Re-mortgage now or wait?
Discussion
nunpuncher said:
I'm not smart enough to understand how all the interconnecting things that control the economy influence the interest rate but all I know is that the ACTUAL BOE base rate hasn't changed and the rates now being offered by mortgage providers are quite a % over base rate than what they normally would be. With the mini budget being back pedalled, the new cabinet hopefully learning it's lesson and the pound now back to where it was before all this madness, could we be in a situation where folk have possibly jumped the gun or is it the energy crisis all over again?
I don’t know either but usually look to the international picture in such cases. And most countries with similar inflationary pressures are heading towards higher interest rates. Dynion Araf Uchaf said:
this thread got me antsy enough to go and check the length of my current fixed rate mortgage deal. I knew I'd fixed it back during the lock down days but couldn't remember how long for ( I thought it was 2 years)
anyway with Santander and
1.59% fixed until August..... 2026.
for once I did something right financially in my life. I am going to give my old self a hearty handshake...
That was a good effort!anyway with Santander and
1.59% fixed until August..... 2026.
for once I did something right financially in my life. I am going to give my old self a hearty handshake...
We tried to change in the summer but got held up as mortgage advisor was struggling and then we got distracted. Could have fixed at around 2%. Now looks like we’ll be lucky to get 4.4, meeting with Halifax on Thursday and think we’ll be best off taking whatever they offer as rates only going one way IMO.
nunpuncher said:
I'm not smart enough to understand how all the interconnecting things that control the economy influence the interest rate but all I know is that the ACTUAL BOE base rate hasn't changed and the rates now being offered by mortgage providers are quite a % over base rate than what they normally would be. With the mini budget being back pedalled, the new cabinet hopefully learning it's lesson and the pound now back to where it was before all this madness, could we be in a situation where folk have possibly jumped the gun or is it the energy crisis all over again?
Still anticipated to be north of 5% next year https://twitter.com/EdConwaySky/status/15772150810...Can we not get a rate in principle 6mths in advance of actual fixed term end and if rates are better come the end of that 6mths dump the principle rate and re-apply under current conditions?
I've got 250k up for renewal end of August. I have another 140k fixed until mid 2025 when hopefully things will have settled. I haven't been tempted to pay the ERCs to fix right now as the Government appear to have lost the plot.
I've got 250k up for renewal end of August. I have another 140k fixed until mid 2025 when hopefully things will have settled. I haven't been tempted to pay the ERCs to fix right now as the Government appear to have lost the plot.
julian987R said:
I have been offered 3.05% fixed for 10 years. May I get some advice from you all if you feel this is a fair rate and if the glory days of 1 to 2 % rates are over for many years to come or confidence such rates will return again in say 5 years time?
Thank you in advance
I went with this 3.05% rate at the time, and just checked and had I delayed matters the rates they offer today, less than a week later, is 4.55, a rise of 1.5%. That is nuts huh. I was thinking they might have gone down! hence going in to check. Thank you in advance
As of 1 hour ago
Average rate on a two-year fixed deal soars to nearly 6%
Government’s 45p tax U-turn and calmer stock markets do not result in cheaper new mortgage deals
https://www.theguardian.com/money/2022/oct/04/uk-m...
Average rate on a two-year fixed deal soars to nearly 6%
Government’s 45p tax U-turn and calmer stock markets do not result in cheaper new mortgage deals
https://www.theguardian.com/money/2022/oct/04/uk-m...
Pistonsquirter said:
StressedEric said:
Pistonsquirter said:
My nationwide fix ends in Jan 22 and their current offers are worse than all other lenders, is the incentive they do not charge ERP if you refinance with them? Swines..
tbh I’m genuinely typing to go interest only for a little while to fund my renovation, any unspent mortgage payment equivalent will be banked until a new negotiation then I’ll pay off a lump, well it makes sense to me..
So your "unspent mortgage payment equivalent" will fund your renovation AND be banked? OKtbh I’m genuinely typing to go interest only for a little while to fund my renovation, any unspent mortgage payment equivalent will be banked until a new negotiation then I’ll pay off a lump, well it makes sense to me..
Researched a bit and turns out interest only is not so easy these days, all the bankers over cooked it for us in the lead up to GFC and now we can't.
Hey @Sarnie is capital repayment switch to interest only a thing these days?
nunpuncher said:
The big question now is. If you can only get c5% at best how long do you fix for? Not sure I'd want to commit to that for 5 years.
yes very true. Blimey what a difference a day makes.I was reading editorial on if the rates would ever swing back to the 1% era and the consensus seems to be we lived through an anomaly of an era never to be repeated of mortgage rates starting with a 1
The Low 2020:
Following the global pandemic of the Coronavirus the Bank of England reduced the base rate to 0.10%, a historic low.
