Mortgage Rate Rises

Since you asked, IMO there might be a small interest rate cut before the US election, but medium to long term interest rates will rise. However, do your own research.

The more deposit you can put down, the better your mortgage rate can be, since you are borrowing less money and you are less of a risk to the lender.

The other thing to consider is the housing market. It has totally stalled at the moment, so does this mean house prices could come down? In general, house prices rarely go down though, they just stop rising.
 
radderfire said:
Since you asked, IMO there might be a small interest rate cut before the US election, but medium to long term interest rates will rise. However, do your own research.
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I’m not sure you can say that with any kind of certainty. Definitely an opinion, certainly not a fact.

You might as well be mystic Meg making a prediction about the long term.

radderfire said:
The more deposit you can put down, the better your mortgage rate can be, since you are borrowing less money and you are less of a risk to the lender.

The other thing to consider is the housing market. It has totally stalled at the moment, so does this mean house prices could come down? In general, house prices rarely go down though, they just stop rising.
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I’m not sure I’d call the market totally stalled either.

There are plenty of transactions and properties with sensible selling prices, are selling. Prices are rising, just slowly compared the the madness of 2020-2022.

Halifax or Nationwide were briefing out that prices are likely to rise further in the short term thanks to the interest rate cut.
 
radderfire said:
Every time you get a remortgage deal, you are going to have to pay more fees, so jumping is not without its costs.
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Is this always true? I don't remember paying any fees when I took out my mortgage and can't see any mention of fees when staying with my current provider if looking at "fee saver mortgages"?

In fact I can't see how the mortgages work fees are any better (or certainly not in my case, the tiny improvement in interest rates is offset with the £999 booking fee giving an overall worse indicated AER? %). I assume the only benefit of such is if you plan on making decent use of your overpayment allowance.
 
mejinks said:
Thank you alll. I was a bit cautious about picking the 2 year over the 5 year, does anyone thing they will go much lower?
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Possibly, possibly not. I’d say there is potential for small cuts but we’re are not going to be seeing 2% rates again unless something dramatic happens.

That said, the US bubble could burst again tomorrow and the whole thing could come crashing down. I don’t think anyone’s predicting that and it’s a bit of a strawman to demonstrate that no one really knows.

mejinks said:
is total repayable for a mortgage really over 200% initial mortgage?
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Yes, totally normal. The longer you borrow the money for, the more you pay.

mejinks said:
I know the house value will go up, but I doubt by that much. Is the high interest rate Im being quoted because of the 95% ltv?
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Basically yes, if you default in the first few years, the bank will probably lose money on the repossession so the rate reflects this.

mejinks said:
I guess a bigger deposit is needed? Also, how much to overpay by? Whhat would be a worthwhile figure?
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If you can get it down to 90% you’ll get a lower rate, same again at 85%, 80%, 70% and 60%. Not all banks use the same thresholds but they are the typical ones.

That said, if the choose was buy now and take the hit at a higher rate or waiting to get a larger deposit, I’d go with buy now. The risk of waiting is the growth in the housing market outpaces your ability to save.
 
Armageus said:
Is this always true? I don't remember paying any fees when I took out my mortgage and can't see any mention of fees when staying with my current provider if looking at "fee saver mortgages"?

In fact I can't see how the mortgages work fees are any better (or certainly not in my case, the tiny improvement in interest rates is offset with the £999 booking fee giving an overall worse indicated AER? %). I assume the only benefit of such is if you plan on making decent use of your overpayment allowance.
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It depends on how big your mortgage balance is.

Small balance, fee free with higher rate is usually better.

Bigger balance, fee with lower rate is usually better.
 
Armageus said:
Is this always true? I don't remember paying any fees when I took out my mortgage and can't see any mention of fees when staying with my current provider if looking at "fee saver mortgages"?
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Any "fee free" mortgages are never the most competitive, the interest rate will be above class leading mortgages to compensate, so you are technically paying. There is never a free lunch when you are borrowing money.
 
