Mortgage Rate Rises

fez said:
Save with what? A huge number of people will have less than no money at this rate.




Welcome to capitalism. You make massive profits when times are good and you make sure that you push the pain onto someone else when times are bad. Couldn't possibly make less money when huge swathes of the population are borderline broke. That would be decidedly anti-capitalist.
Click to expand...

There are a huge number of people who this has zero affect on. A huge number. And a large proportion of those can save who might not have before.

I'm a target for this, but I'm set on spending. But I have to admit. If an ISA hit 7pc for a 3 year fix.. I would be tempted at that level. Not tempted enough to abandon my plans but the temptation would be there.

Not at 5pc though.


Edit.
Also, if you have a long fix, a 5-6-7 pc savings rate is a great money dump until your mortgage renews
 
Last edited:
The treasury committee at the moment seems pointless.

They're talking like everything is "fine" and discussing averages of 4.5% but that's not the case for new mortgages today etc.

And then they don't seem to be talking about the impact that will have further down the line.

We've got our mortgage offer in at just over 5% for a 5 year fix, so it's gone up £250 a month which is what I've been expecting pretty much since the moment increases started
 
Last edited:
sigma said:
Hopefully by 25 the rates will drop a bit

At least you have 2 years to plan and build a buffer
Click to expand...

that's what I'm hoping for, currently we're doing just that and building up a buffer which will hopefully allow us to at least lower the LTV for better deals come 25, it's hard to predict what will happen. Lucky I guess is that our area is in high demand and prices haven't really gone down that much - I've seen a drop of 0.1% etc average.

413x said:
What rate was it?

Brutal this m horrible situation. With only two years don't even have much mental breathing space.

Guess all can do is plan best you can for renewal.
Click to expand...

no, if only we knew we'd have locked in for 5 or 10 years but so would have everyone else.

rate is currently at 1.99% and I'd be extremely shocked if we see 4% or so by the time we need to renew.
 
grudas said:
that's what I'm hoping for, currently we're doing just that and building up a buffer which will hopefully allow us to at least lower the LTV for better deals come 25, it's hard to predict what will happen. Lucky I guess is that our area is in high demand and prices haven't really gone down that much - I've seen a drop of 0.1% etc average.



no, if only we knew we'd have locked in for 5 or 10 years but so would have everyone else.

rate is currently at 1.99% and I'd be extremely shocked if we see 4% or so by the time we need to renew.
Click to expand...

You must have got that mortgage at same time as myself? Early 2022?

I don't think anyone knows. Certainly hope we would be on the downward trend by then.



Have a friend who due to relationship break down has to buy a new House, deal with porting 2 mortgages, sell the old house.


All the time she's watching these rates go up. By time she's sorted (this is very recent) she's probably going to be doing this when average mortgages are hitting 7pc
 
Last edited:
413x said:
You must have got that mortgage at same time as myself? Early 2022?

I don't think anyone knows. Certainly hope we would be on the downward trend by then.



Have a friend who due to relationship break down has to buy a new House, deal with porting 2 mortgages, sell the old house.


All the time she's watching these rates go up. By time she's sorted (this is very recent) she's probably going to be doing this when average mortgages are hitting 7pc
Click to expand...

yeah, we completed in June.


I do hope so but we'll see. Its not easy, my mate and his other half were ready to buy and now things are all over the place, do you wait? do you buy now and hope it drops?!

its literally impossible to predict. Stressful but I think I'll park this until '25 and continue saving on the side for a chunk/overpayment come renewal time..
 
I finally got round to ringing up to get the settlement figure in order to pay mine off this morning.
Been paying £9 the last couple months after switching to keep term the same but adjust payments option a few months ago.

Just need to wait for the letter confirming account closed and then I guess maybe a bottle of bubbles.

I keep finding myself on rightmove after the talk last week of what could you get.

I am trying to stick to the plan, if we move its going to be a cash transaction.
 
I'd bet we still see rates increasing. HSBC recently (like yesterday) put up the rates on all their products by 0.5% which I think is them jumping the gun so that when BoE rates increase again then can pretend they've not passed the whole cost on.

I wouldn't be surprised to see 6% BoE this year. Given some of the mortgage products out there that is a potential rate of 7.5%!

BoE is belligerent in their one trick pony to fix inflation and until inflation is less than the base rate I fear they keep raising. I do believe though once they've absolutely fubar'd the economy they'll get a public roasting and rates will come down by the end of next year. I expect 4.5-5% will be the norm for 2025.
 
413x said:
There are a huge number of people who this has zero affect on. A huge number. And a large proportion of those can save who might not have before.
Click to expand...

At the moment. Thats the key thing. If these rates are still 6 percent in a years time there will have been 2 years of high interest rates.

From a brief dig, about 350,000 people remortgage every year. I believe thats remortgages only and not new mortgages. So over 2 years of high rates you will have 700,000 people on very high rates. Add in people who are first time buyers or taking on new mortgages and it will be many more.

