Mortgage Rate Rises

Yea, if they hadn't raised rates our currency would have weakened on the international markets causing more imported inflation.

It's a bit of a no win situation trying to control spiralling inflation, everything you do (or don't do) is going to cause pain somewhere.

And though Danny Blanchflower is a decent enough economist, he is an ultra dove and a one trick pony when it comes to advocating interest rate cuts.
 
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Freakbro said:
Yea, if they hadn't raised rates our currency would have weakened on the international markets causing more imported inflation.

It's a bit of a no win situation trying to control spiralling inflation, everything you do (or don't do) is going to cause pain somewhere.
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The comment about "you have to accept being poorer" was bad taste. But it is true.

And its a huge shift for so many of us. It seems impossible that over time we don't just "improve" and in very recent past that has been the case. But whole civilisations fail that were, at thier peak, really successful.

Us humans seem to really struggle with the concept that the future isn't always better.

I don't see that decline ending. I do think AI will change things dramatically. But I'm 30:70 on for better:for worse
 
I'm just about to apply for a mortgage (don't have one currently). What are people thinking regarding term length right now?

Nationwide are offering me two products:
2 year fix: 4.79%, £999 fee
5 year fix: 4.54%, no fee

My partner can't get on a mortgage right now (or at least for a rate that isn't nearly double digits) but the shorter term means we could apply jointly and make sure she has an equal footing sooner than later. The risk is obviously rates being even more daft in 2 years time, or paying ~7% after the fixed term ends.

I'm leaning towards 2 years, bad move?
 
Dup said:
I'm just about to apply for a mortgage (don't have one currently). What are people thinking regarding term length right now?

Nationwide are offering me two products:
2 year fix: 4.79%, £999 fee
5 year fix: 4.54%, no fee

My partner can't get on a mortgage right now (or at least for a rate that isn't nearly double digits) but the shorter term means we could apply jointly and make sure she has an equal footing sooner than later. The risk is obviously rates being even more daft in 2 years time, or paying ~7% after the fixed term ends.

I'm leaning towards 2 years, bad move?
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The fact that the interest rate is lower on the 5yr fix shows that they forecast rates to go down.

I think you're making the right move based on those two products and your situation and my personal risk appetite.
 
Hyburnate said:
The fact that the interest rate is lower on the 5yr fix shows that they forecast rates to go down.

I think you're making the right move based on those two products and your situation and my personal risk appetite.
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I'd tentatively agree.

But I'd also base that in loan size.

If its big  small. I'd probably take the longer term. Remortgage fees can really eat into percentage point savings.

If like me you have a huge mortgage, I'd be focused on forecasting the rate (ie guessing!)




Edit. Lol. I meant it is a small loan I'd take the longer one! As rates are projected to fall.
 
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Dup said:
I'm just about to apply for a mortgage (don't have one currently). What are people thinking regarding term length right now?

Nationwide are offering me two products:
2 year fix: 4.79%, £999 fee
5 year fix: 4.54%, no fee

My partner can't get on a mortgage right now (or at least for a rate that isn't nearly double digits) but the shorter term means we could apply jointly and make sure she has an equal footing sooner than later. The risk is obviously rates being even more daft in 2 years time, or paying ~7% after the fixed term ends.

I'm leaning towards 2 years, bad move?
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My view is always that the higher the percentage of your income is going on your mortgage the more you should lean for certainty.
And certainty comes with a longer fix.

You should have course also consider other factors like how sound is the relationship, could you need to move etc which would pull you back to a shorter term.
 
413x said:
If its big. I'd probably take the longer term. Remortgage fees can really eat into percentage point
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But if it is a large mortgage and in a couple of years time the rates are - 2% lower that remortgage fee is gonna look like peanuts in comparison.
Depends what you class as a large mortgage
 
Dup said:
I'm just about to apply for a mortgage (don't have one currently). What are people thinking regarding term length right now?

Nationwide are offering me two products:
2 year fix: 4.79%, £999 fee
5 year fix: 4.54%, no fee

My partner can't get on a mortgage right now (or at least for a rate that isn't nearly double digits) but the shorter term means we could apply jointly and make sure she has an equal footing sooner than later. The risk is obviously rates being even more daft in 2 years time, or paying ~7% after the fixed term ends.

I'm leaning towards 2 years, bad move?
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What is the cost difference? What's your LTV?
 
Thanks guys, useful insight. LTV is ~87% with the value being under 300k, monthly difference is £150 not counting the extra fee cost, typical northern pricing :D

The fee vs no fee is also interesting and supports your logic about forecasting as they're trying to make that more attractive. My mortgage advisor agrees, stating usually the longer term is the higher % so they're likely forecasting a reduction.

Relationship is sound. She's just feeling the consequences of historical financial decisions that forced her into an IVA. That's been settled however it's just under 3 years ago and there's no gaurantee those rate offers will improve (we had only one offer jointly at over 8% from Bristol bank or some such). We've got 3 kids between us, have been together 6 years and hate each other enough to call this as good as getting married :D While we're happy, we'd both feel better being on an equal footing. She's worked hard, has a career and wants to be a part of it which I respect.

