Re mortgage emotions
Discussion
Hello All
I was just wondering if anyone is coming up on their fix rate ending soon ? Mine is up in November 2023 . If you read any article in the FT then the comments, it’s all serious doom and gloom 6% + BOE rates heading our way .
I guess my question is what are peoples thoughts on 2/3y BOE rates ?
And is a 3.25%ish 5y fix now a screaming bargain ?
Thank you in advance for any replies .
P.s yes we all had in coming I know .
I was just wondering if anyone is coming up on their fix rate ending soon ? Mine is up in November 2023 . If you read any article in the FT then the comments, it’s all serious doom and gloom 6% + BOE rates heading our way .
I guess my question is what are peoples thoughts on 2/3y BOE rates ?
And is a 3.25%ish 5y fix now a screaming bargain ?
Thank you in advance for any replies .
P.s yes we all had in coming I know .
Who knows, but some research suggests the BoE rate will peak around 2.5-3% over the next 12-18 months then stabilise to thereabouts or decline slightly.
That being said, the last two years have been more than a little testing, including the last six months, so even a crystal ball might ask questions.
We just fixed at a little over 3% for five years (2 year rate was the same while the 3 year rate was higher- which is telling in itself). Our current rate (1.84%) ends in Jan 2023.
That being said, the last two years have been more than a little testing, including the last six months, so even a crystal ball might ask questions.
We just fixed at a little over 3% for five years (2 year rate was the same while the 3 year rate was higher- which is telling in itself). Our current rate (1.84%) ends in Jan 2023.
Much of the recent rate increases (from lenders as opposed to BoE) are down to the intense workloads and currently 4 lenders have stopped taking new applications altogether until they clear the applications they already have. We currently have a situation where lenders are almost competing to not get the business, rather than competing to get it and they put their rates up to stem the flow of business coming in. If the market slows (or they could take on more staff to deal with it) then you may see them start to compete to get the business again, which usually pushes rates down.
Just re-mortgaged two properties in the last month, thankfully the new rates were agreed before the recent 0.5% rise. On our house I have gone from 1.54% to 2.94% and fixed for five years.
My other property is a BTL, that has increased from 1.61% to 2.84%. I am a bit bored of having this mortgage and having to remortgage all the time (and pay the associated fees) so I am planning on paying off 10% in a few weeks, and another 10% as soon as the new mortgage kicks in. This one I have fixed for two years as it is a smaller mortgage and I am hedging my bets a little just incase rates fall in the next two and a half years. I plan to clear this mortgage as quickly as I can now.
Both new rates start on January 1st so I am enjoying the last few months of low interest rates.
Pretty annoying that this is going to be costing us hundreds of pounds a month for nothing.
My other property is a BTL, that has increased from 1.61% to 2.84%. I am a bit bored of having this mortgage and having to remortgage all the time (and pay the associated fees) so I am planning on paying off 10% in a few weeks, and another 10% as soon as the new mortgage kicks in. This one I have fixed for two years as it is a smaller mortgage and I am hedging my bets a little just incase rates fall in the next two and a half years. I plan to clear this mortgage as quickly as I can now.
Both new rates start on January 1st so I am enjoying the last few months of low interest rates.
Pretty annoying that this is going to be costing us hundreds of pounds a month for nothing.
I am not qualified to give advice, and I will not do so. I will however give an opinion.
If the rate you can fix at will give you peace of mind for five years, allowing you to sleep soundly and not worry about your ability to pay, but the possibly of 6% or higher would keep you awake at night then I would take the fix.
Worst case is you overpaid, but regard those overpayments not as not wasted money, but as insurance.
If the rate you can fix at will give you peace of mind for five years, allowing you to sleep soundly and not worry about your ability to pay, but the possibly of 6% or higher would keep you awake at night then I would take the fix.
Worst case is you overpaid, but regard those overpayments not as not wasted money, but as insurance.
Turtle Shed said:
I am not qualified to give advice, and I will not do so. I will however give an opinion.
If the rate you can fix at will give you peace of mind for five years, allowing you to sleep soundly and not worry about your ability to pay, but the possibly of 6% or higher would keep you awake at night then I would take the fix.
Worst case is you overpaid, but regard those overpayments not as not wasted money, but as insurance.
That's a good way of looking at it.If the rate you can fix at will give you peace of mind for five years, allowing you to sleep soundly and not worry about your ability to pay, but the possibly of 6% or higher would keep you awake at night then I would take the fix.
Worst case is you overpaid, but regard those overpayments not as not wasted money, but as insurance.
LittleBigPlanet said:
Turtle Shed said:
I am not qualified to give advice, and I will not do so. I will however give an opinion.
If the rate you can fix at will give you peace of mind for five years, allowing you to sleep soundly and not worry about your ability to pay, but the possibly of 6% or higher would keep you awake at night then I would take the fix.
Worst case is you overpaid, but regard those overpayments not as not wasted money, but as insurance.
That's a good way of looking at it.If the rate you can fix at will give you peace of mind for five years, allowing you to sleep soundly and not worry about your ability to pay, but the possibly of 6% or higher would keep you awake at night then I would take the fix.
Worst case is you overpaid, but regard those overpayments not as not wasted money, but as insurance.
Would be a different story now!
