Mortgage Rate Rises

Devrij said:
Dunno what you guys are looking at, but as a first time buyer I am looking at 8%APR, and the average 2 bed house here in Bath is around £300k. So yeah that is waaaaay outside my price bracket.

It feels like you'd need to earn £100k just to be able to afford a mortgage around here for an average house. Not even a nice one!

It's literally £800+ per month more expensive to buy a place than to rent it. So effectively you need to have that kind of disposable income available to free up
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Where are you looking? There are plenty of 5 year fixes at around 4.5% with a 90% LTV. On a 300k property with a 30k deposit that's about £1500 per month for 25 year mortgage.
Try moneysupermarket or whatever comparison site to get an idea.

Looks pretty similar to renting to me - but you need the deposit of course.
 
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fez said:
What am I missing here? I did a check earlier and if we remortgaged now with a £200k loan on a ~£550k house we would be looking at about 6% on a 2 year and a bit over 5% on a 5 year...

Are people just looking at the headline rate and not the product fee?
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Sounds too high. Lots of 5 year fix options with no product fees at 4.0-4.2%. Work out a little less than that overall if you take a product fee.
 
Devrij said:
It's literally £800+ per month more expensive to buy a place than to rent it.
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Currently...

Remember those rents will be for properties that are on old rares and have x years left. Wait a couple years when the landlord renew at 8 percent, and then you'll be seeing some crazy rent price.

Best of luck with however you manage to get on the ladder.

It sucks but have you thought to purchase and rent a room or 2 out?

We do that, and get currently £1k in rent per month. We are currently "annexing" a space from our house and will hope to get another £800 or more from that, though will then kick one tenant out or maybe both.

It sure has helped as we've done loads of work to the house, and trying to over pay as much as we can.
 
unwashed potato! said:
Currently...

Remember those rents will be for properties that are on old rares and have x years left. Wait a couple years when the landlord renew at 8 percent, and then you'll be seeing some crazy rent price.

Best of luck with however you manage to get on the ladder.

It sucks but have you thought to purchase and rent a room or 2 out?

We do that, and get currently £1k in rent per month. We are currently "annexing" a space from our house and will hope to get another £800 or more from that, though will then kick one tenant out or maybe both.

It sure has helped as we've done loads of work to the house, and trying to over pay as much as we can.
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well that's something i could never do ..have people live in your home ...it was bad enough when the kids were here :P
 
EvilRob said:
Sounds too high. Lots of 5 year fix options with no product fees at 4.0-4.2%. Work out a little less than that overall if you take a product fee.
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Have you got an example of this? I was on a comparison site when I found the rates I gave. I just went onto YBS and entered the information and the lowest rate they would offer on a 2 year fix is 4.28% + a £1495 product fee which gives you an effective rate of 6.32%.

On a different comparison site I can find just under 6% all in. I can't help but feel people who are quoting 4% are just looking at the initial rate and ignoring product fees. The only way I can get it under 5% total is by looking at 10 year mortgages.
 
fez said:
Have you got an example of this? I was on a comparison site when I found the rates I gave. I just went onto YBS and entered the information and the lowest rate they would offer on a 2 year fix is 4.28% + a £1495 product fee which gives you an effective rate of 6.32%.

On a different comparison site I can find just under 6% all in. I can't help but feel people who are quoting 4% are just looking at the initial rate and ignoring product fees. The only way I can get it under 5% total is by looking at 10 year mortgages.
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Are you sure it's not you who is misinterpreting what the APRC means?


Or 2 year


On the 5 year at least it would probably work out even cheaper if you took a product fee. Maybe on the 2 year as well. The number to focus on is the initial term cost.
 
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EvilRob said:
Where are you looking? There are plenty of 5 year fixes at around 4.5% with a 90% LTV. On a 300k property with a 30k deposit that's about £1500 per month for 25 year mortgage.
Try moneysupermarket or whatever comparison site to get an idea.

Looks pretty similar to renting to me - but you need the deposit of course.
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This was just with Lloyd's, tbf I have seen better rates around 6%ish shopping around. Our rent is £1k/m for a 2 bed terrace, but it's shooting up around us so it's only a matter of time before our landlords follow suit. They do own the place outright though so there isn't pressure from mortgage rises forcing their hand right now.
 
