Mortgage Rate Rises

kevman · 9 May 2023 at 09:15

Looking for some crystal ball advice - what are the latest experts saying on interest rate drops these days? I see ING are predicting 2.75% by 2025 but BoE is much more conservative at 3.6% by 2025. Any tips from finance sector peeps?

I need to renew my mortgage soon and looking at 2yr fix at 4.24% or variable which is base rate + 0.24%. Just trying to bet on the cheapest option

doodah · 9 May 2023 at 09:50

Well we went from hopefully/likely peaking at BoE rate of 4.5%, now more likely to peak at 5%. I didn't realise they were predicting sub 3% within 2 years. A lot of rates we're seeing are >4.8% for anything tracking so 4.24% for a couple of years doesn't seem that bad, and then switch to what should be a lower rate.

kevman · 9 May 2023 at 10:32

I dont think it will get to 5.0 - think that is just what the investors are saying. Last year investors were predicting above 6.

Maybe the fixed is the best option - need to run some numbers

Confuzz · 9 May 2023 at 11:08

I think when rates do peak that the BOE will be slow to lower them again. Could be a while before inflation is at 2%

Freakbro · 9 May 2023 at 11:10

I think at the moment it's all down to your own appetite for risk and margin of affordability.

200sols · 9 May 2023 at 11:10

kevman said:
I dont think it will get to 5.0 - think that is just what the investors are saying. Last year investors were predicting above 6.

Maybe the fixed is the best option - need to run some numbers

Policy change avoided that, after the Truss debacle 6% looked like the lower end of what would be needed if they didn't stop the madness.

413x · 9 May 2023 at 11:40

Was only a couple of months ago 4.5 looked. Like the peak.

Now it's maybe 5pc.

Only need another few 10pc plus monthly inflation figures to keep that 5pc cemented for a while.

BUDFORCE · 9 May 2023 at 15:43

I would guess at another small rise yet, but who knows.

adam cool dude · 9 May 2023 at 16:12

BUDFORCE said:
I would guess at another small rise yet, but who knows.

700,000 UK households missed rent and mortgage payments last month. It is going to be a long long time before things go down.

413x · 9 May 2023 at 16:21

adam cool dude said:
700,000 UK households missed rent and mortgage payments last month. It is going to be a long long time before things go down.

What is normal?

Bald-Eagle22 · 9 May 2023 at 18:56

Skipton launches 100% mortgage product to help renters buy a home

The five-year fix is open to all first time buyers who currently rent and pass the lender's affordability criteria, allowing them to borrow up to 100% of the value of the property.

www.thisismoney.co.uk

100% Mortgages , when will they ever learn !

Great news for me as I’m about to put a 1 bed flat on the market .

200sols · 9 May 2023 at 19:00

Bald-Eagle22 said:
Skipton launches 100% mortgage product to help renters buy a home

The five-year fix is open to all first time buyers who currently rent and pass the lender's affordability criteria, allowing them to borrow up to 100% of the value of the property.

www.thisismoney.co.uk

100% Mortgages , when will they ever learn !

Great news for me as I’m about to put a 1 bed flat on the market .

What do you mean when will they learn? There are many many people there who can afford rent and manage to pay each month but cannot save for a deposit.

Bald-Eagle22 · 9 May 2023 at 19:19

200sols said:
What do you mean when will they learn? There are many many people there who can afford rent and manage to pay each month but cannot save for a deposit.

So what do you think this does to prices ? Do you not think it then just then inflates from the bottom up , yes / no ?

Only time will tell but I’ll have a bet it only does one thing, up she goes. Combine this with lower Inflation and lower interests rates in a years time if you think house prices are going to stay stagnant your living in cloud cuckoo land .

200sols · 9 May 2023 at 19:24

Bald-Eagle22 said:
So what do you think this does to prices ? Do you not think it then just then inflates from the bottom up , yes / no ?

Only time will tell but I’ll have a bet it only does one thing, up she goes. Combine this with lower Inflation and lower interests rates in a years time if you think house prices are going to stay stagnant your living in cloud cuckoo land .

Bizarre rant since I never said prices would stay stagnant?

These mortgages are needed because of the state of the market and subsequent house prices, they are not the driver.

unwashed potato! · 9 May 2023 at 19:25

200sols said:
What do you mean when will they learn? There are many many people there who can afford rent and manage to pay each month but cannot save for a deposit.

Exactly. Just giving 100 percent mortgages to anyone won't happen. It'll (hopefully) be to those who clearly can afford to get a mortage and pay one, just don't have a deposit saved up.

I wonder how they decide things that tenants don't budget for, e.g. new boiler, things breaking etc, that renting doesn't involve.

Bald-Eagle22 said:
So what do you think this does to prices ? Do you not think it then just then inflates from the bottom up , yes / no ?

arguably, you could say, renters stuck renting from a private landlord, keeps house prices up and rent prices up. as renters leave these rented properties, could it not be argued that landlord have to possibly lower rents, or sell?

ChrisD. · 9 May 2023 at 19:30

Being able to pay rent does should not qualify someone to be able to pay a mortgage, especially if they are unable to pay rent & save as that is exactly what affordability checks would uncover.

Sythe79 · 9 May 2023 at 19:31

It would be a nice get out clause for all these great landlords that say there's no money in it, it would give you the option to just sell the property to the Tennant.

A new twist on right to buy... right to offload, maybe ?

unwashed potato! · 9 May 2023 at 19:34

Sythe79 said:
there's no money in it

although i do some what i agree, don't forget, the issue for landlords now is that you get taxed on rent, before you take off costs, and it's likely landlords will be in the higher tax bracket if they have a full time job and rental income of a property coming in.

now that doesn't mean landlords don't make money, especially after say the first 10 years mortgage has been paid off, the remainder must be good money, on top of having a house that goes from say £200k, to £400k, however that's not direct in the landlords pockets until they do eventually sell.

dlockers · 9 May 2023 at 19:35

Bald-Eagle22 said:
Skipton launches 100% mortgage product to help renters buy a home

The five-year fix is open to all first time buyers who currently rent and pass the lender's affordability criteria, allowing them to borrow up to 100% of the value of the property.

www.thisismoney.co.uk

100% Mortgages , when will they ever learn !

Great news for me as I’m about to put a 1 bed flat on the market .

This is actually a great product and has more common sense than almost any other mortgage product I've seen. I was paying 1400/mo for rent and it took me ages to get 10% on a 450k house. It must be even worse for a lot of folk now.

413x · 9 May 2023 at 21:58

But, at the end of the day, it will help boost prices.

So although (like all these ideas) it helps the direct recipients but makes it more difficult for everyone coming after.