record but the amount of our friends and colleagues who are mortgaged at 90% LTV + is crazy. I feel for them over the next few years.

 

[Destination]

I'm on a lifetime tracker so meh... I didn't really see the point of a 2 year or 3 year fix, the rates weren't too different anyway and you then have the extra faff of getting a new mortgage every 2 or 3 years + paying a fee etc..

The silly thing was when trying to get the mortgage in the first place you have to spend ages answering questions from an "advisor" where they ask stuff about your feelings on certainty over what you need to pay etc.. then advise you on the types of mortgage to get etc.. I already knew what type of mortgage I wanted, I just wanted a quote and for them to check I was eligible/approved for it.

If I'd gone with a fixed rate then I'd have had to renew a bunch of times and it would all be moot anyway as when rates start to go up you're out of the deal anyway and I'm not sure the tracker deals that were available are still available now.

Agree, my lifetime tracker is base +0.39, so I'll just have to live with any increase as a fix with fees will no doubt rattle up higher anyway

 

[OldKitMan]

Took a 5 year fix at 1.64% in January, had been on the Nationwide BMR for a while as it wasn't much more expensive than trackers or fixed deals that tied me in but the projected increases meant it was a good time to fix so happy enough at 1.64%. Luckily I've only just over 5 years to go on my mortgage before it's finished anyway, I remember when I got my first fixed rate back in 1998, seem to recall rates dropped a lot not long after I got my fixed rate so always went for trackers after that. When it all went daft in the last good few years I just went onto the Nationwide BMR (not the new Nationwide SMR) as it was only a few quid dearer than the nearest fixed or trackers but with no lock in so the flexibility was nice to have then.

 

[TrojanWhore]

got almost 2 years left to run on my current fix (at just over 2%), fully expecting it to be higher when it's time to renew hopefully I can increase my earnings a bit in that time to offset it

 

[Martynt74]

Agree, my lifetime tracker is base +0.39, so I'll just have to live with any increase as a fix with fees will no doubt rattle up higher anyway

Great deal, mine is base +0.75, but i believe even that deal has gone and it's now base+1.25

 

[throwaway4372]

I never liked feeling the burden of a mortgage so I've overpaid aggressively (~100%) to get rid of it asap - which required a tracker to overpay without limits or fees. So I'm getting nibbled by rate rises now, but should have it all paid off in about 3 years.

 

[danlightbulb]

Where's the money coming from

Been asking that for years. It cant just be low rates and banks. People have got more money now, lower end salaries are higher than ever and mid range salaries, in my opinion, have not risen at the same rate, squeezing the middle.

 

[Mason-]

You know the penalties to get out of fixed terms are often pro-rated by the amount of your fix term left, so if you're close to the end sometimes it's worth just sucking up the penalty.

We came out of a 2 year fix (90% LTV, 2.49%), 4 months early, only paid about £1500 to do so. Fixed for 10 years (75% LTV, 1.93%), on a longer term and my repayments came down by £400 a month, so the exit fee I paid will be repaid in 4 months anyway. I did this because I was certain interest rates would go up a lot and I wanted to fix NOW.

Depending on what you want to do, it may be worthwhile paying the penalty to leave your fix early to secure a deal now. Maybe it's too late for some now, I don't know.

 

[fez]

Isn't housing one of those parts of life where "making money/worth" isn't realised until you sell and downsize to a cheaper one, something a lot of buyers never actually do.....until death.. Unless you are a do-er upper or move into a S-hole.

Yes but people are stupid and think "my house was worth X when I bought it and now its worth X + 20%" rather than "Oh ****, I want a bigger more expensive house so although my house has gone up by 20%, so has the ones that costs 30% more than my one."

 

[dlockers]

I think you chaps are missing the "keep up the median" dimension to this.

I can either spend my cash on nonsense and participant in the consumption economy -- or I can top-up my net wealth with an asset that'll either outperform the market or distinctly keep up with it.

I don't think I could possibly buy any more junk, so choosing to top up the net wealth in an area with high house price growth will a) give me long term options, b) ensure my family have options. I spent most of my teen years working 7 days a week to top my family up; I don't want my daughter to have the same issue. She can sell my place, buy a flat, and travel the world for a lifetime if she wants.

Edit: also I get to live there

 

[Maccy]

@Mason- I've just had started looking at figures for early exit - would be about £2400 to leave now, but monthlies could go down by about £140.

 

[Destination]

Been asking that for years. It cant just be low rates and banks. People have got more money now, lower end salaries are higher than ever and mid range salaries, in my opinion, have not risen at the same rate, squeezing the middle.

Agree, and under Osborne, may and that current shower of ***** , the tax burden on middle salary is higher than it has ever been.

 

[Freefaller]

On a slightly related subject, how accurate are zoopla evaluations? As it seriously affects LTV if they're basing their data off that.

When we took out our mortgage they didn't send anyone round to inspect the house which surprised me.