Finally some NatWest price drops trickling through to remortgaging deals. 4.3% 5 year would only cost me another £150 a month and if i extend the mortgage it’ll end up the same as now. I may not extend at that price. We don’t need to fix until end of October, so the question is, do we now wait for any further changes, hopefully drops?
 
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CaptainRAVE said:
Finally some NatWest price drops trickling through to remortgaging deals. 4.3% 5 year would only cost me another £150 a month and if i extend the mortgage it’ll end up the same as now. I may not extend at that price. We don’t need to fix until end of October, so the question is, do we now wait for any further changes, hopefully drops?
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Progressing through a house purchase just now, was going with NatWest’s 4.56% product until the broker called today with news of this 4.3% deal. Not a huge saving but every little helps. Much better than the 5%+ deals earlier in the year.

Hopefully there are further drops coming, sadly I’m going to have to stick.
 
radderfire said:
Any "fee free" mortgages are never the most competitive, the interest rate will be above class leading mortgages to compensate, so you are technically paying. There is never a free lunch when you are borrowing money.
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Not true.
Most of the mortgages available nowadays are either with fee or without fee. If you go without you pay a slightly higher interest rate.
Whether they are competitive depends on your ratio and amount being borrowed and over what term.
 
mejinks said:
Thank you alll. I was a bit cautious about picking the 2 year over the 5 year, does anyone thing they will go much lower? is total repayable for a mortgage really over 200% initial mortgage? I know the house value will go up, but I doubt by that much. Is the high interest rate Im being quoted because of the 95% ltv? I guess a bigger deposit is needed? Also, how much to overpay by? Whhat would be a worthwhile figure?
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Think about it differently. At the current price per month, how much more can you afford? Rather than just gambling on rates going down, you should consider how much it'd hurt if rates did the opposite. For me, I am much more sensitive to the monthly figure increasing than "gaining" by it coming down.

mejinks said:
Thank you alll. I was a bit cautious about picking the 2 year over the 5 year, does anyone thing they will go much lower? is total repayable for a mortgage really over 200% initial mortgage? I know the house value will go up, but I doubt by that much. Is the high interest rate Im being quoted because of the 95% ltv? I guess a bigger deposit is needed? Also, how much to overpay by? Whhat would be a worthwhile figure?
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Yes but keep in mind your 340 total repayable seems like a lot now; but in 20 years or whatever when the mortgage is nearing completion, 340 will seem cheap and your house will be worth like 500k. Your salary will grow but the amount you've borrowed will still be 140 or w/e it was.
 
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naefeart said:
Progressing through a house purchase just now, was going with NatWest’s 4.56% product until the broker called today with news of this 4.3% deal. Not a huge saving but every little helps. Much better than the 5%+ deals earlier in the year.

Hopefully there are further drops coming, sadly I’m going to have to stick.
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Yup, I’ll take any drop I can get :)
 
Crystal ball please folks -

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My heart says 2 but my brain says forgeddddaaaboutit and lock-in for 5. It is a £2.4k higher cost over 2 years - so I'd need to recoup at least that in whatever deal I sign in 2026.
 
dlockers said:
Crystal ball please folks -

nShs43c.png


My heart says 2 but my brain says forgeddddaaaboutit and lock-in for 5. It is a £2.4k higher cost over 2 years - so I'd need to recoup at least that in whatever deal I sign in 2026.
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I’m in exactly the same scenario. It’s a tough call. I have to decide before end of October, I doubt they’ll rise before then, so I’ll wait a bit longer. I’m still leaning toward the 5 and then just forget about it. The 2 year rates are still pretty high.
 
CaptainRAVE said:
I’m in exactly the same scenario. It’s a tough call. I have to decide before end of October, I doubt they’ll rise before then, so I’ll wait a bit longer. I’m still leaning toward the 5 and then just forget about it. The 2 year rates are still pretty high.
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I think that's my view as well.... I mean it'd have to fall enough to recoup £2.4k; but if it fell substantially in year 3, 4 or 5 - my ERC is 4%, 3% or 2% so different maths would apply.
 
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