The High 1979:
The incoming administration of Margaret Thatcher raised interest rates to 17 per cent, as the government of the time saw this as a critical weapon in combating inflation, which was steadily rising at the time. It did have the effect of reducing inflation, although critics noted its negative impact on UK manufacturing exports. Interest rates began to rise again towards the end of the 1980s, partly under the pressure of house price rises. Interest rates had gone from 17% in 1979 down to 9% in 1982, and were back to 14.88% in October 1989.
So 6% may seem like a great deal in the coming years.
It's hard to see it ever going back down to 0.10%.
But also, considering the size of people's mortgages these days, I don't see how home-owners or private renters could cope with rents and mortgages if the interest rate went to 17%
Following the global pandemic of the Coronavirus the Bank of England reduced the base rate to 0.10%, a historic low.
The High 1979:
The incoming administration of Margaret Thatcher raised interest rates to 17 per cent, as the government of the time saw this as a critical weapon in combating inflation, which was steadily rising at the time. It did have the effect of reducing inflation, although critics noted its negative impact on UK manufacturing exports. Interest rates began to rise again towards the end of the 1980s, partly under the pressure of house price rises. Interest rates had gone from 17% in 1979 down to 9% in 1982, and were back to 14.88% in October 1989.
So 6% may seem like a great deal in the coming years.
It's hard to see it ever going back down to 0.10%.
But also, considering the size of people's mortgages these days, I don't see how home-owners or private renters could cope with rents and mortgages if the interest rate went to 17%
crxdave said:
Is there any scenario where waiting out until next year would pay off? Current 2yr fix ends June 2023, looking at a £4k ERC and a £600pm increase if we remortgage now 
I have 2 mortgages ending July and August 2023, the rental has 50k ish left, the main house 240k ish left, both on 1.6ish%. I've spoken to my advisor and decided to see what happens, as the ERC and extra monthlies don't seem to make sense, just to lock in a current rate which is much higher than the base rate. Think I'll be looking at 450-500 quid extra on the main house, 100 quid ish on the rental, which is extremely worrying. Hopefully rates won't increase to 6% and something around 4% becomes the norm? Think I'll look at taking a short term fixed and extending the term to lessen the blow, I'll also have to put up the rent which I haven't done in 4 years. StressedEric said:
The Low 2020:
Following the global pandemic of the Coronavirus the Bank of England reduced the base rate to 0.10%, a historic low.
The High 1979:
The incoming administration of Margaret Thatcher raised interest rates to 17 per cent, as the government of the time saw this as a critical weapon in combating inflation, which was steadily rising at the time. It did have the effect of reducing inflation, although critics noted its negative impact on UK manufacturing exports. Interest rates began to rise again towards the end of the 1980s, partly under the pressure of house price rises. Interest rates had gone from 17% in 1979 down to 9% in 1982, and were back to 14.88% in October 1989.
So 6% may seem like a great deal in the coming years.
It's hard to see it ever going back down to 0.10%.
But also, considering the size of people's mortgages these days, I don't see how home-owners or private renters could cope with rents and mortgages if the interest rate went to 17%
I was speaking with my mum about this situation. Following the global pandemic of the Coronavirus the Bank of England reduced the base rate to 0.10%, a historic low.
The High 1979:
The incoming administration of Margaret Thatcher raised interest rates to 17 per cent, as the government of the time saw this as a critical weapon in combating inflation, which was steadily rising at the time. It did have the effect of reducing inflation, although critics noted its negative impact on UK manufacturing exports. Interest rates began to rise again towards the end of the 1980s, partly under the pressure of house price rises. Interest rates had gone from 17% in 1979 down to 9% in 1982, and were back to 14.88% in October 1989.
So 6% may seem like a great deal in the coming years.
It's hard to see it ever going back down to 0.10%.
But also, considering the size of people's mortgages these days, I don't see how home-owners or private renters could cope with rents and mortgages if the interest rate went to 17%
She said back then when they got mortgages they would only consider my dads salary even though she was a slightly higher earner!! They could also only get 3 times the salary and 20% deposit. I remember a mate of mine took out x6 salary 100% mortgage back in 2006!!! Mental. Didn’t end well for him either.
nunpuncher said:
The big question now is. If you can only get c5% at best how long do you fix for? Not sure I'd want to commit to that for 5 years.
