Mortgage Rate Rises

[Chris344]

House prices expected to increase by end of 2028 by 21.6% on average

 

[413x]

House prices expected to increase by end of 2028 by 21.6% on average

No way?
That must be pricing in some substantial rate decreases!

I've stocked up on housebuilder shares as prices can't stay repressed forever.

Edit.
Not so crazy. I read 2028 as 2025

 

[b0rn2sk8]

It’s basically a 0.5% monthly rise for the next 43 months. We’ll within the scope of what’s possible.

 

[jaybee]

When you re-mortgage how/when does the current value of the house become agreed? So say your 5 year fix comes to an end, and you bought the house for 400K, but you now believe it's worth say 450K, this will have a potentially big affect on LTV.

I remember when we bought, HSBC just did a desktop valuation due to COVID, and I don't recall ever having an actual value assigned. It was more just that they agreed that yes, the house is worth at least what you will pay for it therefore AIP is granted.

How does re-mortgaging work then? Do you just apply for the band you believe to be in, say 60% band, and then they just agree or don't agree so again you never find what they perceive to be the value?

 

[b0rn2sk8]

They’ll likely do a desktop valuation when you apply for your re-mortgage and they should communicate that to you.

You’ll benefit from the increase in value on the LTV calculation.

 

[EvilRob]

They’ll likely do a desktop valuation when you apply for your re-mortgage and they should communicate that to you.

You’ll benefit from the increase in value on the LTV calculation.

With same lender yes.
With a different lender you enter your expected valuation during application and the lender will decide whether to do a desktop valuation or a physical inspection.

 

[200sols]

No way?

The key thing to remember is.... nobody knows what will happen.

 

[Foghorn Leghorn]

I feel like explaining this concept to some people is like the regular savers being half the headline rate

I missed that, I'm guessing there was some confusion about how to quickly calculate the interest earned over the year if the full value is saved each month?

 

[Sythe79]

They’ll likely do a desktop valuation when you apply for your re-mortgage and they should communicate that to you.

You’ll benefit from the increase in value on the LTV calculation.

-Ours has just updated periodically on the mortgage app. It's pretty much consistently been about 20% lower than Zooplas valuation. Which is fair enough.

 

[dlockers]

I missed that, I'm guessing there was some confusion about how to quickly calculate the interest earned over the year if the full value is saved each month?

Kind of the opposite. People who couldn't see past the maths of calculating the interest over a year. Even if the max they could save was equal to the max pay-in.

 

[danlightbulb]

Kind of the opposite. People who couldn't see past the maths of calculating the interest over a year. Even if the max they could save was equal to the max pay-in.

Dont take the pee. Even MSE explains it this way, the maths works out whichever way you do it.

Regular savings accounts

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You'll earn what looks like half the headline interest rate
On regular savings, the interest you get will be about half the interest rate of the account. But don't worry, it's not a con – it's just how the maths works out. It's all down to the money being saved monthly rather than in one lump sum.

The issue was actually more about the differential between bonds and a bog standard instant access savings. I thought the differential was greater than it was.

 

[HungryHippos]

Savings thread elsewhere let's not chuck this one off topic again!

 

[Bald-Eagle22]

BOE stays the same at 5.25% .

 

[200sols]

7:2 split this time. One more jumping on the rate cut side.

 

[Kill_Phil]

BoE are clearly waiting for the US to jump first

 

[TNA]

BoE are clearly waiting for the US to jump first

Yep. Unless there is a huge improvement on inflation in our numbers they will keep tracking the US.

 

[200sols]

Not sure how you guys are taking that view. Looks to me more likely after today the BoE will cut before the fed now.

 

[TNA]

Not sure how you guys are taking that view. Looks to me more likely after today the BoE will cut before the fed now.

Yeah. Maybe by 0.25. Doubt they would go down much more unless the US does first. At least from my crude understanding of things.

 

[200sols]

Yeah. Maybe by 0.25. Doubt they would go down much more unless the US does first. At least from my crude understanding of things.

Doubt much more, but August looks likely for BoE now. As bailey said in the press conference after “There’s no law that the Fed must move first,”.

Difference is US inflation has been ticking higher, UK is cratering and set to continue in the months ahead. The biggest reason to not cut too much would be currency related.

 

[BUDFORCE]

I agree with their decision actually.

We've had the blunt trauma, things are actually slowly starting to stabilise, at least in the mortgage world as per thread subject.

We are actually really busy at the moment with mortgage applications, busiest it's been for a while, maybe 18 months.

The rates now are not particularly high, just felt high against nothing and the pain of the sharp increase.

The wider economy issues don't help, but it's far from all being a direct result of interest rates.