Mortgage rates could reach 7% by christmas

@Twiglets1 I had never missed a payment before (mortgage, energy, council tax) but had defaults on credit cards. They've already defaulted so can't get worse and that was 2021 so fingers crossed

I think the less dramatic scenario (several years at 6% ish) is far more likely.

And I say that as someone who is clearly a pessimist as I ran through what repayments would be at 10% and 15% before buying my house, and still fixed for 10 years this time (so children will all be young adults /late teens by time it runs out in 2028). I honestly thought I was a normal level of cautious .

Yes fingers crossed. It's got to look good that you've been making all the mortgage payments regularly

Haha that is pessimistic! I have never considered what payments would be at 15% even though I did once have a mortgage that rose to 15%! It felt like a complete anomaly even at the time, though and didn't last long.

If they have any sense not in the UK, it's going to be awful for many reasons for most of their working lives.

We have always tried to be "work to live" it's changing though isn't it, it's much more live to pay bills with each passing week.

Thank you @Oddsockday for changing the title of your thread, it is honestly really good of you to listen to my concerns about it. I'm sorry I didn't express them as politely as I should have done.

I guess because I had been homeless with two kids when I left ex (albeit only for a couple of months) I never wanted to be in that position again. But yes I can see I was being far more cautious than most! Still, I love my house and each child has a bedroom so we didn't need a bigger one

And I guess the cautiousness has served me well in this instance. I really feel for people worrying about keeping a roof over their heads.

I think the less dramatic scenario (several years at 6% ish) is far more likely

but why do you think that? What knowledge do you have over financial experts?

fixing with a 10yr you would have overpaid for the first few years but quite a significant amount. It sounds like your 6% ‘premonition’ is your wishful thinking to justify a 10 year fix

Yes so do I feel for people worrying about keeping a roof over their heads.

Your caution is very understandable given your experience with homelessness.

Agree we ' overpaid' but it was worth it for the peace of mind that I would know our bills till the children were adults. It was a price worth paying whatever happened and definitely worth every penny in this climate.

I work in a related field, so yes , am coming from a fairly informed place (although admittedly nothing is certain).

On a personal level I don't care what actually happens, I have the peace of mind whether I am financially "quids in" or not. And due to aforementioned homelessness that is worth a lot to me

On a professional level it's my job to pay close attention to all the analysis and plan for the worst case scenario but also anticipate the more likely scenarios

Thank you x

@SweetSakura uhuh, that old chestnut

That’s the premise of a long term fix isn’t it, it’s not about ‘winning’ ie making sure you’re going to get the lowest rate in the long term as it’s pretty unlikely a 10 year fix at 6% will be the best ‘value’ over the next 10 years . What it is is stability and predictability

Absolutely, I bought my house 21 years ago, the peak was July 07 when it reached 5.75%, however our mortgage was for £50,000 (got us a 3 bed detached, but NE, undesirable town in a slightly nicer part of a dodgy part of town), so not in anyway comparable. Even with the 6% of now it has little effect on us (actually our payments reduced last interest rise)

The unnatural base rate for so long has meant the housing market has got out of control and people are now paying the price.

you’re allowed to say you’ve seen/heard it in the news, please don’t feel like you have to back it up with proof. Yes it’s helpful to have a link but you can’t be expected to get your phone out & record it!

Sorry you’re worrying, it’s a really crap time.

Did you have an unpaid county-court judgment? I think they drop off the record after six years. Depending on timing and how rates go you might even glide onto a lower rate than you're paying now.

Maybe multigenerational living will have to become more normalised but that depends on the boomer/Gen X parents having space to accommodate, I guess

@FlyingSoap

Isn't this the historical norm? A hundred years ago you would have had a family of 6 living in a 2 up 2 down.

People seem to think that living standards can only ever go up, but that's not true. Maybe we're heading back to the good old days!

People seem to think that living standards can only ever go up, but that's not true. Maybe we're heading back to the good old days!

I'm pretty sure that there is a certain segment of the electorate who will not be happy until we've got food rationing, the work house and rickets.

I'm in the strange position of the higher the interest rates go, the more likely I am to keep my job. Currently in a temporary role involving working for a company selling off its property assets and once they are sold off I'll be out of a job. They are struggling to get buyers now so hopefully I'll be extended. Just a weird silver lining I guess.

that was how my DH was raised (in London) and he is 33. Family of 6 (4 kids) in a 2 up 2 down. Except the 2 up and 2 down had a kitchen extension and half the bathroom got carved up to make a box room (which is called the third bedroom though it can barely fit a bed and wardrobe). the kitchen extension meant what was once the dining room was DH's sister bedroom (and later our bedroom when i moved in).

MIL still lives there today and honestly I did live there with them until we bought our flat so we were still 6 in a 2 up 2 down (as DH's mum got divorced) for a good 3 years. I think lots of first & second generation immigrant families still live like that in London and the other big cities as they have big families and still occupy the same terrace houses that FTB childless couples purchase.

This makes for informative reading for any wanting to discuss 15 percent rates many moons ago:

https://www.leedsbuildingsociety.co.uk/_resources/pdfs/press-pdfs/press-releases/housing-is-now-at-its-least-affordable.pdf

“Mortgage rates of 6.43% today are equivalent to a rate of 25.7% in 1980 - housing is now at its least affordable since records began.
As details emerged yesterday that the average 2-year fixed rate mortgage is now 6.43%, Leeds Building Society has looked at historical data to calculate the equivalent mortgage rates.
Interest rates of 6.43% may seem lower than the mortgage rates of 15% which borrowers were paying in 1980 for example, but there is a critical difference: surging house prices, driven by a lack of supply and historically low interest rates since the financial crisis of 2008, and the commensurate increase in household indebtedness, mean that the 6.43% mortgage rates of today are equivalent to a rate of 25.7% in 1980 (see Editors’ notes for calculation).
In 1980, the average UK house price was around £21,000 and mortgage costs accounted for 11.3% of disposable income (see Editors’ notes). Today, with the average 2 year fixed rate mortgage on offer to new customers currently standing at 6.43%, those figures are around £292,000 and 45.1% respectively.
Housing is now at its least affordable point since records began. The average home currently costs 9.1 times the average local wage compared to 3.5 in 1997 (Source ONS). This particularly impacts young people. Rates of home ownership amongst 25-34 year olds have collapsed over the last 30 years. In 1996, home ownership levels for this age bracket were 65%. By 2016, the level for this age group had fallen to 27% - giving them the label of ‘generation rent’.”

And this was October 2022.

@AuntyBumBum nope, no CCJs, no bankruptcy, never missed an essential payment or had an IVA

She didn’t ‘pluck figures out of the air’ though did she, it was in sky news. Stop fixating on it when she’s apologised. You’re like a dog with a bone.