Man of Honour
Is it just me that gets weirded out by the fact that longer fixes are cheaper than short? It feels like this shouldn't happen unless they're thinking rates are going to drop before the end of the longer fix.
Mortgage Rate Rises
- Thread starter glenimp617
- Start date
COVID set a silly precedent where the government bails you out. If you are over extended that's your fault, downsize.
That's a good move if you can afford it's worth paying more for the stability
And do what? Lol
Soldato
This is pretty grim going. Was planning to move next year to our final house, although this one isnt a hardship would be spending circa 1.2m
With that intrest rate banded around theres no chance which is fine i suppose, its just funny how life changes without you actually doing anything different. Current rates quoted would put me around £500 more on our mortgage which is also ok but not great. It does make you think about these things we have that dont need ( supercars in garage ) etc. Sad times
With that intrest rate banded around theres no chance which is fine i suppose, its just funny how life changes without you actually doing anything different. Current rates quoted would put me around £500 more on our mortgage which is also ok but not great. It does make you think about these things we have that dont need ( supercars in garage ) etc. Sad times
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Soldato
Reverse the idiotic tax cuts for one.
Caporegime
Thats what the lenders and gambling on. Its all a guess.
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Soldato
I'm not going to disagree with everything you said, but this is another shock to the system with no notice, we've had about 10 years of 1% or less base rate, if you asked people 2 years ago if we'd be seeing 5-6% base rate by mid 2023 I think most would have laughed at you.
2020's is a weird decade, and this year is certainly up there with the "out there" routes, I'm half expecting to wake up tomorrow and find out it's all been a dream.
- Joined
- 30 Sep 2005
- Posts
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The public haven't had enough yet. It's still not really bitten. Give it a year.
Man of Honour
Yes I understand that they offer you a rate based did their predictions, but... Isn't it looking more certain than ever that rates will be rising? Why would we now be seeing their predictions flip for the first time in years, when it's most likely that rates will rise?
I think give it a winter with these fun energy prices and a couple more rate hikes.
Caporegime
Thats 100% what they are thinking. They can't see a situation where high rates are sustainable for many years without something giving. Mortgages are basically a gamble the bank are willing to take. If they think rates are stable then longer term rates will be closer to short term ones. If they think its going to be grim in the short term but sort itself out relatively quickly then the longer term rates will reflect that.
I don't think anything has really bitten yet and I think the vast majority of people haven't really changed their spending much. A lot will be in denial and will only change when forced to. The government seem intent on kicking the can down the road, probably until its not their problem any more.
Labour loves spending other people's money
Soldato
At this point almost anything is better than Truss in charge. I'd put a golden retriever in as PM, would do less damage. Might eat some of the paperwork though.
Markets have spoken, this mini-budget is the most ill-conceived self-inflicted injury we've done ourselves in a long time.
Soldato
BoE expect inflation to drop to 2% by 2024 so it’s quite likely interest rates will be falling by then. Once the recession passes and the dollar strength subsides then that will further help. Recessions tend to average 9-10 months so sometime next year it will likely have passed.
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Whose money are the current government spending?
Yeah, and they also said high inflation was transitory.... it isn't, they also said we wouldn't return to pre 2008 rates, we are. In short, BoE have lost all credibility hence why the markets don't believe anything they say.
Not a single chance inflation is 2% by 2024 I'd bet everything I have on that.
Fully agree. The whole world might be struggling but I think the U.K. are in a weaker overall position.
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Soldato
Caporegime
Maybe I am the only one but when we bought our house 12 years ago I did actually take into account rates going up and back then no one thought they would stay low for that long. That's why we went for the option of having a good sized house that we could easily afford that if needed we could sell and upgrade at a future date.
It is also not really a shock to the system. What happened with COVID was always going to mess up the world economy afterwards. I would honestly say I most likely had my head in the sand like most but if someone said what today would be like two years ago I wouldn't be surprised.
Because near term the government is borrowing billions of extra which is pushing shorter duration gilts to much higher yields and this is feeding into the mortgage market as well. Don't worry though, 10yr yields are rising as well so those mortgages will become more expensive soon enough.
I don't think that is true. The bank doesn't gamble, the bank cant lose. If rates rise you pay or they take your asset.
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