Mortgage Rate Rises

[Will Gill]

What year did they buy it?

1988 ish

I think about the future and what we may inherit, but doesn't it all mostly just go on care for your parents when they reach the end years? I suppose if they are able to stay in their own home right up until the end we may inherit but, I don't make any plans based on inheriting anything. I expect and plan for zero. Anything we would get, we would probably be almost retired ourselves and would pass down to our kids anyway.

oh same, I never budgeted or expected a thing, so my previous monthly payments were well within my means, the rate increase whilst a pain in the bum is entirely manageable, in both pre and post lump sum calculations

Oddly my dad is now in a care home, it costs a small fortune at £1200 a week but he worked hard all his life and deserves to see out his days in comfort, with dignity and staring out over the sea where he grew up.

Should it turn out he/they eat through their savings and need money from my brother and I, needless to say, it would be immediately forthcoming

 

[jaybee]

1988 ish


oh same, I never budgeted or expected a thing, so my previous monthly payments were well within my means, the rate increase whilst a pain in the bum is entirely manageable, in both pre and post lump sum calculations

Oddly my dad is now in a care home, it costs a small fortune at £1200 a week but he worked hard all his life and deserves to see out his days in comfort, with dignity and staring out over the sea where he grew up.

Should it turn out he/they eat through their savings and need money from my brother and I, needless to say, it would be immediately forthcoming

Yeah these are the prices I hear of as well. It's crazy really. I mean that's 60K a year for the care home. Some people stay in care homes for like 5-10 years. That 500K house soon gets eaten.

 

[Will Gill]

Yep, he's still fighting fit too, but he falls over and due to prostate cancer has no bowel control, so those two things put together make it very difficult for my 76 year old mum to handle, he's 82 years young and loving the young nurses

Oddly enough the house they have down here was given to grandad as gift for becoming the postmaster in the 1940s, they had a cash offer of £4m two years ago..... it's insane how much houses cost in the right places. I live in the same area and my mid terrace ex council house with two bedrooms commands £500k; mental

Here's another midterrace example just up the road, casual £2m - https://www.rightmove.co.uk/properties/145379186#/?channel=RES_BUY

 

[MatsyLR]

I had to work full time from the age of 20 due to the death of my father. I had no income and the house had to get sold. We also had our first child at 21. We bought our house at 23 and now not far away from being mortgage free in our early 40's. I never went further than 6th form.

Kids living at home today could quite easily get on the property ladder if they have the luxury of being able to live at home with parents but they get into that 9-5 job which pays pants but gives them plenty of disposable income to enjoy life. They then end up saving nothing and before you know it they are fast approaching 40 whilst still living at home.

Even for the least academic people you can get onto apprenticeships that will net 40-50k a year salaries in their early 20's. A little over 3k a month take home. Living at home you could quite easily save 2k a month and have over 50k for a deposit on a house before you hit 25 years old. It really isn't that difficult.

It is the people that go to uni do absolutely pointless degree's come out with debt to their eyeballs and get into a job that pays 30k a year that will struggle.

Finished uni at 21. Took me 2 years after to get a job. Always been on minimum wage. Lived at parents till I was 31 paying board (last year) and moved into a house with 75k deposit and 25k extra in savings (all mine from saving)

Was originally £38k on mortgage from Feb 2023 over 14 years
Now it's on £28k over 7 years
Will keep going down with overpayments each year. Plan to be done within the 5 year fix.

 

[413x]

Yeah these are the prices I hear of as well. It's crazy really. I mean that's 60K a year for the care home. Some people stay in care homes for like 5-10 years. That 500K house soon gets eaten.

This is why people need to own their own homes.
Because many of us will end up like this. And cost is crippling.

You're going to have no control of your future if you're renting. And who knows if we will even have state support then.

Good chance state won't be able to afford it

 

[adam cool dude]

Fair play. I worked full time from 18. First kid at 20, then more followed, fell into a rent trap for 15+ years!


People want lives though. If I lived at home through my twenties I'd probably have lived a totally different **** life without freedom of my own place. For me I had kids so it wasn't even an option anyway.
What apprenticeships pay that? I'm interested for my kids.



Sadly yes. One of mine is going to be this person. I really worry about it. All I could do as a parent was advise and warn. It's the path they chose. I hope they prove me wrong. It's a Business Degree.

My daughter is doing uniformed services next year at college. A lot of kids got pretty messed up with covid and I think this summer will show that with grades. She is a good average "C" student at best although before Covid I would have said she was capable of higher. The course she is doing will lead on to officer based roles in the forces or detective levels in the police etc but you have a route into a good salary. There are plenty of Engineering/Sparky/Plumber and HR type apprenticeships that lead to 40k+ a year salaries as well.

The problem is many people on the "C" level spectrum think they can go on to A levels and then Uni and end up with something worthwhile. It is what the government want for their statistics and what the Uni's want to offset the funding for the proper degree's. I got A's in Maths and Science and A levels was a massive step up from that (I did Maths, Chemistry, Art and Technology and ended up dropping out of Art and Technology just doing Maths and Chemistry).

My daughter initially wanted to do A levels but it is very difficult discussion to have as I know first hand that she will struggle. She wanted to do Sociology, criminology and psychology then go to Uni which would end up god knows where. Luckily we went to a college open day and found this course which itself is higher level and leads onto 3 A levels.

It is only 3 days a week too so she can earn money on the Thursday and Friday.

Hopefully by her mid 20's she will be on decent money and find someone to settle down with and she should still be able to get a mortgage on a reasonable first house without the need for shared ownership.

 

[CaptainRAVE]

With increasing uncertainly in the economy I’m starting to lean toward a 5 year fixed over a 2, but not sure if that’s crazy or not?

If I fix with Natwest now and rates fall before our current deal ends in October, can I move to the lower rate?

