To ask when interest rates will likely go down?

[AnxietyLevelMax]

We are close to remortgaging for the first time. Long long time ago i was happy and excited thinking we will be paying less by £200 min per month. Right now our rate would change. We still have 5 more months before we can remortgage so we can end up paying even more than now.

how long do u think it will all last?

i dont know how we are going to do that, we cant save anything now because we are paying debts, childcare is expensive as hell, everything is expensive, we barely make it month to month paying debts off but it will still take us 1.5-2 yrs min. We have no financial cushion. I am worried as hell, cant sleep worrying if something happens we dont have any extra money.

I meant right now our rate wouldn’t change (it is quite high though)

I wish I could give you hope, but I can’t. I’d look at another way of getting some extra cash. Hugs.

If you’ve paid off a chunk of your mortgage over your fixed period the hopefully you won’t be paying more.

have you looked at mortgage calculators with your lender?

They won't change for a long time yet.

I'd say they're going to creep up well into next year. If the base rate gets up to 3.5% next year then mortgage rates will be around 5%. 5% is the long term average.

Are you on a fix that ends soon and will you go into your lenders SVR or will you take another fix?

i Don’t think they are going to drop. I am worried they will go up higher

we’re coming to the end of one of our deals (remortgaged to release funds last year) I’ve just fixed that for 5 years on 2.75% and it was on 2.11% which is an extra £30 per month

I used to work for a huge investments firm and keep and eye on what they say- yesterday they said they expected interest rate increases which prompted me to look at my deal and see if I could switch yet which I could even though it’s not ‘up’ till October

this is a quote from what I read yesterday
Base rate is now expected to hit 3% as we enter next year, so we are really only beginning to feel the burn of the Banks’ tightening cycle

and so I’m sorry not the news you wanted but I’m in the same boat and keeping a close eye and next month I’ll be fixing my other product and I’ll be happy if I can get a sub 3% offer

I hope someone comes along and tells me I’m wrong

Check what your contract allows, we could change our rate a few months before our fixed term ended for no penalty. We were eligible to change early about two months ago and jumped on a new fixed rate as soon as we could.

Rates have been unusually low for ages. I'd say a rise was overdue, I'm not expecting rates to fall for a while now.

Interest rates have been at an all time low. I doubt they’ll ever be as low again. I remember having a 15% mortgage, that lasted a couple of years, so many people lost their homes.

I don’t think they are going to drop. I think they will likely go higher. Interest rates still seem low to me, but that’s because I remember when they were double figures, and they hovered around 7% for years.

I don't think they will ever reduce.

From 1950 to the end of 2008 UK interest rates were NEVER below 3%, and a rate of 5% was considered good. It was often much higher. Interest rates were cut at the end of 2008 due to the global banking crisis. It is actually a surprise that they remained below 1% for 13 years.

Yes, this. Historically rates have been much higher than they are presently and there's nothing to suggest they're heading back down any time soon. I think there was a split vote on raising rates this time, but those who lost actually wanted to raise rates by more. That tells you everything really.

They'll be increasing further rather than dropping, I think a lot of people are in for a very rude awakening.

@Justthisonceharold

https://www.theguardian.com/business/2022/jun/17/bank-of-england-inflation-interest-rates-huw-pill?CMP=ShareiOSAppp_Other

The message coming from the BoE seems to support your view.

They won’t drop again I doubt.They have been very low for over a decade ( since 2009). They are at 1.25 per cent now.

I think in the next 5 years or so they will go up to 4 or 5%. We’ve been fortunate that they have been so low for a long time.
Ultimately they need to go up, but not as much as they did in the early 90s , when millions went into negative equity.

They are only going to go up and go back to a more realistic rate. Its be artificially low for so long

Can you managed your mortgage at 7%. My first in 2007 was around that amount so I wouldnt be surprised if that becomes close to this again.

People who have stretched themselves thinking rates will be low for ever are about to be a world of pain,especially in the winter with fuel increases.

We have be spoilt for so long with low rates,cheap food and goods.

Agree. I think they’re only going up.

can you consolidate debt into mortgage and fix rates for 5 years to try and cushion the blow and give yourself predictability?

you do then have to not use the credit card if you do that.

Really do you think that’s helpful to a woman who is telling you she’s struggling to sleep at night over money worries?

Not until inflation is consistently below 2%, so not for a few years if ever (as pp said, we were at historic lows before). Sorry.

We have be spoilt for so long with low rates,cheap food and goods.

We've barely seen any food inflation for 30 odd years. I saw some figures earlier and was astounded. Things have suddenly changed though.

I agree. I think they will rise more then possibly settle somewhere between where they are now and 2% in a couple of years (I have no rationale for this!)

we have had artificially low credit for so long some of us think it’s normal when it isn’t.

I think there might be a few people in trouble when it comes to remortgage time sadly.

@Nothappyatwork

Should the OP bury her head in the sand and wait for things to get worse?

If you have leas than 5 months to go then other mortgage providers will let you 'book a rate' to remortgage to when your deal is up. I would definitely look in to that asap as the rates available now will be far better than what is available in 5 months time

I’ve no idea when they will drop, what will probably happen is the wage inflation will catch up with actual inflation and then we will have stagnation. But the overall result of this is it the debt will be inflated away which is not a bad thing for anybody who has a mortgage you just need to make sure you keep servicing the debt you pay something every month.

I’d love to see some evidence as to when interest rates hit 15% for a couple of years please …. my understanding is it was a matter of days before everything was brought back under control again.