Mortgage Rate Rises

Zefan said:
Exact same situation, I've just "locked in" a 4.64% 2 year fix with Halifax (have to stick with them, one sub-account needing renewal with the other 3.5 years out, plus circumstances have changed) and am hoping this comes down somewhat by the time we're coming close to needing to sign on the dotted line. If I recall you're in a similar situation from posts in this thread. Might be in for a fun situation if rates are "imminently" coming down come SVR time, do you wait a month... Two? Then you're in to sunk cost and you just know the rates will plummet the moment you agree :D
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Yup similar situation, our extra borrowing is on SVR now.
Another option is to consider a tracker for a couple of years, who knows!
 
We just locked 4.04% with Nationwide for 5 years, it's a rate we can afford and given how things have been I am worried about it shooting up.
 
Freakbro said:
Covid did cause inflation, supply side inflation. With the combination of huge amounts of money having been saved through lockdowns and then supply shortages of goods (due to disruption in supply chains) led to rapid and large increases in costs of materials & goods.

Then the Ukranian war came along and caused more inflation with energy and food instability.
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Yep

Covid caused inflation in a number of ways. Shipping rates, raw material costs (e.g. wood) all rocketed as supplies fell and demand rose from households with disposable cash

On the flipside covid also caused Oil prices to drop due to demand destruction from other areas. So it was a bit of a mixed bag

The Ukraine war has squeezed Natural Gas supplies. But LNG exporters have ramped up their liquefaction capacity and have all but backfilled lost Russian gas (USA, Qatar, etc)

My prediction: Inflation will be back near 2% by year end and possible deflation next year. UK Government will take credit, when really it was the men and women in the Oil and Gas sector going hell for leather on new LNG supplies, ports etc
 
jonneymendoza said:
where did yo get that information from vs the one posted previously?

The north does not look exactly "clean" itself while looking at that
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Daily mail "science" I know I know. But it was backed by a university/copi study.
Its much more what I was expecting. The air around big cities and busy roads is bound to be dirtier than the Scottish highlands.
 
DJMK4 said:
I'm speaking with l&c at the moment , Barclays had dropped their rates. I am looking at a remortgage completion date of beginning of July .

Applied on 4.15% fix 5 years lender now doing product on 3.95% , how "down to the line" can you take it ? Ie if Barclays drop rate again in may or June can I jump on that ? Solicitors are not going to take a redemption statement until June or mid June from my current lender
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Just an FYI.
I rang l&c in Feb 2022 when 5 year rates were sitting at 1.7pc and asked about waiting for my mortgage to end naturally (Feb 23) vs paying my 1pc erc and jumping on a new product now.

The advisor thought it best to wait. In hindsight it was the wrong (very wrong) call. So it does show that even advisors didn't really have a clue.


2 Weeks later the best rate was now 1.93 and I just took it. Was quite funny. I got a call 6 months later from l&c (same guy) because my mortgage was coming up for renewal. Took great pleasure in saying I'd already renewed. He said I made a good call.


But yeah. Just shows that advisors arent always correct.
 
413x said:
Just an FYI.
I rang l&c in Feb 2022 when 5 year rates were sitting at 1.7pc and asked about waiting for my mortgage to end naturally (Feb 23) vs paying my 1pc erc and jumping on a new product now.

The advisor thought it best to wait. In hindsight it was the wrong (very wrong) call. So it does show that even advisors didn't really have a clue.


2 Weeks later the best rate was now 1.93 and I just took it. Was quite funny. I got a call 6 months later from l&c (same guy) because my mortgage was coming up for renewal. Took great pleasure in saying I'd already renewed. He said I made a good call.


But yeah. Just shows that advisors arent always correct.
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Yep
 
I'm really struggling to make my mind up. Were in the process of moving and my broker/advisor is suggesting fixing for 5 years at 4.02%. my head's telling me to fix for 2 years, but who knows what's round the corner. The penalties for getting out of the 5 year deal early are mental.

Not really sure what I can base my decision on with very little economic/financial experience. I'm swaying on trusting my mortgage advisor, but it could prove to be costly...
 
Matt-Page said:
I'm really struggling to make my mind up. Were in the process of moving and my broker/advisor is suggesting fixing for 5 years at 4.02%. my head's telling me to fix for 2 years, but who knows what's round the corner. The penalties for getting out of the 5 year deal early are mental.

Not really sure what I can base my decision on with very little economic/financial experience. I'm swaying on trusting my mortgage advisor, but it could prove to be costly...
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Get a spreadsheet out and run the actual numbers of your options month by month. It might get a lot more confusing at first but by looking at the exact data you can then fiddle about with possibilities in the future and make a more informed decision.
 
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Matt-Page said:
I'm really struggling to make my mind up. Were in the process of moving and my broker/advisor is suggesting fixing for 5 years at 4.02%. my head's telling me to fix for 2 years, but who knows what's round the corner. The penalties for getting out of the 5 year deal early are mental.

