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.

Could base rate go to 4%, some media are now saying that?

Capital Economics forecasts are quite well regarded. They're currently forecasting rates to hit 3% next year.

Very often your own lender will secure a rate switch earlier for you, so please contact them.

If you need further assistance, then PM me.

You've deffo done the right thing! I'd even look at 10 year dependent on circumstances.

I would be happy with that
Put it this way (and yes I know it's not a mortgage!) I wasn't sure if to go for 1 or 2 year fixed energy. Idiot me chose 1 year....

@Blondeshavemorefun I think I remember 17%, I'd just fallen pregnant with DS!

I saw that today too. Would put mortgage rates back to their long term average of 5-6%.

How old is ds @tomatopsste

indef think they will go to 5/6% over the 5yrs or So

@Blondeshavemorefun he's 30.

Agree rates will go up further!

Would put mortgage rates back to their long term average of 5-6%.

If mortgages do go back to their long term average then house prices are going to have to stagnate significantly for a long period of time until the disparity between prices & wages catch up. It's a good thing except for the fact many in society rely on ever increasing prices to fund life, retirement etc equity release is getting bigger every year.

If interest rates go up to even half of 5-6% in the near term which looks likely, house values will fall because people won't be able to afford them. They won't just stagnate.

Hence it wont happen

You always have an answer don't you!
The base rates are widely expected to rise to around 3% next year which is what I said (half of 5-6% is 2.5-3%). But I guess that can't happen now because you said it won't. 😂

I can't see it happening either tbh.

Plus lots of people don't have mortgages or low LTV & those that do are likely to be on fixed. Plus people will prepare for it now. We've fixed for 5 yrs & will overpay/save.

The gov will do everything in their power to prop it up

I definitely think that's what they'll aim to do, we've seen deliberate and repeated intervention to keep prices high over the last decade. Just not sure whether there's anything left in the bag of tricks now. Basically they'll try but will they succeed?

@hatchyu - what won't happen? Rates won't go up to 2.5-3%? They are widely expected to do just this. Others on this thread are guessing at 5-6% which would be catastrophic for many.

The government have no further ability to prop up the housing market at this point.
Prices are set at the margins.

Rates won't go up to 2.5-3%?

That's very likely hence everyone trying to fix! I originally responded to the point about 5/6% and huge price drops.

So hard to predict - we got mortgage offer in sep/oct 21 for mortgage starting in feb 22, 5 year fixed, 0.92%. Suggests banks also have no real idea what's going to happen or are just price cutting each other and accepting risk of making loss.

After many, many years of being at rock bottom (which was highly unusual in itself) they are starting to creep up. I don’t see them coming down for a long, long time.

The MPC won’t let them go too high if they can avoid it (I hope) because they know it’ll hurt mortgage payers, but right now their bigger priority is trying to keep a lid on inflation before it gets out of control. Just shop around and look for the best fix you can find.

The gov will do everything in their power to prop it up

Trouble is they've been doing this for years with endless schemes which just produce an artificial market, and sooner or later there has to be an adjustment

Bearing in mind historical averages I don't understand why folk feel rates won't return to around 6% or perhaps even more. Obviously it'll be difficult, but were near-zero rates really expected to last forever?

What I actually said was that, even with rates rising to 2.5-3%, I would expected falls in prices rather than stagnation.

Some people have fixed their rates for 2-5% but obviously not everyone. There will be some people who won't be able to afford their mortgage due to the rising cost of everything else in any case. Like I said, prices are set at the margins so you don't need 50% of the housing stock to change hands for prices to fall.

The government have no further ability to prop up the housing market at this point.

Stamp duty cuts for downsizers or FTBs.

Lenders are stepping in to pick up the help to buy market/shared ownership

New products eg Habito who will lend 7 x income or 30/40 yr mortgages.

More joint products eg where equity is used in family home.

What I actually said was that, even with rates rising to 2.5-3%, I would expected falls in prices rather than stagnation.

I'm simply disagreeing. I don't see big falls at those levels.

I think the housing market is ridiculous, I'm not saying it's a good thing. It's bad economics to have so much money tied up in property & ever rising prices benefit very few but that's the system we have.