I set mortgage rates AMA

[Tempname1234567]

I set the rates on mortgages, it’s kind of interesting and pretty eye opening. Just that with the caveat that anything here isn’t a replacement for real financial advice but feel free to ask me anything :)

what quals? It’s a real mix of none (they’re the best in my experience, people who’ve worked their way up. The people I’ve worked with who have economics degrees are. A bit too big for their boots, think they know it all but of course this is a huge generalisation. I know one former colleague PhD astrophysics

What training do you have? It sounds like you got into the company in some sort of mortgage admin capacity and fell into that particular role?
Who makes the decisions? What qualifications does your manager have?

No I didn’t get into the role through admin. I did a graduate scheme at one of the big banks which are very competitive btw. So no I didn’t ’fall’ into it. I’ve worked across many lines of business in finance, lastly savings which is similar to mortgages so moved across as it’s better paid. So i have a decade of experience as my training.

i have mortgage qualifications, but they are advice ones.

even as a manager I made the decision as to individual rates, more so as snr manager. But it’s always socialised and endorsed by snr management.

So what was your first job when you started in the first bank?

Whats your opinion on the long period of very low interest rates we had from approx 2008 to about 2021?

the grad scheme, started as an assistant manager in product and proposition

It was a symptom of the economy, BR fell heavily in 2008.

helped many people buy a home and pass affordability when house prices were climbing. Rate shock is real though. Especially in the rental sector

What do you estimate for November? I think that's when I need to renew my deal and I think I'm currently on 4% or just under. Would you guess it would be more or less then?

It’s a fools errand to try and predict the market BUT lenders have already passed in some cuts, to my mind, it’s a good time to PT, could get better but ultimately could get worse.

for my own personal mortgage was expires end of the year, I have 3.72% for a 2 year- I felt that was pretty good so I cancelled my 3.88% deal to move to that rather than wait it out

I know no one can say for sure, thanks.
As long as it doesn't increase I'll be happy. Well, I'd prefer a reduction but about the same price I'm paying now will be ok.

When does your deal expire?

from experience I’d say it’s more likely that swaps will stay broadly flat or tick down a bit til the MPC meeting on 18th BUT that could change, stranger things have happened.
but even if they do go down a bit whether or not your lender passes it on to you is another story. I’d see what rates your lender has, you can lock one in now and keep checking and if they go down, cancel and get the cheaper rate

It expires next November I think.

Oh next November? Christ knows, I thought you meant that it ends tomorrow.

not a clue for next year. The cpr curve looks like o/n Sonia will be down next year BUT there’s too much that could happen between now and then to make any sort of educated guess

any more questions? With mortgage rates rocketing thought mortgage questions may be hot on people’s lips lol

Hi and thanks in advance for your view - I fixed for 5 years at 4.32 last November. Coming off 1.73 it seemed a big hike! Do you think rates are likely to sit around 5% for a fair while? Shoot up further? Stabilise lower? What's the midterm picture as you see it?

I need to change mine this month, will be calling my mortgage lender in the next few days. My last one was 1.9 for 5 years and I’m so glad we took it. But am I best fixing for 2 years now, or for longer?

Do you think more mortgages are going to be pulled over the next couple of months or has that slowed now? Dh and I have been renting for 20 years. Various things have got in the way of buying and we finally had a deposit and have been viewing houses and this happens! Our deposit is only 5% so we were really relaying on those low deposit ftb mortgages.

even before trump, the yield curve was going down to about 3.25% and then picking back up, so rates were no expected to come down to what they were before, or even close.

I’ve said before it’s a fools errand trying to predict the market especially with the Iran war, which is making big big movements on swaps On a daily basis. But I imagine we’ll see a BBR increase this year, maybe around the summer. It’s likely that rates will stay as they are for a little while yet. Sorry

to caveat this is my opinion based on the data as I see it right now, and I’m not a trader or an economist

youre better off trying to not game the market and pay a rate you’re comfortable paying.

lets put it this way, when rates spiked in 2023 my 2% 5 yr fix was up, my rate went up to 4.9%. I fixed for 2 yrs because I was confident things would come down. I was right and refixed for another 2 at 3.75% (start of this year) because I thought things would come down further… now I’m not so sure.

if you want the flexibility to try and win or break out of a deal, try and erc free tracker.

Lenders will only pull them because of volatility and that they can’t reprice fast enough. We pulled a lot for instance but have now reintroduced things back and that seem to be the trend, lenders are reintroducing products (higher rates)

this is take th edge of housing prices though, so unless you’re going for a new build (don’t with a 5% deposit esp rn) you maybe able to save some money on the house prices itself

@Tempname1234567 thank you for replying, that is a little but reassuring. It's not a new build and has been on the market a month now with no offers. We have no chain, they have no chain, our mortgage in principle covers the full asking price and we are wondering how low is too cheeky.

Nothing ventured would be a bit more compelling if it had been on the market for a while

Thanks for the interesting thread @Tempname1234567
I would like to ask if you think that property prices will start to decline now?

Are interest only mortgages going to be harder to get in the next year? My fixed rate ends in 2027 and I need to find another one. Long story!

Think it’s likely especially if rates stay high which means affordability is lower. Now I don’t think that means home owners will be in negative equity just that a home that’s say on for 575 might actually go for more like 550