Mortgage Rate Rises

b0rn2sk8 said:
Back to topic…

I’m fixed at 2.4% until 2029 and I was going some planning as to what we are looking at come 2029 in terms of loan to value. Purchased back in 2019 and we should be down well below 50% LTV by the time the remortgage comes up.

The interesting thing is that house valuations are actually 5% down on their historic 2022/23 high around here. It makes sense though, it’s a relatively small town and there are 4 huge developments going up. There are loads of similar houses for sale in the local area to mine and it seems supply is outstripping demand at the moment.

Probably not a bad thing in terms of the long term health of the local economy, it was getting silly expensive. Prices are still waaay up on 2019 when we bought this.
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When did you fix at 2.4? Great rate! I have a portion at 0.99 coming to an end in Dec 2026 and worried the overall rates will mean whatever my LTV.. I'll be paying more overall
 
ergonomics said:
When did you fix at 2.4? Great rate! I have a portion at 0.99 coming to an end in Dec 2026 and worried the overall rates will mean whatever my LTV.. I'll be paying more overall
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2019 :p

People thought we were mad for fixing for 10 years but back then the expectation rates would materially go up so 5 years was the 'go to' recomendation. Unsurprisingly we didn't predict a pandemic which cut rates further and we were weighing up 5 and 10 year fixes as rates were starting to creep up from historic lows. If we had taken the slightly cheaper 5 year fix in 2019, that would have ended in 2024 we would be up at current rates so the longer term bet has paid off.
 
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It has always struck me that constantly taking short fixed mortgages only suits the finance industry in the longer term.
 
Hagar said:
It has always struck me that constantly taking short fixed mortgages only suits the finance industry in the longer term.
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Have a prize.

www.financialreporter.co.uk

Brokers steer households to shorter-term fixed rates \'to increase fees from repeat business\', claims BoE working paper

A Bank of England working paper published today has stated that brokers encouraging households to choose short fixed-term mortgages, transferring risk from base rate changes from lenders to borrowers.
www.financialreporter.co.uk www.financialreporter.co.uk
 
200sols said:
Have a prize.

www.financialreporter.co.uk

Brokers steer households to shorter-term fixed rates \'to increase fees from repeat business\', claims BoE working paper

A Bank of England working paper published today has stated that brokers encouraging households to choose short fixed-term mortgages, transferring risk from base rate changes from lenders to borrowers.
www.financialreporter.co.uk www.financialreporter.co.uk
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Now it is much better to fix on a 2 year though as it is pretty obvious rates will be dropping in the foreseeable. The bank of England really has no choice as our governments of recent times have messed things up so much that they simply cannot service a 4.5% rate and will go bankrupt. Then in a couple of years before things go up creek again fix on a ten whilst it is still good.

Hindsight is a wonderful thing but looking back at the time between Covid and the invasion of Ukraine it was pretty obvious that rates were going to go crazy. I think complacency of having low rates for a decade had peoples heads in the sand. Including myself although there was very little risk on my part as my mortgage is tiny compared to most at the time.
 
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darreny said:
Our fixed rate of 1.8 runs out in June so it's looking like about 4.3 on 2 year fixed
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Personally I believe it is still a gamble to fix for two years with the current government's policies, inflation on the rise and dismal growth. Two years next June may be worse.

I am not a financial expert, nor is this financial advice, just my opinion on short fixes now.
 
adam cool dude said:
Now it is much better to fix on a 2 year though as it is pretty obvious rates will be dropping in the foreseeable. The bank of England really has no choice as our governments of recent times have messed things up so much that they simply cannot service a 4.5% rate and will go bankrupt. Then in a couple of years before things go up creek again fix on a ten whilst it is still good.

Hindsight is a wonderful thing but looking back at the time between Covid and the invasion of Ukraine it was pretty obvious that rates were going to go crazy. I think complacency of having low rates for a decade had peoples heads in the sand. Including myself although there was very little risk on my part as my mortgage is tiny compared to most at the time.
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Nobody knows where rates will be in 2 years, they could very well be higher then they are now. You're kidding yourself if you think anything is certain.
 
200sols said:
Nobody knows where rates will be in 2 years, they could very well be higher then they are now. You're kidding yourself if you think anything is certain.
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They could very well be but everything points to them dropping. Especially now the government cannot service its debt at these current rates. It is going to do everything it can to drop it and drop it fast.
 
Nasher said:
I renewed during COVID at 1.6%. Wishing I had gone for 10 years now :/

Expires at the start of 2026. Overpaying as much as I can until then.
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No point overpaying when you can get 5% in a cash ISA until your point of renewal. Mines similar renewing in 2026..not looking forward to it.
 
Hagar said:
Personally I believe it is still a gamble to fix for two years with the current government's policies, inflation on the rise and dismal growth. Two years next June may be worse.

I am not a financial expert, nor is this financial advice, just my opinion on short fixes now.
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We're not sure what our future looks like right now as there's maybe a possible move to the south east as my wife wants to move near her family, our oldest goes into year 6 in September so need to pick a high school by October. Mortgage is up in June so may need to let it ride at 7.2 till a decision is made. Don't know how people make decisions as I think we're a little risk averse
 
adam cool dude said:
They could very well be but everything points to them dropping. Especially now the government cannot service its debt at these current rates. It is going to do everything it can to drop it and drop it fast.
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As discussed previously on this thread, the upside of potentially saving a couple of points in 2 years often isn't worth the risk of the mortgage becoming unaffordable if it swings significantly the other way.
 
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