Mortgage Rate Rises

413x said:
6pc! :o

At least (I guess) it wasn't a big jump being on a high rate previous! But still.. :o
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Yeah its not great.

I am due some inheritance at some point this year and if i had got it by now the plan was to put down a 4k payment in the cooling off period to avoid any overpayment fee which would have reduced the monthly cost going forwards. Now i am thinking when i do get it to put around £150 a month down ( i think thats the max i can do without being paying a fee)
 
Smeghead said:
Thanking my lucky stars that I was approved for a 1.9% fixed for 5 years back in Apr 2022, and they still honored it even though the process dragged on a bit and I didn't complete till August.
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We took a similar deal in January 2022 just wish I'd locked in for 10 years as rates weren't much over the 5 year!

The change in Mortgage rates has had a serious impact on our renovation plans for our new house effectively slashing 50% off our budget as we need to keep that money back to pay the mortgage balance down at the end of the fixed rate to keep the payments affordable although I am hoping a slight drop in rates between now and then will reduce the pain there is no hope of a renewal at anything near 2%!
 
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Bassmansam said:
Yeah its not great.

I am due some inheritance at some point this year and if i had got it by now the plan was to put down a 4k payment in the cooling off period to avoid any overpayment fee which would have reduced the monthly cost going forwards. Now i am thinking when i do get it to put around £150 a month down ( i think thats the max i can do without being paying a fee)
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You should be able to make your yearly x% over payment as a lump sum and the lender should recalculate your monthly payment at that point to avoid any fees.
 
413x said:
Same here!
Just hoping rates drop to 1-3pc by 2027 when mine is up for renewal.

Its shocking how such a decision can genuinely change your life over half a decade.

Its not just 50 quid a month. It's 100s. Every month!
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I still kick myself for my mortgage timing.

Took a 3 year fixed 3% mortgage out back in December 2019 to buy and renovate a house, thinking it would take 3 years to do up and then re-mortgage at a lower LTV and save £100 a month with sub 2% mortgage.

Finished renovation in 2 years and didn't expect rates to go up before remortgage. In hindsight should have paid the 4k early repayment. Now on a 10 year fix at 3%, would have saved around £8k over the 10 years in interest :(
 
Borrowed money off a relative and paid our mortgage off when the fix ended at the start of the month. Repaying them at 2% for the next couple of years, mortgage rate rise dodged, phew!
 
Got just under two years left. Hopefully it will come down a bit by then.
We are fully prepared for it being 5% and can afford the repayments. Just we would have paid mortgage within 12 years if they stayed similar.
 
Sold a load of the ISAs weve been building over the last 17 years to pay off all but £14k of our interest only offset mortgage balance.

Figure that the offset balance will be saving us 5.25% rather than not really accumulating anything as stocks and shares.

Still got about 60k in one last S&S ISA but hoping we can hold onto most if that for a "paid of your mortgage" holiday when we pay it off in 18 months.
 
200sols said:
Selling off your isas and losing that built up tax wrapper can cost you dearly in the long term though. It's not as simple as it first appears.
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You can't spend money when you're dead :) Saving money can't be the only goal and clearing a mortgage to be debt free before retirement is definitely an admirable goal.
 
Zefan said:
I wish we could do this but we're locked in to our lender unless we want to ERC with half our mortgage. It's partially why I've decided it is best to take a shorter fix, meaning we can align the products renewal times sooner and get out of being locked in to one lender.
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I took ERC on my mortgage back in August last year and managed to fix at 3% as it would have expired in March and knowing the rate was going up it wasn’t sustainable to wait.

Should have taken the ERC even early and would have got around 2.5%
 
Freakbro said:
This keeps getting higher every time it's repeated ;)

The base rate increased to 15% in 1992, for 1 day, while we crashed out of the ERM. It went back to 10% the following day. The only time I can see we've ever had a base rate of 17% was in 1979, when Thatchers incoming Govt raised them to that rate to, guess what, cure spiralling inflation!
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Yes you're right. The point was that interest rates are still relatively low. We are just so used to them being low that a small change is a big swing. Hopefully they will stop rising and drop back a little. But they could just keep rising.
 
Hades said:
Yes you're right. The point was that interest rates are still relatively low. We are just so used to them being low that a small change is a big swing. Hopefully they will stop rising and drop back a little. But they could just keep rising.
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The problem is that our economy and people’s expenditure has grown around low interest rates for a long time. Put them up too much higher and there’ll be a real problem.
 
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Hades said:
Yes you're right. The point was that interest rates are still relatively low. We are just so used to them being low that a small change is a big swing. Hopefully they will stop rising and drop back a little. But they could just keep rising.
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They arent low relative to the amount of debt around. I'm sure you've read it before but 4% today is like 20% back in the 80s.
 
17% when the average house price is what £300k? Imagine that. By that point we'd have bigger problems than mortgage rates...

What would £300k have bought you in 1980?

Just checked, the average house price was... £19,300.
 
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