Mortgage Rate Rises

Must be a worrying time coming up for many people who are recently buying property.

I am in the market for a place, but refuse to go mental, but unfortunately it seems every house that is selling now is going well past the asking price. So either there is a lot of people with plenty spare savings, a lot of people getting more pay rises that the media suggest, or people are pushing the boundaries in their finances.

Be interesting to see in the next 3-5yr time when a lot of these fixed rates end and there is a big hike in monthly payments. Hopefully people get a few more pay rises in the meantime.
 
I imagine that its the people whos mortgages are up in the next year or so that might have issues. Ours is up in 18 months and we will be fine but I really hope that interest rates go down again. Otherwise we will hope the market tanks and we can buy our next house at a cut price.
 
bainbridge said:
but I wonder if the crisis regarding the cost of living and huge energy bills would have settled down in 3 years' time.

Does anyone have an accurate crystal ball?
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Ask yourself this, do bills ever go down once they've gone up? Not really. I'd prepare for the long haul.

As someone posted in a YT video a few pages ago, you can lock in a deal with a different provider something like 6 months before your existing package finishes. Letting your fixed simply expire would be worst case scenario.
 
fez said:
I imagine that its the people whos mortgages are up in the next year or so that might have issues. Ours is up in 18 months and we will be fine but I really hope that interest rates go down again. Otherwise we will hope the market tanks and we can buy our next house at a cut price.
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Yup that’s our current dilemma. Spoke with an advisor last week about whether to pay the ~£2500 exit fees and lock in a rate now or to ride it out and look for deals in the new year when we’re within 6 months. I’ve opted for the latter as I don’t think the rates will rise enough for me to see a difference of >£2500 over 2 or even 5 years.
 
dl8860 said:
The funniest thing is that historically and on average, the people who leverage themselves the most end up being the best off. My parents in law were always very cautious with house moves and size of mortgage, and it didn't pay off because in the 35 odd years they've been homeowners, properties prices in general have soared up and up. I know you're talking about depreciating assets in your post, so it's not a retort to that, but just to say that it's easy to pour scorn on people for taking out the biggest the bank will let them, but yet that's what the majority do and it works out.
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Good for them I’m a little more reserved and not really the gambling type. I owe nothing, I earn a modest wage and live a modest life with a modest mortgage on a modest house.
Without trying to be smug I’m not going to be to badly affected by the issues many are currently facing. My mortgage has been fixed for 10 years, we only have a electricity supply and are low user with both solar and a battery. Our car is paid for, my boss pays for my fuel and my phone and we have no kids. I’m also sitting on a decent buffer in savings.

Plenty of people are not in a position I’m in maybe because of circumstance, but maybe because they wanted a lifestyle they can’t quite afford, especially now things are taking a downturn. I’ll stick with stable rather than well off. I’m from a council estate so it’s what I know.
 
We were looking at drawing down from our main home to pay for a large extension but I think we will delay just because the rates are ridiculous at the moment.

Might do the solar PV/battery work and do the rest of the extension in due course as we can at least afford that and it's a piece of work we've been wanting to do for a while.
 
Freefaller said:
We were looking at drawing down from our main home to pay for a large extension but I think we will delay just because the rates are ridiculous at the moment.

Might do the solar PV/battery work and do the rest of the extension in due course as we can at least afford that and it's a piece of work we've been wanting to do for a while.
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You must be a politician if you have a main home :D :p
 
dl8860 said:
The funniest thing is that historically and on average, the people who leverage themselves the most end up being the best off. My parents in law were always very cautious with house moves and size of mortgage, and it didn't pay off because in the 35 odd years they've been homeowners, properties prices in general have soared up and up. I know you're talking about depreciating assets in your post, so it's not a retort to that, but just to say that it's easy to pour scorn on people for taking out the biggest the bank will let them, but yet that's what the majority do and it works out.
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You're right, but I wonder if that's really just boomers you're talking about. People that bought their first homes in the eighties/nineties when they were cheap and have seen nothing but ridiculous price rises since. There's a lot of writing about how that was a once-in-a-generation thing. Although house prices are still going up, it's not going to make people as rich as it made that generation.
 