Just got my paperwork through on 3.95% fixed for 5 years. It could have been better perhaps, but it could definitely have been worse...

This might sound daft, but can someone clarify please. The new mortgage is for £178,500 ish. There is a £995 fee added to that, so I will pay back £179,500 ish, but I need to pay down my current mortgage just to £178,500, right? I've got £10k to pay off my current (ending) mortgage but that will actually take me a little below £178,500 by maybe a grand. Should I just pay down to the exact amount of £178,500? What happens if I'm off by £500 or so? (Either way)
 
AndyCr15 said:
Just got my paperwork through on 3.95% fixed for 5 years. It could have been better perhaps, but it could definitely have been worse...

This might sound daft, but can someone clarify please. The new mortgage is for £178,500 ish. There is a £995 fee added to that, so I will pay back £179,500 ish, but I need to pay down my current mortgage just to £178,500, right? I've got £10k to pay off my current (ending) mortgage but that will actually take me a little below £178,500 by maybe a grand. Should I just pay down to the exact amount of £178,500? What happens if I'm off by £500 or so? (Either way)
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When you complete your conveyancer will ask you to transfer them any shortfall for completion. There's usually a little wiggle room from the mortgage provider also. Same vice versa. Not something you need to worry about imo
 
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It's amazing how much rates have come down.
I'd be looking at 3.83 now vs 1.93 + 2k erc I took a year ago.
So even though it was still the right decision is much closer than I was expecting it to be.

The 3.83 is a shade under 200gbp a month. So it would take a year to see the benefits of the 1.93 +erc


Wonder what the next 12 months looks like, because 3.83 when base rate n(and thus trackers) are probably hitting 5 looks like a decent bet.


I don't think there will be many big drops in mortgage rates in the next 12 months. And that base rate will be down in the 3pc range in 12 months.

(I know swap rates are more important, but still surprised)
 
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Unfortunately I suspect there will be quite a number of people regretting paying the ERC last year to fix before their cheap deal ended and fixing at higher than required rates in a panic.

I know someone who's now fixed for 5 years at nearly 5% after paying a few thousand in ERC! I tried to talk sense into them, but they didn't listen. They just kept going on about the news stories predicting 6-7% as if they were fact.
 
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MichaelAwkward said:
Unfortunately I suspect there will be quite a number of people regretting paying the ERC last year to fix before their cheap deal ended and fixing at higher than required rates in a panic.

I know someone who's now fixed for 5 years at nearly 5% after paying a few thousand in ERC! I tried to talk sense into them, but they didn't listen. They just kept going on about the news stories predicting 6-7% as if they were fact.
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Well it did look possible after the Truss fiasco to be fair. Probably better for some rather than risk losing their house.
 
It's hard to know in hindsight what I personally would have done under the truss pressure (before knowing she was on her way out) . But I've never thought 6-7pc was likely as it would be game over and simply wasn't required.

But in the moment? With the fear of having to pay 6-7pc? Even if the chance was tiny? Hard to know. And easy to say I'd have held firm.


Quite sick to think could be paying 5pc for 5 years when those rates were only around for a few months. Can easily be 100s a month and 10s of thousands over 5 years.
 
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I can't see rates going to 7% it would kill the economy and cause a housing crisis. With the banks holding on to all these mortgage-back securities it's the last thing they want.

I recently got a 2-year fixed at 4.6% but could have gone for 5-year at 4.1% but decided to roll the dice.
 
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I can't see rates going to 7% it would kill the economy and cause a housing crisis.
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The game changer is seeing it not as a choice but a consequence, if rates must rise then 10% can be a normal to balance all the years it was too low. A quarter of UK national debt is linked to inflation the largest amount in the world so I guess we are more likely then most to raise rates.
 
silversurfer said:
The game changer is seeing it not as a choice but a consequence, if rates must rise then 10% can be a normal to balance all the years it was too low. A quarter of UK national debt is linked to inflation the largest amount in the world so I guess we are more likely then most to raise rates.
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So many people have got their heads in the sand. This is only the beginning. Like the old saying goes it has to get worse before it can get better.
 
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