Anyone understand mortgages and if rates will fall or rise soon?

[Hightideattheseaside]

Fixed rate ends in June. I’ve looked around at the deals etc. I just don’t fully understand how rates are linked to the Bank of England interest rate and if they will go down or up before June.

Also wondering what house prices will do. The rate we can get now is based on our house value being quite high so LTV is 58%. What if prices drop? I assume we will be offered a worse deal as LTV will be smaller? I don’t know how big a LTV has to drop by to impact the rate you are offered.

Also wondering with Trump coming in if the markets will get tetchy and things will go up. But I don’t really understand it all in depth if I’m honest and I don’t have time to educate myself.

Anyone out there got any advice? Get a deal now or wait it out? The is the worst part of being an adult.

I'm not an expert but rates are set individually by the banks, they're not mandatorily linked to the base rate but of course in reality they are because of course it's all about profit for the bank, if the base rate falls you can expect the rates banks offer to fall too and vice versa. To be honest before June my personal expectation is there won't be a huge change, it may fall slightly and there may be a little volatility depending on what happens with Ukraine/Russia but I doubt huge huge change is on the horizon. I might be wrong of course, things can change suddenly either for the better or worse but there's no magic way to predict it or of course everyone would be doing the same thing. My guess is that rates will fall gradually over the next couple of years, probably not to the lows of 1.5%-2% that you could get a few years ago but maybe to more like 3% being the average. So my own choice (again me only) when our deal was up recently was to fix for 2 years now and see where we are in 2027 when hopefully situation is no worse if not better.

Again I would doubt house prices will drop or rise enough to make a huge difference to your LTV, under 60% is good but not life-changing, we have a similar LtV and most of the deals we were looking at were for up to 70% so you'll likely be fine if prices change slightly. I think for me assuming you can remortgage now without penalty, I'd see what deals there are out there periodically and if a good one comes up that you can lock in (close to or under 4% and/or with a good cashback/reward bonus deal) then it may well be worth it, otherwise sit tight until closer to the time, I doubt you'll get much better but it probably won't be worse?

If you don't already have one, I'd recommend using an independent mortgage broker. They'll be able to search the market for you and find you the best deal.

Totally agree with this.

I've used L&C mortgage brokers twice (after them being recommended here, and in the Guardian!)

They're both independent and free. Can't argue with that I reckon! 😁

https://www.landc.co.uk/

Thanks @NoctuaAthene for your detailed reply. It feels like rolling the dice at a casino a bit! I guess the rates aren’t going to plummet any time soon so I guess we would t end up paying masses more if they drop a bit after fixing.

I used L&C for my first ever mortgage and they were good. Used Habito last time who were also good. Habito coming out with 4.13 with NatWest at the moment. But we could get slightly lower if we went direct.

Unfortunatley you have to expect interest rates to rise and fall. The issue is we had such a long period of very low interest rates people think it’s the norm. Really mortgage rates should be about 5 to 6%. In 1999 I had a 5% rate. Then we had a tracker mortgage and it was 0.5% above Bank of England base rate, their base rate was 0.5%.

In my lifetime that’s the cheapest I have ever had as a rate, when I was very young in the 1980’s it was 13%. I know housing was cheaper then before anyone jumps on me. I was earning about 7k PA as a nurse at the time.

Go direct to Nat West if they can get you a better deal, why wouldn’t you?

Yeah I guess we will just have to suck it up. Just wondering if they will drop enough to make a significant saving in the next couple of months. Or just lock it in now.

Mortgage offers are valid for 6 months aren't they? So you can apply now and if a better rate comes along in the meantime you can apply for that. That's what I did last time mine came up anyway.

My 5 year fixed rate is up in September so I have started casually looking at rates and looking at any trends etc.

I believe you can lock in current rates for up to 6 months with some banks? So you could take the NatWest offer as an option and then look again closer to the time and if there is something better then jump to that offer if it is?