Mortgage Rate Rises
- Thread starter glenimp617
- Start date
Soldato
From my experience, the dates are slightly off, I'd put may to September, but it is what I've seen from the job I have.
No idea why, but people move a lot more in summer. Perhaps better weather, though you'd think a house sale wouldn't be effected by that, but it seems to be the way from what I see.
Caporegime
From my total armchair, non-expert perspective...I can't imagine the rates will be lower than 5% for at least 3 years. Inflation is still higher than they want it to be, even if inflation drops down to 5% by end of the year, I don't think they will lower the rates that quickly to follow. If they did then I can imagine people would go "Buy Buy Buy!" now mentality which will do nothing to reverse the inflation and undone everything they try to do in the last 6 months, a year or 2 years at that point.
So my expectation is for the rates to even go up a little, then stay there a while, and then brought back down VERY slowly, over a few years.....It might be at 3-3.5% mortage rates eventually but that would require inflation at like 2% and I can't see that happening for....5, or even 8 years before we get there. Unless there is another financial crisis which of course they will do everything to avoid.
And without that there won't be 0-1%% interest rate from the Bank of England and won't be 1.5-2% mortgage rates. (This I can't see happening)
My 2 pence....and total guess work.
So my expectation is for the rates to even go up a little, then stay there a while, and then brought back down VERY slowly, over a few years.....It might be at 3-3.5% mortage rates eventually but that would require inflation at like 2% and I can't see that happening for....5, or even 8 years before we get there. Unless there is another financial crisis which of course they will do everything to avoid.
And without that there won't be 0-1%% interest rate from the Bank of England and won't be 1.5-2% mortgage rates. (This I can't see happening)
My 2 pence....and total guess work.
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Does feel. We are now into the 'no point waiting for rates to fall' territory.
I don't think there will be much movement for 2-3 years either way now.
Probably a bit of up, and a bit of down. But no return to sub 1pc.
Maybe not for the foreseeable. Those rates are part of what got us into this huge house price increases and thus leaves you vulnerable when you come off your sweet deal.
I don't think there will be much movement for 2-3 years either way now.
Probably a bit of up, and a bit of down. But no return to sub 1pc.
Maybe not for the foreseeable. Those rates are part of what got us into this huge house price increases and thus leaves you vulnerable when you come off your sweet deal.
Soldato
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There will be a lot of people coming off deals to huge increases if we're looking at 3 years at 5%.
This is going to hurt.
This is going to hurt.
Soldato
I believe most house purchases are at the start of the year. Then next peak in purchasing usually happens around autumn so I imagine toward the end of the year is also quite significant. A quick google confirms April to June as the main peak though. It’s interesting to see houses are still selling well and at record asking prices so the market is still functioning well.
Plus so many mortgages are just renewals.
Pre 2008 the average deal was base rate MINUS not base plus.
I don't disagree on overall rates but pre crash banks were fighting to buy debt.
Soldato
Ever increasingly over the past few years. It was already around 40% last year were cash. I wouldn’t be surprised if it was nearer 50% these days particularly with so many coming over from Hong Kong.
Historical data over the last 25yrs suggests things are a bit average just now.
History of Mortgage Interest Rates UK - Mortgageable
How have mortgage interest rates changed over time in the UK? Here we explore the historical timeline in more detail. Over the years and previous decades, mortgage interest rates have changed in accordance with the Bank of England base rate. Below we explore the trends and factors that impacted...www.mortgageable.co.uk
Overall average at 5.62% in the last 25yrs, average high of 8.87% in 1998 and average low of 3.59% in 2021. I wouldn't really see any more than a 1% change eitherway short of something drastic happening. There's further historic year BoE base rates further down in that article with this year bucking the trend considerably since the credit crunch of 08.
You cannot look at rates in isolation, as soon as you include average salary and average house prices, today’s situation is very far from ‘average’.
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Soldato
But in terms of the stuff I quoted which were dealing with the mortgage rates and the hope of them falling soon / next couple of years i.e getting closer towards what they were in the last couple of years, in the grand scale of things the average rate is where we're at. Taking into account the average house price, salary etc you're looking into affordability which wasn't being discussed.
Still not budging on rates then and BoE looking to raise further? Gotta love the good old BoE.
I'm still looking to go for a 5 year fix at 3.95% that I got a month ago, I really don't know why 5 years but surely this is going to last over 3 years ?
I'm still looking to go for a 5 year fix at 3.95% that I got a month ago, I really don't know why 5 years but surely this is going to last over 3 years ?
Oh absolutely, you’re factually spot on. I’m just not sure how useful looking at rates in isolation really is.
Sorry, I didn’t meant it to sound as though I was disagreeing with you in any way, i’m not at all, you’re quite correct.
I think I’ve just heard one too many person this weekend bleat on about how rates were higher in their day, with absolutely no accounting for the rest of the variables.
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Soldato
I'd be asking yourself. At the end of 3 or 5yrs and the rates go up 1. Can you still afford your repayments 2. Will you reduce your mortgage enough to fall into a lower LTV rate. 3. in your line of work are payrises regular per year / 2 years? 4. Do you have any wiggle room should something unexpected happen? 5. Can you still afford to live!
Go with what you're comfortable with. Hope for the best but plan for the worst!
Not to worry.
I wholeheartedly agree all aspects need to be considered which is what I did when I bought my current house. Nothing fancy but I'm comfortable. Overpaid when I could but kept within my means. Any future move I'll take the same attitude but in terms of the largest purchase in my life I'm fairly risk adverse.
Soldato
In addition to this. If you go with 5 years, do you see yourself moving house before then.
You can port; but then you can only go up - and you have two mortgages. I believe that means you can only stick with your current provider.
Soldato
Yes.
Although many lenders will waive repayment fees if your taking a product that is comparative (ie they lock in similar repayment amounts)
Its often better than ending up with multiple mortgages, and having to work on more fixes, or more deals.
Multiple does open up being able to diversify though, say shorter and longer term deals, or say a fixed for part and a tracker for the rest.
I need to go 200iq on my renewal. I have ~£360k ending in March and ~£330k ending in August. RIP