Mortgage Rate Rises

[b0rn2sk8]

wasn't there the mortgage stress test at SVR + 3% to prevent this happening?

Yes.

As painful as it may be, downsizing is also an option, 3 years past the post covid housing boom should mean they are selling the house for more than they paid and should be sufficient equity to clear the fees on the onward purchase and put down the same deposit again on something cheaper, potentially at a higher loan to value ratio.

 

[tamzzy]

i bought my first home during the covid "boom", so no equity for me (ish)
but fortunately had the luck/foresight to lock in 2.35% x 10 years so...

 

[200sols]

Yes.

As painful as it may be, downsizing is also an option, 3 years past the post covid housing boom should mean they are selling the house for more than they paid and should be sufficient equity to clear the fees on the onward purchase and put down the same deposit again on something cheaper, potentially at a higher loan to value ratio.

Lots of people paid way over the top during covid, they have no equity.

 

[Freefaller]

I'm trying to work out if I can release some equity to do some home improvements without screwing myself on repayments this time next year. Building materials are still so high. And I wonder if it's worth the effort sometimes or just whether it's cheaper to sell and buy something else (although I like our situation at the moment).

 

[TNA]

I'm trying to work out if I can release some equity to do some home improvements without screwing myself on repayments this time next year. Building materials are still so high. And I wonder if it's worth the effort sometimes or just whether it's cheaper to sell and buy something else (although I like our situation at the moment).

We was considering that. But in the end sold and upsized instead. Very glad we did in the end.

 

[b0rn2sk8]

Lots of people paid way over the top during covid, they have no equity.

Prices are generally still higher than in 2020-2022.

Here is the data going back many years:

United Kingdom House Price Index YoY

House Price Index YoY in the United Kingdom remained unchanged at 2.90 percent in February. This page includes a chart with historical data for the United Kingdom House Price Index YoY.

tradingeconomics.com

Yes there were a few months of dips but they were followed by many months more of rises which more than cancelled the dip out.

I’m sure there will be pockets that have had bigger dips and lower rises but as a generalisation, the typical person who bought during Covid will not have seen a cash drop in their house value.

Likewise the people who bought at the time of rapid rises in late 2022 on a 5 year deal will still be under their deal for an another 2 years. 2 year deals would have expired already.

They’ll have equity, they’ll have needed to suffer a significant drop to be in negative equity, likewise if they are downsizing, they don’t need as much equity as they needed to over stretch themselves.

 

[fez]

I'm trying to work out if I can release some equity to do some home improvements without screwing myself on repayments this time next year. Building materials are still so high. And I wonder if it's worth the effort sometimes or just whether it's cheaper to sell and buy something else (although I like our situation at the moment).

Ain't this the problem. The only reason these days to do any serious building work is for your own benefit. I think very little of it gives you any returns financially unless you can somehow do it on the cheap. Materials and the amount builders charge along with the risk of absolute cowboys doing it makes alterations so expensive.

 

[Freefaller]

Ain't this the problem. The only reason these days to do any serious building work is for your own benefit. I think very little of it gives you any returns financially unless you can somehow do it on the cheap. Materials and the amount builders charge along with the risk of absolute cowboys doing it makes alterations so expensive.

Very first world problem. But the house regardless needs a bit of TLC but also is prime for a bit of extension/tweaking. Less worried about getting money back as it's a home, I'm just wondering whether the cost/benefit is worth it.

It's tough especially as you say with the costs of the actual work.

 

[fez]

I'm just wondering whether the cost/benefit is worth it.

Yeah, its a tricky decision. We are probably moving very soon to our forever home but we toyed with the idea of doing a bit of work on the house and going into the loft and staying here a bit longer. The cost of it would probably just about have broken even when we sold it but the disruption and amount of our time it would have taken to get it done meant we decided not to. Wouldn't have really given us more living space either. Problem with going up instead of out. You usually get more bedrooms but not more living space.

 

[leoncuprar]

Up for renewal, currently with Santander

£0 fee
2yr fix 4.52%.
3yr fix 4.38%

Hoping rates might drop a little before August , but edging towards a 3yr fix....this will hopefully be my last time doing this

 

[Shoza]

Managed to fix at 4% (£495 product fee) for another 5 years as current product ended 31 March. Had 14 years left on the term so upped that to 18 to make monthly a bit lower than current to give us some spending room on other stuff going up. Will overpay if/when rates drop again.

 

[BUDFORCE]

Very first world problem. But the house regardless needs a bit of TLC but also is prime for a bit of extension/tweaking. Less worried about getting money back as it's a home, I'm just wondering whether the cost/benefit is worth it.

It's tough especially as you say with the costs of the actual work.

I don't think it's worth it personally.

Obviously it's personal choice, but getting anything building done at the moment is ££££££££, I know you said you are not concerned about getting that back in property value, you certainly won't.

And that assumes it all goes smoothly, I'm this day and age, people just want the money and not do anything properly.

I think it you genuinely need more space you are better off moving.

 

[matt100]

Well, for better or worse there's now noise of drastic rate cuts courtesy of the man baby.

 

[doodah]

Read yesterday they were expecting and priced in three further of 0.25% cuts this year (May, August and November I think).

 

[fez]

Well, for better or worse there's now noise of drastic rate cuts courtesy of the man baby.

Yay, time for house prices to go up up up!

 

[robj20]

Read yesterday they were expecting and priced in three further of 0.25% cuts this year (May, August and November I think).

I wonder if it's better to stay on the SVR a while rather than fix.

 

[Freakbro]

Well, for better or worse there's now noise of drastic rate cuts courtesy of the man baby.

Probably, as the impending recession due to Trumps trade war puts pressure on rate cuts.

Though a trade war causing inflation puts pressure on rate rises.

There are no economic models for our current situation of the US acting so irrationally

 

[200sols]

Mortgage rates usually follow swaps.

 

[doodah]

I wonder if it's better to stay on the SVR a while rather than fix.

Yeah - the fixed rate offers I'm seeing for our impending first remortgage are pretty mediocre.

 

[robj20]

How soon after the base rate feeling do the mortgages normally drop.
Is there any graphs showing it. Love to see the Bank of Ireland timing so I can plan in when they will drop.