We plan to overpay a little and we're comfortable and otherwise debt free. Properties are few & far between here and we cannot wait forever, we've been waiting months to find anything remotely suitable. We may plan to move in 7 or so years for a better high school choice.

I think whilst we lose a little pocket money in the short term, the 2 years makes more sense from a relationship point-of-view. It's still only 2.25x our current rent which is quite cheap as it is (becasue we live in an absolute hole!).
 
Dup said:
I'm just about to apply for a mortgage (don't have one currently). What are people thinking regarding term length right now?

Nationwide are offering me two products:
2 year fix: 4.79%, £999 fee
5 year fix: 4.54%, no fee

My partner can't get on a mortgage right now (or at least for a rate that isn't nearly double digits) but the shorter term means we could apply jointly and make sure she has an equal footing sooner than later. The risk is obviously rates being even more daft in 2 years time, or paying ~7% after the fixed term ends.

I'm leaning towards 2 years, bad move?
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Have a look at Clydesdale, they’re offering 4.23% fixed for 2 years or 4.14% over 5.

Fix for 2 years and if rates have dropped significantly in 2025 then you can fix longer for a better rate.
 
Captain said:
Have a look at Clydesdale, they’re offering 4.23% fixed for 2 years or 4.14% over 5.

Fix for 2 years and if rates have dropped significantly in 2025 then you can fix longer for a better rate.
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Do you think they will drop? I thought they're on the way up if anything.

4.34% for a 5 year fixed with Nationwide currently.
If I get a decision in principle, what are the chances of the (any bank) bank pulling out of the deal say in 5 months time if the rates go up?
 
Guest2 said:
Do you think they will drop? I thought they're on the way up if anything.

4.34% for a 5 year fixed with Nationwide currently.
If I get a decision in principle, what are the chances of the (any bank) bank pulling out of the deal say in 5 months time if the rates go up?
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They’ve dropped a bit since I started looking at renewing in early Feb, was getting quotes anywhere from 4.6-4.8%, then noticed Clydesdale were offering 4.23%.

I think by 2025 we’ll be back in the 3% range.

If you’ve got it in principle then they should honour the rate you’ve been given, also if it drops below what you have agreed on, they’ll lower it to that rate also before you start your new mortgage.
 
Captain said:
They’ve dropped a bit since I started looking at renewing in early Feb, was getting quotes anywhere from 4.6-4.8%, then noticed Clydesdale were offering 4.23%.

I think by 2025 we’ll be back in the 3% range.

If you’ve got it in principle then they should honour the rate you’ve been given, also if it drops below what you have agreed on, they’ll lower it to that rate also before you start your new mortgage.
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Nice, didnt know they would lower it if the rate drops. If thats the case its a no brainer getting a DIP 6 months before
 
Captain said:
I think by 2025 we’ll be back in the 3% range.
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that is wishful thinking. no chance long term mortgage rate will be around 3% - 4%+ is the long term point. similar to rates people are talking here. interest rate wont be falling to 2.5% for a LONG WHILE.

banks (not BoE or other central banks, but retail banks) would have had a taste of the margin they got on the swap rate. they wouldnt be keen on a race to the cheapest. the market isnt competitive atm and certainly wont be for a while. I am certainly not prepared for 2025 3% for my main mortagage anyway.
 
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unwashed potato! said:
Where does this increased money from higher rares go? Hearing on the radio today some guy has gone from £300 per month interest to £1200 per month.

Who's enjoying that?
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Hopefully a chunk to savers whose interest on deposits have risen from 0.1% to 3-4%. No doubt that the banks take a cut.
 
Where does all these mortgage rate increased leave renters? Surely a landlord having to pay a wacking interest rate will offset that by increasing rent, which (some) people wont be able to afford

Good job I decided to buy a few years ago is all I can say
 
Guest2 said:
Where does all these mortgage rate increased leave renters? Surely a landlord having to pay a wacking interest rate will offset that by increasing rent, which (some) people wont be able to afford

Good job I decided to buy a few years ago is all I can say
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Rents are rocketing partly for this exact reason, it is also leading to reduced supply as some landlords sell up as the margins are suddenly not worth the hassle!
 
Guest2 said:
Where does all these mortgage rate increased leave renters? Surely a landlord having to pay a wacking interest rate will offset that by increasing rent, which (some) people wont be able to afford

Good job I decided to buy a few years ago is all I can say
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Remember that it is likely that most landlords have already paid off many years of the properties mortgage, so even with rates rising, it might only translate to £100 more per month. The worst will be landlords that have just taken a property with very little deposit, so have a huge mortgage still to go, at high rates due to being a buy to let. No idea what those landlords do. Accept 5 years that they will he paying into more of the mortgage then they wanted to as rent won't cover it all? Increase rent?
 
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