Not really sure what I can base my decision on with very little economic/financial experience. I'm swaying on trusting my mortgage advisor, but it could prove to be costly...
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There’s never going to be a clear answer. I guess it’s just down to whether you want the security of knowing exactly what you’re in for for 5 years, or whether you want to roll the dice.
 
Matt-Page said:
I'm really struggling to make my mind up. Were in the process of moving and my broker/advisor is suggesting fixing for 5 years at 4.02%. my head's telling me to fix for 2 years, but who knows what's round the corner. The penalties for getting out of the 5 year deal early are mental.

Not really sure what I can base my decision on with very little economic/financial experience. I'm swaying on trusting my mortgage advisor, but it could prove to be costly...
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Sit down and work out how much you’d actually see if mortgage rates in two years time were lower than 4% unless you mortgage is massive I can’t see the saving being huge over the 3 years you’d have left as realistically mortgage rates aren’t about to go back to 1.x% in that time frame. If I were renewing our ‘large’ mortgage today I’d take a fix at 4ish percent just for the peace of mind
 
Zefan said:
Get a spreadsheet out and run the actual numbers of your options month by month. It might get a lot more confusing at first but by looking at the exact data you can then fiddle about with possibilities in the future and make a more informed decision.
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a1ex2001 said:
Sit down and work out how much you’d actually see if mortgage rates in two years time were lower than 4% unless you mortgage is massive I can’t see the saving being huge over the 3 years you’d have left as realistically mortgage rates aren’t about to go back to 1.x% in that time frame. If I were renewing our ‘large’ mortgage today I’d take a fix at 4ish percent just for the peace of mind
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I did actually do this, although I don't know if what I did was correct... This is based on £316K Mortgage over 5 years....

Essentially, I did 3x Scenarios:

  • Scenario 1 - 5x Years @ 4.19% (4.19% was the 5 year rate we were offered a month ago)
  • Scenario 2 - 2x Years @ 4.63% (4.63% was the 2 year rate we were offered a month ago) + 3 Years @ 3% (3.5% is a guess of what rates could be in 2 years) + £2K Product/Arrangement Fees (Product Fee is for 2x 2 year fixed we'd need to get to 5 years term)
  • Scenario 3 - 2x Years @ 4.63% (4.63% was the 2 year rate we were offered a month ago) + 3 Years @ 3% (3% is a guess of what rates could be in 2 years) + £2K Product/Arrangement Fees (Product Fee is for 2x 2 year fixed we'd need to get to 5 years term)
Does the above make sense?

Over the 5 year term, total costs would be
Scenario 1 = £94,200
Scenario 2 = £93,716
Scenario 3 = £90,620

In the grand scheme of things, it doesn't make a HUGE difference, and that's assuming the rates will be at 3.5% or 3% in 2 years time and stay at those rates for the remaineder of the 5 year term.

Am I looking at this correctly or way off? To be honest, I struggled how else to look at it, and was surprised at the minimal difference it made...

Thanks
 
Matt-Page said:
I did actually do this, although I don't know if what I did was correct... This is based on £316K Mortgage over 5 years....

Essentially, I did 3x Scenarios:

  • Scenario 1 - 5x Years @ 4.19% (4.19% was the 5 year rate we were offered a month ago)
  • Scenario 2 - 2x Years @ 4.63% (4.63% was the 2 year rate we were offered a month ago) + 3 Years @ 3% (3.5% is a guess of what rates could be in 2 years) + £2K Product/Arrangement Fees (Product Fee is for 2x 2 year fixed we'd need to get to 5 years term)
  • Scenario 3 - 2x Years @ 4.63% (4.63% was the 2 year rate we were offered a month ago) + 3 Years @ 3% (3% is a guess of what rates could be in 2 years) + £2K Product/Arrangement Fees (Product Fee is for 2x 2 year fixed we'd need to get to 5 years term)
Does the above make sense?

Over the 5 year term, total costs would be
Scenario 1 = £94,200
Scenario 2 = £93,716
Scenario 3 = £90,620

In the grand scheme of things, it doesn't make a HUGE difference, and that's assuming the rates will be at 3.5% or 3% in 2 years time and stay at those rates for the remaineder of the 5 year term.

Am I looking at this correctly or way off? To be honest, I struggled how else to look at it, and was surprised at the minimal difference it made...

Thanks
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£3k for peace of mind over 5 years? Ya, 5 years please.
 
Hard for you to make a decent risk assessment when all your scenarios are based on rates going and staying down. From the scenarios 3k over 3 years for a 300k mortgage doesn't seem like a massive burden that you'll kick yourself for
 
koolpc said:
Myself, i would just go the 2 year route as i really think that interest rates will come down by then.
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Think I'd do the same.

Rates could come down a lot. It's not impossible to see 2.something in 2 years.

But is it worth it? That's a gamble only the individual can assess.


I don't think it will go higher in 2 years myself. But you never know
 
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