Mortgage Rate Rises

[adam cool dude]

At this moment in time i found the rate for 5 year fixed to be lower than 2 year fixed.

Obviously because lenders are betting on rates coming down in a couple of years. We took a risk at 3 years 3.48%. If the rates are still high by then I think a lot of people would have had their houses repo'ed.

 

[mattyprice4004]

there will be at least one more bump prob to 4% .. then it will take 3-5 yrs to come down to a stable 2%

You reckon?
Everything I've read / seen suggests we'll not be returning to 2% for a good while, possibly a decade

 

[unwashed potato!]

Variable was slightly less like 4.5% or something. It’s my first home so I’m an idiot when it comes to mortgages. My current price ends on the 30/06 and I’m really not sure what I should do.

Don't feel bad for yourself as honestly everyone is the same. I had nothing to reference when I first took mine, my offer of 2.34 was what I assumed was a really good rate and took 5 years, however if I had taken just 2 years as I initially thought to, I'd have renewed right at the lowest possible rate during covid.

I could have gone to my parents for more advice, but what do they know, they first got mortgages 20 odd years ago, interest rates of 15pc so if I say 5 pc what do you think, they will say jump at it.

Very few people have high knowledge of how mortgages work.

 

[dlockers]

Don't feel bad for yourself as honestly everyone is the same. I had nothing to reference when I first took mine, my offer of 2.34 was what I assumed was a really good rate and took 5 years, however if I had taken just 2 years as I initially thought to, I'd have renewed right at the lowest possible rate during covid.

Snap!

And even when I was buying this one, I only locked in my 2nd half of the mortgage for 2 years like an idiot.

 

[Martynt74]

I need to review half of my mortgage in March 2024, so will start looking around June/July I guess.

Currently it looks like I will be going from 2.39% to 4.69%, so the mortgage will go from £3118 to £4116 (5 year fix). Or, alternatively, £4233 over a 2 year fix @ 4.99%.

I'm tempted to go variable on the basis "it can't go up again!!!" which is £3662 @ 3.49%.

I'm not that far off of an 80% LTV (~82%) at the moment, which sees some minor decreases (£1200/year on the variable).

I'd check that rate. 3.49% is lower than the actual base rate so looks outdated to me. My tracker is 0.75% + Base and 0.75% seems unheard of looking around they're usually ~1.25%+

 

[dlockers]

I'd check that rate. 3.49% is lower than the actual base rate so looks outdated to me. My tracker is 0.75% + Base and 0.75% seems unheard of looking around they're usually ~1.25%+

It was just a quick spank on the mortgage comparison site:

https://www.moneysupermarket.com/mortgages/rates-table/home-purchase/?propertyValue=860000&mortgageAmount=687500&remainingTerm=25&repaymentMethod=Repayment&mortgageType=Fixed,Variable&mortgageTerm=FiveYears,TwoYears&sortState=MonthlyRepaymentAmount&from=Help-me-choose

Edit:

Newcastle

2 year discounted​

Full details

• £3,365
  Monthly payment
  until 31/3/2025
• 3.29%
  Initial rate
• £999
  Product fees
• £82,470
  Initial term cost
• 4.7%
  APRC

 

[413x]

You reckon?
Everything I've read / seen suggests we'll not be returning to 2% for a good while, possibly a decade

I think so too. That it will come right down. Possibly settling at 2-3

 

[jaybee]

You reckon?
Everything I've read / seen suggests we'll not be returning to 2% for a good while, possibly a decade

Obviously nobody really knows. My guess - and it is just that - is that in a few years, rates will be a tiny bit lower than what they are now, and then it will stay that way for a while.

Don't feel bad for yourself as honestly everyone is the same. I had nothing to reference when I first took mine, my offer of 2.34 was what I assumed was a really good rate and took 5 years, however if I had taken just 2 years as I initially thought to, I'd have renewed right at the lowest possible rate during covid.

I could have gone to my parents for more advice, but what do they know, they first got mortgages 20 odd years ago, interest rates of 15pc so if I say 5 pc what do you think, they will say jump at it.

Very few people have high knowledge of how mortgages work.

Snap!

And even when I was buying this one, I only locked in my 2nd half of the mortgage for 2 years like an idiot.

I'm the same. We were pondering over whether to do 2 year fix or 5 year for ages. Did loads of reading up on it and watching vids. Asked a broker their opinion. Mates etc. At the end of the day we went for 5 year fixed at about 1.89 I recall. Really good, but long term, we may have been better going for a 2 year, then locking in for 10 at about 2.5%. At the time, we thought there was risk of them going up earlier than they did, so went with 5. Hey ho. When we renew in 3 years, if they are at 5/6% we probably won't be able to cope with that.

