Mortgage Rate Rises

Thinking of letting my second home out or selling due to marriage and moving house to our lasses (she owns hers I own mine currently we're not named on each others mortgages and don't contribute to each others mortgages)

So first question, how long do I have to sell the property before cgt if I decide to sell?

Second question, how much tax do I actually pay on rent? Do I pay tax on the full amount I charge so say charging 500 all in rent wise or do I pay tax on the money I earn after I take away my btl mortgage cost of 340 which gives me a plus 160?
 
Both answers are available on gov.uk ;)

The tax on rent question is much more complex than your question allows. You have never been able to offset any capital elements of a mortgage but you can offset some interest. You can of course offset other expenses.
 
Last edited:
Decisions, decisions.

We’ve got two mortgage options on the table:

1. A 2-year fix at 4.10%, which is around £300 cheaper per month compared to the tracker.

2. A 2-year tracker, currently at 0.15% above base rate, making it 4.90% right now.

Before the recent budget, the tracker seemed like the better option. However, with talk of US tariffs potentially driving up global inflation and the BoE signaling a preference for gradual rate cuts rather than aggressive ones, I’m starting to second-guess.

The big question: What’s the general consensus right now—fix or tracker? Most predictions suggest we could see 3–4 base rate cuts next year, potentially dropping the base rate to around 3.75–4%. That would bring the tracker in line with the fixed rate by the end of 2025. But looking at the full 2 years, could the tracker still work out cheaper overall if rates drop further in 2026?

Curious to hear thoughts—what’s everyone doing in this climate?
 
Why do you think there are going to be 3-4 base rate cuts without any increases? Inflation is where it needs to be (it dipped below then it peaked above). I would guess we're in the ball park now but all it takes is some form of escalation (which is not unlikely) and you could get increases again to control inflation.
 
I can’t see things changing materially anytime soon unless something dramatic happens.

Interest rates are not exactly high, they are just higher than what they were. People got too used to very low interest rates which were probably too low for too long but they were propping up the economy during a period of record low investment.
 
Chris344 said:
Decisions, decisions.

We’ve got two mortgage options on the table:

1. A 2-year fix at 4.10%, which is around £300 cheaper per month compared to the tracker.

2. A 2-year tracker, currently at 0.15% above base rate, making it 4.90% right now.

Before the recent budget, the tracker seemed like the better option. However, with talk of US tariffs potentially driving up global inflation and the BoE signaling a preference for gradual rate cuts rather than aggressive ones, I’m starting to second-guess.

The big question: What’s the general consensus right now—fix or tracker? Most predictions suggest we could see 3–4 base rate cuts next year, potentially dropping the base rate to around 3.75–4%. That would bring the tracker in line with the fixed rate by the end of 2025. But looking at the full 2 years, could the tracker still work out cheaper overall if rates drop further in 2026?

Curious to hear thoughts—what’s everyone doing in this climate?
Click to expand...
I'd probably just fix for 5 years if the payments at current rates were reasonably affordable.
 
Fix fix fix - i just can't see a rise in inflation not happening given the way this government is rasing taxes .

Will be very interesting to see what teh BOE have to say on the 19th of December however the more important Sonia swap rates are forcast to drop.

If your 6 months out or less on your existing fix then pre-book the new rate now- if it goes down happy days if not it will stay the same but not go up.
 
So how's this going to play out.

More unemployment and rising costs?
Both modest by sound of things with some sectors (unfortunately hitting the younger/lower paid) hit harder.

Sounds a bit of a death spiral if prices can't be lowered due to falling demand.
 
Bald-Eagle22 said:
Fix fix fix - i just can't see a rise in inflation not happening given the way this government is rasing taxes .

Will be very interesting to see what teh BOE have to say on the 19th of December however the more important Sonia swap rates are forcast to drop.

If your 6 months out or less on your existing fix then pre-book the new rate now- if it goes down happy days if not it will stay the same but not go up.
Click to expand...

Why do you think inflation will rise again due to taxes going up? I'm prepared to be schooled and called names, but I thought a rise in taxes and general less disposable income would cause inflation to stay in check and/or fall? Feel free to laugh and point. :)
 
jaybee said:
Why do you think inflation will rise again due to taxes going up? I'm prepared to be schooled and called names, but I thought a rise in taxes and general less disposable income would cause inflation to stay in check and/or fall? Feel free to laugh and point. :)
Click to expand...

No you are right, he needs to replaces taxes with spending and it works out.

Spending is taxation, which is more than direct taxation, thus the difference will occur as inflation.

The problem is the feedback loop of useless government spending more, while tax revenue reduces even after tax hikes, until the economy collapses in the next recession.

And that will trigger huge inflation.
 
The reason inflation is expected to tick up is that the tax rises are predominantly on employment costs to business. It'll come down to whether business are able to pay for that by increasing prices (inflation), or by laying off staff. At the moment the expectation seems to be that job lay offs in the short term aren't expected to be that much.
 
Jono8 said:
Lol. Bubble surface getting very thin now.
Click to expand...
Unless there is some sort of external economic shock which leads to substantial job losses, I can’t see it ‘bursting’.

Houses will at least maintain their value even if the people’s incomes stop growing, the only reason prices continue to go up is people keep finding the money from somewhere.
 
b0rn2sk8 said:
Unless there is some sort of external economic shock which leads to substantial job losses, I can’t see it ‘bursting’.

Houses will at least maintain their value even if the people’s incomes stop growing, the only reason prices continue to go up is people keep finding the money from somewhere.
Click to expand...
Same.

Its all about jobs.
If people keep jobs they can just make mortgages longer and longer and keep the bubble growing.

If jobs losses become a thing and unemployment grows.. That's where the wheels can come off.
 
413x said:
Same.

Its all about jobs.
If people keep jobs they can just make mortgages longer and longer and keep the bubble growing.

If jobs losses become a thing and unemployment grows.. That's where the wheels can come off.
Click to expand...
What happens when prices are stretched to where everyone is already at the maximum they can borrow over the longest term?

From what i can see, i just don't see how these rises are sustainable, especially with interest rates going from near zero to ~5% in the last few years.

The whole thing feels like a ticking time bomb
 
Last edited:
b0rn2sk8 said:
Unless there is some sort of external economic shock which leads to substantial job losses, I can’t see it ‘bursting’.

Houses will at least maintain their value even if the people’s incomes stop growing, the only reason prices continue to go up is people keep finding the money from somewhere.
Click to expand...

Yup agreed, it's just not gonna happen.
 
You must log in or register to reply here.
Back
Top Bottom