Mortgage rates could reach 7% by christmas

If you'd said last year that we'd be at 6% you'd have been booed off the thread! No one was predicting any such thing then.

Think you have two options: look to fix now and accept you’ll pay some erc which will put up your bills

or wait as close to July as you can, when they are still predicting inflation will come down by next summer. you can put yourself into a fee free fix with a broker (recommend L and C) and then get them to check the market once a month until you’re due to remortgage

Our fix is up February 2024. I'm dreading it.

Inflation is predicted to come down summer of next year, and 2025 is still considered as a year for ‘significant growth’ in the financial services sector. Significant growth means that people will have more disposable income. Rates cannot stay this high

Bloody hell, really? I remember 15% but never REALLY thought it would happen again. We are fixed until July 25 as got a five year fix. So it's going to be hold out and pray I think.

Back to Martin Lewis show. He asked the Chancellor Jeremy Hunt the question: When will mortgage rates come down?

Jeremy Hunt referred to experts from the Bank of England who have forecast that it will take about a year for rates to come down.

Martin also asked: Will anything more be done to give practical help to assist struggling homeowners?
The answer was that this is under review. Hunt said "this is not the end of the story in the help we can give people"

Martin asked what will happen to mortgage prisoners - those stuck with inactive lenders (lenders who are no longer lending) who typically took out a mortgage before 2008 when the rules were more relaxed and can't switch because they wouldn't meet today's affordability criteria. They may be charged over 9%! This percentage is ONLY in reference to mortgage prisoners, before anyone gets excited or anxious.

Doesn't mean people can just pluck figures out of the air. Why stop at 9%? Why not predict they could rise to 15% again??

It is quite scary isn't it ? if you took out a 25 year mortgage on 250k at 2% then you would be paying less than a grand a month, at 6.65% you are going to be paying another £600 a month.

On to the new Mortgage Charter which comes into effect from August.

Two automatic options to help people (often just a click)
Extend mortgage term (eg from 15 years to 25)
Switch to Interest Only (stop repaying the borrowing, just cover the interest).

You can't be in arrears and both last 6 months.

We’re in the exact same situation as the first time buyer who tweeted him the question. 200k repayments with 95% mortgage over 40 years = 900 a month. And I think we’d only get 35 years as not many lenders do 40 with 95 LTV, so it would be even more

It’s just not the time is it. Shared ownership doesn’t make it cheaper just means you need less of a deposit.

Thanks for this @Twiglets1. He didn't happen to predict what he thought rates would go back down to once they do fall, did he? Ie back to the 1/2% range?

Jeremy Hunt referred to experts from the Bank of England who have forecast that it will take about a year for rates to come down.

Because the the BoE are so brilliantly accurate with their predictions. I'm remortgaging at the end of 2025 so I bloody hope that they come down by then!

Anyone who had a mortgage is 2008 should be close to paying it off by now if they haven't already.

Oops posted too soon, this is why this might not be the greatest thing for first time buyers, suddenly buying might not be all that cheaper than renting and you need to pass the stress testing at that rate, remember everything else has gone up massively as well.

They showed a graph but only briefly. It was going downwards but not steeply so not as far down as 1/2% I don't think. I've recorded it as well as watching it but I don't think rates are predicted to go lower than about 4%

He's said this recently about rates:

"What's tough for anybody under the age of 35 to understand is the last 15-odd years from 2007 onwards of super low interest rates is the anomaly. If you look in a historic context, the rates we have now is the norm roughly for the prior 300 years. We've now had a 15 year anomaly so there is no guarantee that interest rates will drop down to those super low levels.
"That is not the same as me saying they won't but you can't say they must"

Sorry should have said, the money will go into savings account just now until it makes sense to use it, even if that’s to pay off as a lump sum after the 10 years. It’s just that the money is earmarked for mortgage rather than anything else.

We were viewing houses but we’ve given up, we’d be paying 600/700 more a month just to say we own a house the exact same size or smaller than our secure rental. Owning would be lovely but we’d be sleepwalking into financial hardship

People on benefits are eligible for Support for Mortgage Interest which covers 2.65% pts of your interest but is repayable as a loan.

People with serious problems or in arrears are strongly advised to speak to their Lender. They should offer you help.

We got a 5 year fixed at 1.99% in 2018 so are coming to the end now. Managed to fix early at 4.8% so our payments will go up nearly £500 come November which felt like the best option consider variable rates. It's all v depressing!

That’s sickening

Oh yes, I forgot that bit.

We just bought and fixed for 5 years at 4.28%, but I have no certainty rates still won't be high by the time our fix ends.

We are exactly these people. Our 2.24% 5 year fixed term is ending in March and we had our first child last year, DC is 9 months old. I have reduced my working hours from 60 hours a week to 24. It's going to kill us.

Sorry to hear that. Maybe you could think of it like you've given up for now as the time isn't right for you.