 

[happy_2008]

It was just a quick spank on the mortgage comparison site:

https://www.moneysupermarket.com/mortgages/rates-table/home-purchase/?propertyValue=860000&mortgageAmount=687500&remainingTerm=25&repaymentMethod=Repayment&mortgageType=Fixed,Variable&mortgageTerm=FiveYears,TwoYears&sortState=MonthlyRepaymentAmount&from=Help-me-choose

Edit:

Newcastle

2 year discounted​

Full details

• £3,365
  Monthly payment
  until 31/3/2025
• 3.29%
  Initial rate
• £999
  Product fees
• £82,470
  Initial term cost
• 4.7%
  APRC

Thats your full mortgage payment or just half?. Either way its still

 

[Martynt74]

It was just a quick spank on the mortgage comparison site:

https://www.moneysupermarket.com/mortgages/rates-table/home-purchase/?propertyValue=860000&mortgageAmount=687500&remainingTerm=25&repaymentMethod=Repayment&mortgageType=Fixed,Variable&mortgageTerm=FiveYears,TwoYears&sortState=MonthlyRepaymentAmount&from=Help-me-choose

Edit:

Newcastle

2 year discounted​

Full details

• £3,365
  Monthly payment
  until 31/3/2025
• 3.29%
  Initial rate
• £999
  Product fees
• £82,470
  Initial term cost
• 4.7%
  APRC

Impressive if so, although i imagine the page must be out of date and running behind the recent BOE change maybe?

 

[Simmz]

Impressive if so, although i imagine the page must be out of date and running behind the recent BOE change maybe?

Yeah you won't get them deals. Some even show as 2% still. Friend tried to call a couple of the brokers and they couldn't do anything under 4.5%.

 

[Martynt74]

Yeah you won't get them deals. Some even show as 2% still. Friend tried to call a couple of the brokers and they couldn't do anything under 4.5%.

4.5% still seems fairly impressive given it's locked in Base Rate + 1% so very little margin for the banks. Given it's expected to increase to 4.5% base rate in mid 2023 i'd jump at them on a shortish fix.

 

[Phill4321]

I read that the best way for banks to tackle inflation is via raising interest rates. I read that if we had sticky inflation it was possible that rates could go up and stay up for a while (possibly years).

My mortgage was due to renew around mid this year but I didn’t want to chance it and paid £2300 as an ERC to come out of my old mortgage last July. I also had to pay £999 as a product fee for the new mortgage at the new rate.

I managed to get a 10 year fixed at 3.09%. It was a shame about having to pay an ERC and also the product fee for the new mortgage but it bought peace of mind and our monthly repayments are easily affordable. I saw it as a hedge against uncertainty at the time.

 

[unwashed potato!]

I saw it as a hedge against uncertainty at the time.

Never a bad thing. you can gamble, or lock in 10 years, and enjoy the 10 years with peace of mind.

i can't wait to be locked into a new deal. i know it's going to suck, i know it's going to hurt our plan (especially when you add in energy costs), but at least once it is locked in, i'm free of the burden of thinking about it, well at least until i next have to renew.

 

[Phill4321]

Never a bad thing. you can gamble, or lock in 10 years, and enjoy the 10 years with peace of mind.

i can't wait to be locked into a new deal. i know it's going to suck, i know it's going to hurt our plan (especially when you add in energy costs), but at least once it is locked in, i'm free of the burden of thinking about it, well at least until i next have to renew.

100%. I’m glad we did it even with the expense. Me and my wife sleep much better knowing what our monthly payments are and also knowing that we won’t have the worry of shopping around in the future with potentially higher rates than what we were able to lock in at last year. Even if rates drop below 3% in the near future we honestly don’t mind.

 

[MatsyLR]

I'm on 4.59 for 5 year (purchase pending!)
Don't mind if it drops as the difference is low due to the loan being low

 

[kevman]

Impressive if so, although i imagine the page must be out of date and running behind the recent BOE change maybe?

Some variable rates are linked to base rate some are discounted from the banks standard variable rate. Personally i would prefer having mine linked to base rate. Svr is in banks control

 

[dlockers]

Some variable rates are linked to base rate some are discounted from the banks standard variable rate. Personally i would prefer having mine linked to base rate. Svr is in banks control

Interesting, didn't know this. I really need to stop using online mortgage brokers lol.

 

[Mercenary Keyboard Warrior]

I read that the best way for banks to tackle inflation is via raising interest rates. I read that if we had sticky inflation it was possible that rates could go up and stay up for a while (possibly years).

My mortgage was due to renew around mid this year but I didn’t want to chance it and paid £2300 as an ERC to come out of my old mortgage last July. I also had to pay £999 as a product fee for the new mortgage at the new rate.

I managed to get a 10 year fixed at 3.09%. It was a shame about having to pay an ERC and also the product fee for the new mortgage but it bought peace of mind and our monthly repayments are easily affordable. I saw it as a hedge against uncertainty at the time.

This is the point of a long term fix, the certainty. 100%

Your almost certainly over the term going to pay more, unless you get lucky, but certainty with many is vastly undervalued.
Until something goes against them and they re-evaluate that choice they made.

 

[unwashed potato!]

Am I right in thinking, that if I renew for 2 years at say 4 percent, and then another 3 years at 4 percent, rather than just doing 5 years at 4 percent, my total payment overall will be lower, as the percentage is worked out in what's left at the time of taking out the renewal, rather than what's left at the time of each payment?