 

[tamzzy]

If I fix with Natwest now and rates fall before our current deal ends in October, can I move to the lower rate?

you can apply for the natwest mortgage now and get the approval letter. as long as you haven't signed on the dotted line, if the rates drop, you can always apply for another mortgage with a better rate
most mortgage applications, once approved, will be valid for 6 months waiting for you to sign on the dotted line

 

[Mysterae_]

Just been browsing remortgage rates again and it looks like nobody can beat the 4.78% that I've got locked in from my current provider.

The fees I see some of the lenders charging are ridiculous, for example NatWest charging £1,525.

Still have 3 months left of the current term, hopefully rates will drop a bit in that time.

 

[dlockers]

With increasing uncertainly in the economy I’m starting to lean toward a 5 year fixed over a 2, but not sure if that’s crazy or not?

If I fix with Natwest now and rates fall before our current deal ends in October, can I move to the lower rate?

Yeah I can't afford it to go the other way. Uncertainty around the general election etc. I reckon we are heads down for a fair while...

 

[PlacidCasual]

I'm honestly thinking that after our current very good 5 year deal I might try and secure a 10 year mortgage just for the certainty of knowing what my outgoings will be in the long term. I should have an excellent loan to earnings and loan to value ratio so hopefully wouldn't get skinned alive.

 

[Whitewater]

I’ve just fixed for 5 years at 4.58% (up from 1.39%) but have until Sept. to decline the offer if rates come down a bit before then. I’m not expecting a massive swing in either direction before the end of the fix.

 

[413x]

I'm honestly thinking that after our current very good 5 year deal I might try and secure a 10 year mortgage just for the certainty of knowing what my outgoings will be in the long term. I should have an excellent loan to earnings and loan to value ratio so hopefully wouldn't get skinned alive.

That's a bold choice.
10 year mortgage now seems a bit.. Risky.

But I guess if that long term stability is really important then it's the right choice for you.

From what I've seen below 80ish LTV it makes little difference

 

[dlockers]

I'm honestly thinking that after our current very good 5 year deal I might try and secure a 10 year mortgage just for the certainty of knowing what my outgoings will be in the long term. I should have an excellent loan to earnings and loan to value ratio so hopefully wouldn't get skinned alive.

That's a bold choice.
10 year mortgage now seems a bit.. Risky.

But I guess if that long term stability is really important then it's the right choice for you.

From what I've seen below 80ish LTV it makes little difference

Ya the maths to do is work out your LTV "cliff" and see if 10 years gets you there or not.

 

[slinxy]

I'm honestly thinking that after our current very good 5 year deal I might try and secure a 10 year mortgage just for the certainty of knowing what my outgoings will be in the long term. I should have an excellent loan to earnings and loan to value ratio so hopefully wouldn't get skinned alive.

My main issue with 10 year fixed mortgage is that there's not that many places that will offer a 10 year mortgage and the interest rates may not be that competitive due to the lack of competition in that market.
Also a lot could happen in 10 years..

Having said that, after this morgage where I have 3 and half years left, I will be left with around 50k remaining balance on my mortage. Officially I will have 10 years left to pay it off but I will try to pay it off in 5 year, making over payments (as I am now) and paying over 1k per month towards it, I'm just paying a little under that at the moment.

The question is, do I try to get a 10 year mortgage and make over payments for the first 3-4 years and then pay an nominal amount for the remaining 6-7 years so I don't get hit by overpayments fee/ending my contract sooner than it should or do I just get another 5 years and pay whatever is left due to interest on a tracker.

There's also the possiblity of just getting a 3 year mortgage totally hammering it with over payments and then moving onto a tracker or a further 1 year to pay of the remaining balance.

My main safety net is that I should have the amount required to pay off the whole balance in savings and stocks/shares but relatively speaking the APR from the mortgage is still one of the cheapest loans a person can get and I should gain more in interest, dividends and capital gains than it would cost me in interest from the mortgage.

A lot will depend on the mortgage rates in 3 and half years time anything over 7% and I'm looking to clear of mortgage, anything around 3.5% and then it's worth the gamble of keeping the amount in cash/stocks/shares.

 

[PlacidCasual]

In the long run I have worries about big interest rate hikes, I just can't see our current debt burden being manageable without increases. I have a farily secure well paid job and good LTV probably 75+%. Peace of mind about outgoings and insuring myself against any shocks might have some value. I guess it depends on the costs to buy out? I'll definitely be using a mortgage adviser, we used one for our last purchase and mortgage and I feel we got immense value out the fees we paid.

 

[Nutty667]

Personally I can't see interest rates going much higher in the long run. The size of mortgages these days, people just wouldn't be able to afford it. Going up to 10% or more would be devastating.

ECB has already cut their interest rate recently. I expect BOE will start cutting sometime soon. Probably won't be much though.

 

[413x]

Personally I can't see interest rates going much higher in the long run. The size of mortgages these days, people just wouldn't be able to afford it. Going up to 10% or more would be devastating.

ECB has already cut their interest rate recently. I expect BOE will start cutting sometime soon. Probably won't be much though.

Same.
We still aren't feeling the full force of the current rates.
How many people are yet to feel it on their mortgages who would? 1/3?

We are still protected.

 

[dlockers]

Personally I can't see interest rates going much higher in the long run. The size of mortgages these days, people just wouldn't be able to afford it. Going up to 10% or more would be devastating.

ECB has already cut their interest rate recently. I expect BOE will start cutting sometime soon. Probably won't be much though.

Even if they cut it, it's probably already priced in.

 

[Nutty667]

Same.
We still aren't feeling the full force of the current rates.
How many people are yet to feel it on their mortgages who would? 1/3?

We are still protected.

Yup, I'm still on 0.99% until 2027.