Mortgage rates could reach 7% by christmas

So does anyone know what effect all if this will have on actual house prices themselves? If any..

You must have been happy when you heard 9% mentioned in reference to stress tests!

The point is that there's not a lot of difference between "predicting" and plucking figures out of the air!

We've been swapping about fixed-rate products on various mortgages for many years. Like everyone else, every time we do it we have to take a guess about where rates might be in two or five years time in order to decide how long to fix for. We always look at "predictions". And in hindsight we'd have done just as well tossing a coin (or indeed plucking figures out of the air!).

@GSDmom It’s truly awful & really scary. Could you maybe downsize? I know it’s a rubbish and possibly not practical solution

So glad we fixed 10 years ago, till the end of the term, till the end of our mortgage. Dh said tonight if we hadn't we'd be paying an extra £500 right now. And more to come. I have sympathy for others.

yep that’s what I gather too

The title of this thread had to be challenged and I've done it. Nothing more to say on that subject.

Reading today they are expecting a slump of up to 15% but not a full market crash. Slump will be h2 24 onwards and crucially, 2025 is still predicted as a year for growth. Don’t get me wrong it’s fucking shit right now and will be next year too. But these things are cyclical. The Bank of England seem to only have 1 tool at their disposal, the BR. The economy will go into recession h2 24 and after inflation is brought back down the only way to stimulate the economy again is to lower the base rate so lending is cheaper and people are less likely to save based on the low returns.

Prices set by supply-and-demand ratio. Big jump in interest rates will increase supply (forced sales) and decrease demand (demand is defined as willingness and ability to pay). Prices drop.

What I’d be interested to know is what’s going to happen now first time buyers who would’ve been buying, can’t? Ie uni graduates who might’ve bought a studio flat, a young professional couple who wanted to buy a terraced house. Where do they live if they can’t afford these rates? Because there’s going to be droves and droves of them. Surely that’s a problem on its own

That's amazing, I didn't know you could do that. I'm very jealous right now. LC was amazed with our 5 year fix

It's just I found your title rather alarmist and I'm worried about the anxiety it will give anyone that takes it too literally. Do you admit now that you were mistaken in claiming that mortgage rates could reach 9% by Christmas?

You could really damage someone's mental health by scaremongering like that.

I think you're right - a dysfunctional housing market has knock-on effects all through society and the wider economy. I guess many young people will end up continuing to live with parents, families won't be started, careers that need moving away for won't be had?

We have been renting during the pandemic until now (we returned from living abroad and sold our house in that country). Last month we decided to buy again and got ourselves a mortgage broker. 15% deposit and 8% rates was the first offer he got us! He's now found us a 6.4% rate but it's meant finding a 20% deposit. It's meant we're now buying a house that's less than half of our affordability. The housing market is really going to suffer.

Exactly… but then there are massive consequences especially if families are started later or not at all. Like that literally will affect all of society. Or you’ll have a situation where only the most affluent & most deprived have children, and no one in between does - which will again be chaos. Maybe multigenerational living will have to become more normalised but that depends on the boomer/Gen X parents having space to accommodate, I guess

I'm paying 5.5% fixed until 2026 but I'm with an adverse credit lender
Hopefully my credit will have improved enough by then to get a standard mortgage with a similar rate. Maybe?

Just looked at my lenders website and for adverse credit (depending on the level) the rates are 7.45% now

As long as you keep making the repayments with no arrears then it should definitely improve your credit rating.

I would imagine it’s more stressful for people that rent privately.

That's decent of you (not being sarcastic). I'm sorry I've been obnoxious to you.

My Mortgage is 1.44% on a £400k 2 year fix due to end next May. At current rates this will go up over £600 a month. And I’m getting divorced. Joy.

on another note, renters will likely feel the pain even more. In just the last week one of my friends landlords has upped the rent £200 and announced he is selling by Xmas and another two of my friends who had secondary flats they rented out are selling….

we’re all going to feel the Tory brexit absolute cuntery pain

I know - and they won't even be around to see most of it once they get voted out next year