Panamax said:
To my mind a 2 or 5 year "fix" on a 25 year commitment has always been pretty pointless.
Some people who think they've protected themselves are probably going to get a very nasty shock when their current fix expires.
What other option would they have?Some people who think they've protected themselves are probably going to get a very nasty shock when their current fix expires.
A base rate tracker? Then they’d be paying the increased rate regardless…
Panamax said:
To my mind a 2 or 5 year "fix" on a 25 year commitment has always been pretty pointless.
Some people who think they've protected themselves are probably going to get a very nasty shock when their current fix expires.
Yes thx that’s kinda my point . We are entering shock territory . Some people who think they've protected themselves are probably going to get a very nasty shock when their current fix expires.
btdk5 said:
Panamax said:
To my mind a 2 or 5 year "fix" on a 25 year commitment has always been pretty pointless.
Some people who think they've protected themselves are probably going to get a very nasty shock when their current fix expires.
What other option would they have?Some people who think they've protected themselves are probably going to get a very nasty shock when their current fix expires.
A base rate tracker? Then they’d be paying the increased rate regardless…
TX.
Terminator X said:
btdk5 said:
Panamax said:
To my mind a 2 or 5 year "fix" on a 25 year commitment has always been pretty pointless.
Some people who think they've protected themselves are probably going to get a very nasty shock when their current fix expires.
What other option would they have?Some people who think they've protected themselves are probably going to get a very nasty shock when their current fix expires.
A base rate tracker? Then they’d be paying the increased rate regardless…
TX.
Panamax says fixed rates are pointless. Why wouldn’t you fix when base rate was 0.5%?
richardxjr said:
I once fixed for 5 years @ 10%. Yes really! Thankfully was IO on £56k so a few % either way didn't make much difference really.
Would be a different story now!
Not as bad as that but my now mrs and I were signing up for our first joint mortgage in September 2008. The place was a wreck, needed lots of work done and wanted the the peice of mind of set payments. We went for a 5 year fixed can't remember the rate but was 7% or higher. We then watched rates plummet. From the commentary at the time many suggested rates would go up and lending tighten. Would be a different story now!
We've since benefited from lower rates and over paid when we could and paid off the mortgage this year. I think over the lifetime of the average mortgage you'll win and loose with rates and it will balance out.
I haven't a clue a clue what will happen with rates. Hiking rates will squeeze a lot of people, it's whether doing so is better or worse than curbing inflation.
a311 said:
richardxjr said:
I once fixed for 5 years @ 10%. Yes really! Thankfully was IO on £56k so a few % either way didn't make much difference really.
Would be a different story now!
Not as bad as that but my now mrs and I were signing up for our first joint mortgage in September 2008. The place was a wreck, needed lots of work done and wanted the the peice of mind of set payments. We went for a 5 year fixed can't remember the rate but was 7% or higher. We then watched rates plummet. From the commentary at the time many suggested rates would go up and lending tighten. Would be a different story now!
We've since benefited from lower rates and over paid when we could and paid off the mortgage this year. I think over the lifetime of the average mortgage you'll win and loose with rates and it will balance out.
I haven't a clue a clue what will happen with rates. Hiking rates will squeeze a lot of people, it's whether doing so is better or worse than curbing inflation.
Panamax said:
To my mind a 2 or 5 year "fix" on a 25 year commitment has always been pretty pointless.
Some people who think they've protected themselves are probably going to get a very nasty shock when their current fix expires.
I disagree, I fixed at 1.64% for 5 years in February this year on the thinking that the base rate was only going to increase.Some people who think they've protected themselves are probably going to get a very nasty shock when their current fix expires.
I'm aware that in 4.5years the rate will almost certainly be higher, but in the meantime I'm saving myself a fair amount of money in interest payments each month and over paying as and when I can.
btdk5 said:
Panamax says fixed rates are pointless. Why wouldn’t you fix when base rate was 0.5%?
If the margin for the fix is small enough it can be worthwhile at any rate of interest, low base rate makes no difference. However, there may be fees at the start and potentially a penalty to pay if you want to get out early.Key point is the mis-match between 2 years of security in the context of 25 years exposure. You still get the same pain in the end - simply delayed for a couple of years. And it may be a nastier shock getting that pain in one big hit rather than gradually sucking it up as rates increase.
But at the end of the day its horses for courses.
a311 said:
Not as bad as that but my now mrs and I were signing up for our first joint mortgage in September 2008. The place was a wreck, needed lots of work done and wanted the the peice of mind of set payments. We went for a 5 year fixed can't remember the rate but was 7% or higher. We then watched rates plummet. From the commentary at the time many suggested rates would go up and lending tighten.
I did the same but it was for two years. We had moved into our house two years before with the mortgage based on two peoples wages, my daughter had only just been born and I was the sole breadwinner.That was a horrible two years, every time the rate went down everybody at work was bragging about their tracker mortgages and how they were paying in the low hundreds whilst my interest only mortgage was over £1K. I just kept my head down and didn't say anything, this at a time when I needed the money more than ever as we only had one salary.
I was literally counting down the remaining months and phoned the bank as soon as I could to remortgage at a considerably better rate. One of the questions they asked was if I could afford the mortgage, even though it was well under half what I was currently paying.
A not very nice two years, that probably cost me getting on for £20K when I REALLY needed the money.
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