Mortgage Rate Rises
- Thread starter glenimp617
- Start date
Yes, this is a thread about mortgage rates guys...
Associate
so my financial advisor is telling me to sit still on a new house buy with the unexpected rise in inflation likely to pause interest rates reductions even though the homes i'm interested in are still selling now 
noted some of the banks have already gone back on the minus 4% rate offers in the last few days.
noted some of the banks have already gone back on the minus 4% rate offers in the last few days.
Soldato
I am not going to disagree in principle, but people get fixated in things that at country level make no real different
Talk of chartered jets etc is basically not even a rounding error, its such a tiny tiny amount compared to the costs of the country that its nothing more than a political oversight
You could scrap the lot and see no difference at all to the costs of the country unless you stopped looking at billions and started looking at tens of thousands
We SHOULD treat council leaders and CEOs etc as if they are running significant companies. You want good people, the risks of not employing good people are they mess up more and it actully costs you more from employing nice but dim Tim as he is cheap.
There is accountability, the NAO.
Edit, sorry saw the back on topic after I had typed!
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Soldato
You can still apply for a mortgage, depending on the lender the offer will be available for a set time period.so my financial advisor is telling me to sit still on a new house buy with the unexpected rise in inflation likely to pause interest rates reductions even though the homes i'm interested in are still selling now
noted some of the banks have already gone back on the minus 4% rate offers in the last few days.
If the rate drops just apply for another.. if not you got a backup.
Is the consensus that Nationwide are a bit behind the curve? I'm not due for renewal until mid next year when I'll move to a longer term (never say forever in this house) spot but checking and at about 62'63% LTV I'm seeing renewal quotes of 4.4% ish from them?
They were super quick initially but seem to have dug their heals in versus HSBC/FD.
The comparison sites seem to be consistently under calling Nationwide. Right now they say I can get 4.87 or something - but Nationwide's own comparison site says 4.97.
Aren't a lot of deals on comparison sites via brokers?
Ah might explain it to some extent. I can't use a broker because I have two parts
.retail borrowing rate has been kepted at record low for over a decade - not just mortages and this has caused massive amount of debt laddened asset appreciation in all the world's large economies.
the banks love the status quo, it wont be long before they are competing for "consumer debt" again. if there is no BoE requirement on affordability, we would still be seeing 0% mortagage given out wiht £5k product fee to entice those who cant afford it.
in the news is that rate war gonna simmer down. but still constantly getting email from L&C new leading rate is now 3.85% and something in BBC saying one of the big bank is now offering 4.1% @ 75LTV
the market will do its thing tbh.
also overall retail figure is down massively. whislt inflation ticked up 0.1% BoE would have one hand sign of a sever recession...i do reckon they will hold rate at the next meeting unless there are further bad news coming out of the wider economy such as jobless figures.
then, the inflation figure might take a dive and thats when they cut rate. it is unsustainable to keep base rate significantly higher than inflation. and worst of it all, savers do get anywhere near the base rate while borrowers pay over the base rate. the middle man is laughing...
the banks love the status quo, it wont be long before they are competing for "consumer debt" again. if there is no BoE requirement on affordability, we would still be seeing 0% mortagage given out wiht £5k product fee to entice those who cant afford it.
in the news is that rate war gonna simmer down. but still constantly getting email from L&C new leading rate is now 3.85% and something in BBC saying one of the big bank is now offering 4.1% @ 75LTV
the market will do its thing tbh.
also overall retail figure is down massively. whislt inflation ticked up 0.1% BoE would have one hand sign of a sever recession...i do reckon they will hold rate at the next meeting unless there are further bad news coming out of the wider economy such as jobless figures.
then, the inflation figure might take a dive and thats when they cut rate. it is unsustainable to keep base rate significantly higher than inflation. and worst of it all, savers do get anywhere near the base rate while borrowers pay over the base rate. the middle man is laughing...
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My friend moved in November/December and had to get a new mortgage due to divorce. He's paying 5% for 5 years locked in just as these 3.89% deals are hitting this week, barely a month after he started paying. That's harsh. Highest rates since 2008 pretty much he's locked on to?
This sounds like a case where getting a new mortgage and paying off with ERC will be net positive quite soon
This. He won't be able to get out without paying the ERC which will be usually be extortionate if just a few months into the deal
Caporegime
Well just checkout on a YBS 5 year fix, the ERC is 5% in the first year. So he would have to pay them £12.5k. Lets say it cost him £1000 to get the mortgage, valuation etc.
He wants to get another 5 year mortgage so he pays another £1000 to get the new mortgage. Thats £14.5k he would have to save over the 5 years to break even. Thats roughly £240/month he would need to save.
Bugger it, I put it into a basic calculator and @4% your monthly would be £1320 and at 5% it would be £1461 so £141. If the ERC was 5% he would be ~£100 worse off every month.
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Soldato
Some mortages do have cool down periods, they may still be in theirs. In which case the mortage can be null.
But if they started paying already, it's very unlikely there's normally no payment within the first month unless it was a renewl.
I suppose it's a slight side point but why did he do that? Nobody is forcing anyone to fix for 5 years?
Also if he's currently at 5% I suspect the 3.89% mortgages which are for under 60% LTV and the best borrowers wouldn't be available to him anyway.
But it sounds like he just made a bad call on the term.. that said 1% isn't THAT much, he's likely best letting it run whilst the delta to the best deal isn't that high whilst the ERC will be painful, there'll be a crossover at some point.
Bearing in mind this isn't costing him "more" he can afford it which is how he's got it, it's just not the "best" deal.. Reminds me of a million years ago when I used to sell phones and people would tell me they wanted to change because their phone was getting a bit heavy. I was dying to tell them it hadn't gained weight.
Anyway, even on my £450k mortgage 1 whole percentage point is only £200 a month. When we get into fretting about less than that it's really going to drive you mad for nothing.
Well he blames his broker who advised him to do 5 years! But yeah, not a good decision. I never like to diss anyone's decisions as we all do the best we can at the time. It wasn't clear back then that they would necessarily come down as quick/hard as they have I guess.