Plenty of landlords will be putting up their prices as well which has the same effect of those who don't own houses ie. much less disposable income.
 
fez said:
At the moment. Thats the key thing. If these rates are still 6 percent in a years time there will have been 2 years of high interest rates.

From a brief dig, about 350,000 people remortgage every year. I believe thats remortgages only and not new mortgages. So over 2 years of high rates you will have 700,000 people on very high rates. Add in people who are first time buyers or taking on new mortgages and it will be many more.

Plenty of landlords will be putting up their prices as well which has the same effect of those who don't own houses ie. much less disposable income.
Click to expand...

28% last I saw had a mortgage.
19% privately rented.

So if you add them together just under half are likely impacted.

But bear in mind the length of mortgage will be say 0-30 years.
I would say the first 10 years for most are the difficult time, you will get outliers each way, but I doubt may people with less than 10 years left are going to have any issues.

If your correct with 350k bear in mind
The households are about 24.5 million (properties).
So 350k is 1.42%

If your in that 1.42% then its gonna suck. But as said originally there really is a huge number of people this will have zero effect on.
 
fez said:
Plenty of landlords will be putting up their prices as well which has the same effect of those who don't own houses ie. much less disposable income.
Click to expand...

I suspect landlords who are full cash owners will also increase rent as the general market rates go up, even if no impact at all from mortgages.
 
Yeah landlords fall into a number of buckets.
You have market makers, who push the edge, how far can we push the rental price up
You have market takers, who just take the recommendation of price rises from an agent
You have, casual landlords, who value stability of good tenants above all
etc.

I actually know a local landlord to me, (he now owns a lot less properties) but he said he was always in it for the capital gain as opposed to worrying too much about the rental income.
Since the tax changes a couple of years ago I think more would be this way inclined.
Which is fine as long as they really are passing all the costs on and not subsidising, due to for example a big bump in their borrowing costs.
 
Mercenary Keyboard Warrior said:
If your correct with 350k bear in mind
The households are about 24.5 million (properties).
So 350k is 1.42%

If your in that 1.42% then its gonna suck. But as said originally there really is a huge number of people this will have zero effect on.
Click to expand...

Thats just remortgages. And thats every year. My partner has a BTL mortgage that is a tracker mortgage so it just runs. How many landlords are out there that will be raising prices despite not remortgaging either because they can or because their tracker rate has gone through the roof.

We will see the real effect in the coming years but I wouldn't be surprised to see 5-10% or more of households cutting back massively on their spending because so much of it is going on rent/mortgages. Thats a lot of money.

HungryHippos said:
I suspect landlords who are full cash owners will also increase rent as the general market rates go up, even if no impact at all from mortgages.
Click to expand...

Plenty will for sure. Same as so many businesses raising prices by 15% when their costs have gone up 10%. Why wouldn't you? Free money and a good excuse.
 
fez said:
Thats just remortgages. And thats every year. My partner has a BTL mortgage that is a tracker mortgage so it just runs. How many landlords are out there that will be raising prices despite not remortgaging either because they can or because their tracker rate has gone through the roof.

We will see the real effect in the coming years but I wouldn't be surprised to see 5-10% or more of households cutting back massively on their spending because so much of it is going on rent/mortgages. Thats a lot of money.



Plenty will for sure. Same as so many businesses raising prices by 15% when their costs have gone up 10%. Why wouldn't you? Free money and a good excuse.
Click to expand...

Thing is landlords are not directly connected between rates and rental income.
Rental income was going up for many anyway even though interest on their properties was static.

Some will have issues, many won't.
Those with issues may well try to pass it all on, whether they can or not who knows.

Yeah I get its every year, but again its still a very small % overall for the UK. Especially right now.

Looking though they say its about 350k fixed rates complete per quarter.
Although it falls off over time.

www.uswitch.com

UK Remortgage Statistics 2023 - UK Remortgaging Facts and Stats Report

The latest UK remortgage statistics for 2023, covering UK remortgage market figures, UK remortgage interest rate statistics, associated remortgage costs for 2023, and more.
www.uswitch.com www.uswitch.com
 
Secondary impact will be in building industry - many more people will remortgage to pay for buidling work. The industry has done pretty well out of the property boom with people having access to easy equity in their house.
 
One thing that puzzles me is that in the US everyone is on these massive 30 year mortgages all at fixed rates. The US has raised rates quicker and inflation is much better under control.

So is penalising all these mortgage holders really a significant factor in reducing inflation? Seems to me that really it is the cost of borrowing for business is much more impactful at reducing inflation. Basically causing a recession
 
neocon said:
What do you think of what these guys are saying? Don't sound very good to me.

www.youtube.com

Mortgage Payer Misery. No Bailout. What you must do NOW.

It's hard to accept that something you didn't want to happen is happening. But that's exactly what's happening now. (Hear the audio podcast of this livestre...
www.youtube.com www.youtube.com
Click to expand...

Hey, just watch this 1 hour video and lmk what you think about these non-specific questions, thanks! :D
 
You must log in or register to reply here.
Back
Top Bottom