Well tracker mortgages are going to go up.
2 year BARCLAYs is 3.60% at the moment, surely those are going to go up by a good chunk.
Mortgage Rate Rises
- Thread starter glenimp617
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2 year BARCLAYs is 3.60% at the moment, surely those are going to go up by a good chunk.
I'm so glad I got a lifetime tracker now; just no-nonsense, I've had it for a decade, no need to renew it (complete with additional fees every 2, 3 or 5 years) and it turns out that even when rates go up it's still better value than the fixed deals people are getting "just to be safe".
Granted abetter play would have been to perhaps get a 15 year fix last year IF I were planning to stay in my current place, but I'm not, I'm hoping to move in the next year or two. It's all a bit moot tbh.. current mortgage is like < 30% LTV, prices could fall a fair bit or rates could go up more and it's going to have limited impact.
In fact if prices do fall a little bit I guess it eats away a bit at some of my equity but it should hopefully mean the future (more expensive) home purchase is cheaper which is still better overall - I guess the main risk is regional variations, the sorts of places I would like to move to increased a bit during covid when my area/property type (apartment in London) stayed pretty stagnant, I'd hope those areas will fall a bit more and mine a bit less but obvs mine could fall more I guess and that would be bad relatively if the desirable areas just outside London maintained their prices.
Granted abetter play would have been to perhaps get a 15 year fix last year IF I were planning to stay in my current place, but I'm not, I'm hoping to move in the next year or two. It's all a bit moot tbh.. current mortgage is like < 30% LTV, prices could fall a fair bit or rates could go up more and it's going to have limited impact.
In fact if prices do fall a little bit I guess it eats away a bit at some of my equity but it should hopefully mean the future (more expensive) home purchase is cheaper which is still better overall - I guess the main risk is regional variations, the sorts of places I would like to move to increased a bit during covid when my area/property type (apartment in London) stayed pretty stagnant, I'd hope those areas will fall a bit more and mine a bit less but obvs mine could fall more I guess and that would be bad relatively if the desirable areas just outside London maintained their prices.
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2 year swap rates have been reasonably stable at around 4.5% since the beginning of November - https://uk.investing.com/rates-bonds/gbp-2-years-irs-interest-rate-swap
Be wary of fixing at higher than that unless you really value the security. Chances are most fix rate deals will drop to around these levels within the next month.
Still a painful jump for many who have 2/3/5 fixed rate deals expiring soon though. Depending on your risk appetite, tracker mortages are definitely worth considering at the moment. Next CPI report due in a few days may indicate which way things are likely to go.
Be wary of fixing at higher than that unless you really value the security. Chances are most fix rate deals will drop to around these levels within the next month.
Still a painful jump for many who have 2/3/5 fixed rate deals expiring soon though. Depending on your risk appetite, tracker mortages are definitely worth considering at the moment. Next CPI report due in a few days may indicate which way things are likely to go.
Tracker is the way to go. Can't see base rates over 4%.
BoE and markets expect 4.5% at peak.
Ah yes I do remember that. Scary times.
dlockers
D
dlockers
You could have fixed for 15 years regardless of if you are selling - you can port the product over.
I agree.
If I'd had gotten a tracker for even my first mortgage it would have been better than the fix due to exit fees.
This remortgage was a sensible fix (5yr 1.93) but if I was remortgaging now no way would I be fixing at 4pc+.
I'd get a tracker in. The belief rates will top out at 4pc ish. Then drop back down.
Fixing at 5pc for 5 years for example seems a bit mad.
That's always the gamble you play though. We could have another global financial event like the 70s or 00s that could cause interest rates of 8-10%
Nobody knows for sure, you just have to plan for what's comfortable for you.
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If this happens.. Game over!
Totally understand people wanting to lock in at a price they can afford. Everything is risk management and appetite.
Especially if mortgage is big like ours.
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I mean it might work out, rates might well go a lil bit higher for a bit but it's kinda "meh", if they go higher mid way through and stay higher then the fix person still needs to remortgage in a couple of years and if they don't and drop then they've lost out. With the lifetime tracker I've had a decade of low rates and no additional remortgage fees, if I get a lil blip in the fees at the mo then it settles at some 4%-sih rate for the foreseeable future then, well, I'm in the same positon as the tracker people who need to remortgage anyway and waaay better off than people on SVRs or temporary discount rates etc..
I can see the US 30 year trackers can be great (if you're not moving and time things well), someone timing that well is laughing now but they don't tend to allow those over here, I wonder if it's perhaps because the US is a bit more on the side of the banks vs consumers whereas in the UK there is a prevailing attitude that if you've lost out from some financial product then the company that sold it to you has to have given like half a dozen different warnings lest they be accused of misselling and the transaction voided.
I could definitely see a repeat of the endowment "scandal" if 30 year fixes were available; Shirley and Mark appear in the Daily Fail/the Sun/the Mirror with their best compo faces on complaining that they still have to pay 5% for the next 20 years when everyone else is paying 2% now and how they can't move house anymore (or can but need to downsize).
The endowment thing wasn't really anything too scandalous; it wasn't fraud, people were sold a product that involved an interest-only mortgage + an investment and life assurance (their capital repayments went into), at the end of the term the investment should be more than enough to pay off the principle. My parents had one of these and it worked out fine, the investment was indeed more than enough to pay off the mortgage + they had an additional lump sum on top, if it hadn't been on course to do that then they'd have simply contributed more as they're not idiots. Other people seemingly just got these products, and didn't really keep an eye on them (and nor did the people who sold them) and at the end of their mortgage they were all [pikachu face] at the shortfall - something that could have been corrected with large contributions if they'd looked at their statements, of course, because the banks/insurance companies etc.. didn't actively advise on these then they're at fault and the people who bought them then casually ignored their mortgage statements over many years aren't to blame at all.
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All fixed rates are a bet between you and the mortgage company. You bet average rates will be higher, they bet they will average lower. Another benefit is knowing what you'll pay of course.
We lucked out by taking out an tracking interest only endowment mortgage with an offset account 18 years ago. We benefitted from low interest rates and great ISA growth, as a result we did a lot better than having a fixed rate repayment option. An option that many people were pretty critical of, but if you are disciplined with the savings element it can work out really well. We stand to pay of the mortgage with about £30 to 40k as a lump sum left over - would have been a lot more bar the IDIOTIC actions of Truss and Kwateng.
The main thing is that people taking out new mortgages go in with good advice and a mortgage advisor that is on their side!
We lucked out by taking out an tracking interest only endowment mortgage with an offset account 18 years ago. We benefitted from low interest rates and great ISA growth, as a result we did a lot better than having a fixed rate repayment option. An option that many people were pretty critical of, but if you are disciplined with the savings element it can work out really well. We stand to pay of the mortgage with about £30 to 40k as a lump sum left over - would have been a lot more bar the IDIOTIC actions of Truss and Kwateng.
The main thing is that people taking out new mortgages go in with good advice and a mortgage advisor that is on their side!
My money is on 0.25, seeing as the US went with 0.50
That's what I'm thinking. I would prefer no increase given the Fed's 0.50 uplift.
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0.25 gets my vote, we won't have as much wiggle room as the US with fiscal policy so if we see them only doing 0.5 we'll probably trail behind it.
If they had done 0.75 I think we'd have done 0.5.
If they had done 0.75 I think we'd have done 0.5.
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