That is the big question. Might not come down but hopefully won’t get much higher or a lot of people will be in a world of pain so no real advantage to lock in 5% for 5 years unless there are no exit fees then what is there to loose? Fix for 5 and if they come down you quickly change. I’m sure someone was talking about a 10 year fix with no exit fees on here. BoRED S2upid said:
That is the big question. Might not come down but hopefully won’t get much higher or a lot of people will be in a world of pain so no real advantage to lock in 5% for 5 years unless there are no exit fees then what is there to loose? Fix for 5 and if they come down you quickly change. I’m sure someone was talking about a 10 year fix with no exit fees on here.
We fixed for 5 years at 3.25%. IF it ever gets lower again then we are in a position to take out more money and pay off the higher rate mortgage with that. Something to consider if it’s an option. lizardbrain said:
nunpuncher said:
I'm not smart enough to understand how all the interconnecting things that control the economy influence the interest rate but all I know is that the ACTUAL BOE base rate hasn't changed and the rates now being offered by mortgage providers are quite a % over base rate than what they normally would be. With the mini budget being back pedalled, the new cabinet hopefully learning it's lesson and the pound now back to where it was before all this madness, could we be in a situation where folk have possibly jumped the gun or is it the energy crisis all over again?
I don’t know either but usually look to the international picture in such cases. And most countries with similar inflationary pressures are heading towards higher interest rates. So, in simple terms people in HSBC/ NatWest are running the numbers - how much do we need to charge Joanna Bloggs to make it worthwhile lending her the money, rather that the UK government? And the UK government wants to borrow lots and lots of money ATM
Aiminghigh123 said:
I was speaking with my mum about this situation.
She said back then when they got mortgages they would only consider my dads salary even though she was a slightly higher earner!! They could also only get 3 times the salary and 20% deposit. I remember a mate of mine took out x6 salary 100% mortgage back in 2006!!! Mental. Didn’t end well for him either.
Interesting, I bought my first house on a 100% mortgage in 1988 for £48,000. I was earning about £12,000 then (wife had a baby so not working), so 4 x salary. Interest rates were about 10% (I think). Within a year interest rates had risen to 15%.She said back then when they got mortgages they would only consider my dads salary even though she was a slightly higher earner!! They could also only get 3 times the salary and 20% deposit. I remember a mate of mine took out x6 salary 100% mortgage back in 2006!!! Mental. Didn’t end well for him either.
I moved to bigger house about 6 years later and didn't make a penny, the house was sold for what I bought it for (I think, it was a while ago).
StressedEric said:
The Low 2020:
....
But also, considering the size of people's mortgages these days, I don't see how home-owners or private renters could cope with rents and mortgages if the interest rate went to 17%
You need to remember, this is all about a small fraction of a minority of people who have high income multiples.....
But also, considering the size of people's mortgages these days, I don't see how home-owners or private renters could cope with rents and mortgages if the interest rate went to 17%
In the scheme of things it's not 'home owners' generally.
So it's not like unlimited gas prices which Liz wouldn't let happen because it would affect the majority of people.
The other thing is, historically, interest rates have spiked, but not stayed above about 10% for very long, so most of the people affected probably have some savings to absorb the peak. Also inflation is significant. In the late 80s bunfight, a couple of years of pay rises and promotions made a huge difference to the young people with mortgages.
We weren't 'all in this together' back then. Less so now I reckon.
People in their 20s mostly got sod all sympathy from smug people in their 30s who'd bought nicer houses for 50% less.
This time around, people with mortgage problems are going to be caught between renters who think being offered a mortgage would be a nice problem to have, and older people, more careful people, luckier people etc who think the problems are mostly self inflicted.
Set against a vast number of people who would think interest rates of anywhere between 5 and 10% were a 'good thing'.
StressedEric said:
Interesting, I bought my first house on a 100% mortgage in 1988 for £48,000. I was earning about £12,000 then (wife had a baby so not working), so 4 x salary. Interest rates were about 10% (I think). Within a year interest rates had risen to 15%.
I moved to bigger house about 6 years later and didn't make a penny, the house was sold for what I bought it for (I think, it was a while ago).
Should have added this was mid 70s. 1980s my parents said sod it and lived abroad earning similar to UK but in a much cheaper country. I moved to bigger house about 6 years later and didn't make a penny, the house was sold for what I bought it for (I think, it was a while ago).
Bit of a coincidence the day bankers bonuses are uncapped mortgage rates quadruple & still heading north dispite the sterling & gilt rates stabilising after a short lived wobble.
Imagine if the government announced they were uncapping the drink drive limit, how many days you think before that got equally out of hand.
Imagine if the government announced they were uncapping the drink drive limit, how many days you think before that got equally out of hand.
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