Doobedoo said:
Good for them I’m a little more reserved and not really the gambling type. I owe nothing, I earn a modest wage and live a modest life with a modest mortgage on a modest house.
Without trying to be smug I’m not going to be to badly affected by the issues many are currently facing. My mortgage has been fixed for 10 years, we only have a electricity supply and are low user with both solar and a battery. Our car is paid for, my boss pays for my fuel and my phone and we have no kids. I’m also sitting on a decent buffer in savings.

Plenty of people are not in a position I’m in maybe because of circumstance, but maybe because they wanted a lifestyle they can’t quite afford, especially now things are taking a downturn. I’ll stick with stable rather than well off. I’m from a council estate so it’s what I know.
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I wish I was a bit further on in life.
Not much left to cut that would make a significant difference.

If needs must I can cut holidays. But the easy things like subscriptions and loans? All I have is Netflix and my mortgage.
Glad no kids as that's a big cost.
 
Maccy said:
Yup that’s our current dilemma. Spoke with an advisor last week about whether to pay the ~£2500 exit fees and lock in a rate now or to ride it out and look for deals in the new year when we’re within 6 months. I’ve opted for the latter as I don’t think the rates will rise enough for me to see a difference of >£2500 over 2 or even 5 years.
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I’ve just gone through the process of remortgaging. We were a year out from the end of our fixed rate but I didn’t feel comfortable waiting.

Felt like things were stacking to go sideways. Energy price increases, interest rate increases. Fuel cost increases. Russia.

Took the hit on ~£1600 redemption penalty and locked in for another 5 years.
 
413x said:
I wish I was a bit further on in life.
Not much left to cut that would make a significant difference.

If needs must I can cut holidays. But the easy things like subscriptions and loans? All I have is Netflix and my mortgage.
Glad no kids as that's a big cost.
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To be fair neither do I. We have Sky and that’ll be going at the end of our contract but yeah we could cut the odd frivolous spend on Amazon or on alcohol. Just going to have to see how it all pans out. One things for sure the conservatives need to go, they are so out of touch with reality for the majority and they need kicking out sooner rather than later.
 
bainbridge said:
We're 2 years into a 5 year fix on our first mortgage, paying £780 per month. TBH I'm not very knowledgeable about mortgages, but it's my understanding that at the end of the 5 years if we don't look for another deal, our payments will go up to £1200, which is quite a jump.

Again, I'm no expert, but the household plan is to ensure that all other borrowing is paid off by the time our 5 years ends, to maximize our borrowing potential on a new mortgage.

I suspect, to be brutally honest, that the impact of both Brexit and Covid will dog us for the rest of this decade, but I wonder if the crisis regarding the cost of living and huge energy bills would have settled down in 3 years' time.

Does anyone have an accurate crystal ball?
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Set a calendar alarm right now for 5 months before your end date of the current mortgage. You then have a trigger to ping a company like Habito or Mojo mortgages to basically do all the work for you - locking in a new mortgage.

Nobody should be paying the fully variable rate you see as the "threat" for the 5 years running out - and you don't need to wait for it to finish to agree a new deal.

Also don't automatically jump at the overpayment -- and don't be upset if you don't manage it. Anything can happen in the next 5 years and when you come to re-mortgage you'll have hopefully taken a chunk off of it and the house may have increased in value too - automatically improving your LTV.
 
413x said:
If needs must I can cut holidays. But the easy things like subscriptions and loans? All I have is Netflix and my mortgage.
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I went without holidays for most of my 20s as saving for a house. It wasn't bad - I can relax doing something other than work. Once I got married I was forced into holidays. It worked though - extra £10k for the deposit (or more if your annual holiday budget is more than £1k/yr)
 
Harnser said:
I went without holidays for most of my 20s as saving for a house. It wasn't bad - I can relax doing something other than work. Once I got married I was forced into holidays. It worked though - extra £10k for the deposit (or more if your annual holiday budget is more than £1k/yr)
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I also had sucky holidays and few in my 20s.
Lower paid and saving.

But since covid and buying house and better salary its my main focus now.

No more PC upgrades.. They are ridiculous now. No fancy car (207 auto). So not much stuff (4 amazon orders this year).
Haven't had TV licence, sky etc ever.
Takeways are more expensive and worse quality since the inflation kicked in hard.


So all I have left now is holidays. And you'll have to drag me from that kicking and screaming!
 
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