Average mortgage rate rises above 6% for five-year fixed deals
Mortgage rates have been rising consistently since May, as lenders are pricing in expected Bank of England interest rate rises.
Mortgage Rate Rises
- Thread starter glenimp617
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Average mortgage rate rises above 6% for five-year fixed deals
Mortgage rates have been rising consistently since May, as lenders are pricing in expected Bank of England interest rate rises.news.sky.com
They'll go above 7% by the end of the year.
Caporegime
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Average mortgage rate rises above 6% for five-year fixed deals
Mortgage rates have been rising consistently since May, as lenders are pricing in expected Bank of England interest rate rises.
It's going to get really interesting when enough people come off fixes to be left with no disposable income for years.....
This is why people are saying that you cannot simply keep raising rates because you have broadly two sets of people right now. Those who have had to re-mortgage already and have no money and those that will have to remortgage and have money now but won't within the next 2-3 years. You overshoot and you will find you have the opposite issue to now.
Imagine everyone is on a 5%+ mortgage for 2-5 years. They have no spare money and the economy goes into a horrible recession, millions of jobs are lost. People can't pay their mortgages and those that can are still not spending. Lowering interest rates won't fix that.
They need to have some vague level of forward thinking or they will just push the needle far too far in the other direction with worse consequences.
It really seems like all bets are off for how long this is going to go on for. And it will be a big hit to the economy.
Literally no idea or predictions from myself now. Longer 5pc plus rates stick around the harder it's going to be for the highly mortgaged.
Suspect luxury, traditionally financed things like new cars will take a big hit. Thus electric car uptake will suffer.
Obviously house building will slow which will probably prop up prude somewhat.
Probably big differences across the country and even at street level as desirable house hold up.
I don't really know if this will affect enough people in 5 years to really cripple the already stagnant UK. Or if in reality there are enough people not affected for it to be minor.
But at an individual level it's going to be very very chaotic. With some families fine a year ago barely able to make ends meet. While cash rich just get richer and richer even faster.
I guess that's the only thing for sure. The wealth divide will get an acceleration.
Yeah. It's probably OK to fix for 5 until recently. But these rates rises encourage people to fix for longer if anything. You may well be paying 6pc while variable hits 3.
But there's no clear signals that the drop will come anytime soon. I'd love to be sure rates won't hit 7pc. But it was only months ago most, including me, didn't see anything above 5
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the base rate wouldn't be far off that figure by the end of the year imo
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Thing is that these interest rates are not really high by historical norms, which is what plenty of us have said for years, to be greeted with "but bust of they go up" as a defence.
Interest rates in effect being very low have seen savers subsidising borrowers. I would say current rates are maybe a smidge too high, but are far better reflecting the risks than when they are at basically zero.
Whilst the short term impact of rates on savers is to get them to lower spending and save over time it will slowly encourage them to spend as well.
I get that people with large mortgages are suffering, but they are not the only borrowers.
Ideally I would like to see UK rates closer to US rates over a longer period. We have historically tracked a bit higher.
Interest rates in effect being very low have seen savers subsidising borrowers. I would say current rates are maybe a smidge too high, but are far better reflecting the risks than when they are at basically zero.
Whilst the short term impact of rates on savers is to get them to lower spending and save over time it will slowly encourage them to spend as well.
I get that people with large mortgages are suffering, but they are not the only borrowers.
Ideally I would like to see UK rates closer to US rates over a longer period. We have historically tracked a bit higher.
Financed luxury, yea probably. But oddly small luxury items can see the 'lipstick effect' in recessions where people actually uptick their spending on these things, probably to make themselves feel a bit better in the bad times.
Yeah. Rather than new car at 500ppm when it was 300ppm before a new t shirt or something.
Christmas will probably take a big hit if you're on the edge. Maybe it will(hopefully) decommercialise Christmas a bit long term
Wonder about phone savings too. That's an easy saver.
Just keep your phone 4 years rather than 2. Probably saves 25-40ppm for many who get the latest every renewal.
Basically where you have something 90 percent as good as the latest thing. But that can save you 100s a year.
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It seems very clear now that 0 rates are bad long term. And it was completely unnecessary to carry it on so long. It's encouraged, normalised and rewarded excessive borrowing for everyone, including corps and governments
I come off my 1.93 fixed in December, but I am having a call with my advisor today as you can secure a product 6 months in advance. So I should get the best rate today and if it drops come December we can always go with that. Otherwise the rate is still secured.
This is a fairly meaningless metric when house prices just keep going up and up at such absurd rates.
What if the average house price reached £500,000 pounds and the average mortgage 300,000 but with 10% interest rates (like we have seen before)? That's about £2500 a month just in interest a year which is a fair bit more than the average take home pay!!
The fact is, salaries in this country are in no way acceptable for the current rise in house prices and now interest rates.
It is wholly unsustainable.
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The BoE are ***** morons. They should have been raising them slowly for a while. Not just bump them up 5% in a year.
Caporegime
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Been doing 4 year cycle for phone for a decade, iphone 1 to iphone 4 (yes this is 3 years), to iphone 6 then XR and 14pro. Get phone outright, find cheapest sim contract for needs. The first 2 years you pay like everyone else really for a new phone but the last 2 years you are getting it cheap.
You wonder what these lot do to justify thier salaries.
I mean they must do more, much more. Because they are just in reaction mode m that anyone with some sense could do.