Mortgage Rate Rises

Hopefully Halifax pass on some of the cut, as I have a mortgage offer in place that I could still switch.
 
I'm going to be THAT guy.

I know no one can predict the future but do people believe that rate cuts will be fast and frequent?


I've just agreed a 3 year deal at 4.4%, 25% deposit down.
 
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cuts probably.. but a lot of it is often already priced in the mortgage deals from what I've seen. Currently from my shopping around, 5 year seems to be give us the lowest number. Still double what we're currently at but yeah.. it is what it is.
 
413x said:
I expect more rate cuts with the economy flat at best.
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Dude.. you’ve been expecting/predicting rate cuts since the rates have gone up.

The “norm” and average for the last 30 years, which is the length of most people’s mortgages is 5.74%.. it’s relatively cheap considering how much house prices have gone up by in the last 30 years (25.9%).

I still have a 4.01% for the next three years, it was 2.99% before that for the previous 5 years. If the mortgage rates drop to 3.5% or lower when I re-mortgage then I’ll be thinking of stopping overpayment and investing more into the stock market. If the rates go up to 6%, then I’ll be thinking of liquidation and paying off the remaining mortgage in one go.

Heck if it drops to 2.5%, then I’ll be thinking of getting a second home, and renting the current one out.

I took my original mortgage out just after the Brexit vote, and the affordability tests that the bank ran, tested it up to 8%.. a lot of lenders at the time was calculating their risks against much higher rates. I’m kinda glad that I didn’t use the maximum leading amount that my mortgage in principle allowed and only used 2/3 of it.
 
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slinxy said:
The “norm” and average for the last 30 years, which is the length of most people’s mortgages is 5.74%.. it’s relatively cheap considering how much house prices have gone up by in the last 30 years (25.9%).
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If you're comparing average interest rates you also need to compare the house prices at the time, the salaries at the time, inflation and prices at the time... etc. Rates don't exist in isolation.

Its well known that the period of low rates was abnormal compared to history, but against the rise in house prices and wage stagnation since 2008, the public can't take the interest rate levels of the past it would ruin people. When banks stress test 8% or whatever, they don't also stress test massive inflation/cost of living increases and job loss at the same time. Combining those factors would mean its beyond the limits of most people.


grudas said:
they're so quick with it.. never see it go up that quickly do you..
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Protecting profit margins. When it goes down it squeezes margins so they cut fast. When it goes up, profit margins increase so of course they don't raise quickly, only when other competitors cause them to risk losing market share or getting way out of kilter with others.
 
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LiE said:
Hopefully Halifax pass on some of the cut, as I have a mortgage offer in place that I could still switch.
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Same have got 4.1% offer from them last month but its crept up to 4.2% since and not changed today.
 
danlightbulb said:
If you're comparing average interest rates you also need to compare the house prices at the time, the salaries at the time, inflation and prices at the time... etc. Rates don't exist in isolation.

Its well known that the period of low rates was abnormal compared to history, but against the rise in house prices and wage stagnation since 2008, the public can't take the interest rate levels of the past it would ruin people. When banks stress test 8% or whatever, they don't also stress test massive inflation/cost of living increases and job loss at the same time. Combining those factors would mean its beyond the limits of most people.
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House prices differ from all other commodities in the sense that that they don’t inflate but appreciate. House prices will always be held back or pushed upwards depending on what people can afford. Taking in account of salary, rates and cost of living. If interest rates are higher, then sellers may have to adjust their asking price to be lower.

The main reason why the rates are beyond some people’s means is down the prolong low interest rates, which have lured them into a false sense of normality and is simply that they have over stretched.

Sellers do not want to lower their prices, they rather see it as a blip than lose possible gains. With changes capital gains taxes, a lot of landlords especially the buy to rent ones are in a sticky situ.. either put up prices to cover the tax and risk the tenants leaving or take the financial hit themselves. That’s even before they have to re-mortgage.. it’s now actually a good time to buy, as house prices have been going lower and if rates do go down in future, the house prices will go up and the mortgage will be cheaper.
 
jaybee said:
What do you mean by "rate cuts will go again"?
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Going as low as possible just like after 08 because otherwise our government will Bankrupt itself. They cannot sustain these rates.

It wouldn't surprise me if within two years we get below 3%. We will continue to creep along like a wounded animal for another decade till it all goes **** up again. Then yank up the rates again.

The whole world has gotten so used to low interest rates that our government cannot sustain anything.
 
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Well growth forecast is slashed and inflation will be rising, hang onto your hats. Unemployment anybody?
 
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