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 know lots of medical staff who are on amazing pensions they have beautiful £900,000 house is that are mortgage free. They have been for awhile.
they will be providing deposits for their children and if they need to go guarantor on them as well due to the initial lower earnings they will do that

I agree but it won't keep them in work (although they will pay tax till the day they die) NHS pensions are incredibly gold plated and linked to the RPI. Doctors who are in their late 40's and 50's bought at 24/25 (free acomadation in your house officer year, ash cash and "drug rep dinners") it was a thing not to touch your 1st year's salary (£25,000)so you could use it as a house deposit.

Fair enough, time will tell.

Are you actually a doctor?

I nearly did, but I might needing to sell to go back overseas to help my Mum & the ERP on the 10 years was too much. I ended up fixing for 5 & will just have to hope it all works out ok.

I agree with PPs who think the most likely next development for interest rates is to stay flat or to go up, but not to down, from here, especially in the next few months.

I do not know whether this is possible, but if you have any credit card debt outstanding, then it may be worth rolling that in to your mortgage if possible, ie increasing the mortgage by enough to release a bit of cash and get rid of the credit card debt. That is because credit card debt almost always carries a higher interest rate than mortgage debt.

In terms of extending the mortgage duration versus accepting higher monthly payments, if your mortgage allows some penalty-free overpayments and if your cash flow is stretched currently, it would probably be a good idea to extend them mortgage unless that would extend it out so far that you expect to be retired before the mortgage is paid off.

Regarding mortgage overpayments, once you have a bit of emergency cash and have cleared credit card debt, they are generally a good idea because every subsequent mortgage payment will be that little bit more towards lowering debt principal outstanding, and that little bit less in interest payments to the bank. Overpayments, if you can make them penalty-free from time to time, are also a way to shorten your mortgage repayment time by a little bit.

Yes qualified in 2000, what I describe above mostly relates to those a couple years older.

@Goodskin46 - interesting but absolutely not my experience of doctors 'a couple of years older'. Never come across your thing of not touching the first year's salary in particular. Different circles clearly!

Perhaps they didn’t need to save the first years salary due to the whopping great parental support most of them receive having recently come out of private education. You don’t meet too many poor are working class doctors do you ?

All the doctors I know have serious £££, not just their salaries but tremendous family wealth behind them.

I've just noticed that the 10 year fixed deal we booked with Lloyds a few months ago is no longer available. Looks like they aren't doing 10 year fixed any more unless you already bank with them, which we don't.

Their 5 year deal 3 months ago was around 1.86% for us, now it's 3.2%.

I’m worried about the ageing population too. In the next few decades, we’ll have more older people who’ll be on state benefits- pensions.

There will ultimately be be less people paying into the system and more taking from it.

Is the government thinking about this? Or will they just keep raising the state pension age?

Is the government thinking about this?

Nope, it's scary that there's no planning

"There are now more people aged 65 and over in England and Wales than children aged under 15. The number of people aged over 64 has surged by 20% over the past decade in England and Wales, to 11.1 million people. Nearly one in five people are aged over 65."

Or will they just keep raising the state pension age?

Life expectancy has stalled.

Imagine the top ups needed for generation rent, the lack of homes available to sell for care home fees.

it’s a ticking time bomb

Like I said before, I think that's likely to be a London thing. I know at least half who were comprehensive educated and do not come from wealthy families. As I said, different circles.

This is a very serious problem but sadly, the government have no interest in long term planning. They can only think in terms of one election cycle and what will get them voted back in/ advance their own careers.

www.bloomberg.com/news/articles/2022-07-05/uk-households-can-withstand-rates-of-up-to-5-boe-says?srnd=premium-uk

Households can withstand BASE rates of 5%, days BoE. That means mortgage rates of 6-7%.

Canada's interest rate up by 1% today and NZ up by 0.5%. Guess it depends what the FED do on 27th now. BoE meeting is on 4th August.

Bring it on. If you want to shift those houses folks you got to get the price down nowadays.

i'm surprised prices haven't fallen tbh with the increased rates & cost of living. I assume those are in the position to buy are fairly well insulated.

Cost of living rises/interest rate rises has barely got started yet, I would imagine many people with fixes ending soon will be cacking it, especially if they overstretched themselves debt wise.

The base rate is still incredibly low if you look at the history. I had a mortgage and paid it off over 15 years with a rate that was never below 5% and at one point 15%.

I don't see them going any way other than up for the foreseeable future.

Well you certainly can't have high house prices & high interest rates. Well perhaps with much higher salaries.

Yep, too low for too long, and too much money printing, the central banks have got us into a right old pickle, and there are outside forces at work now as well (China property collapse/Russian aggression) that are out of their control.

I said previously I think they will go back to 6 which is what they were in 1999 when I brought my house

I know I didn’t have the 9/15% of earlier years. But I don’t think many reliese how lucky they are to be so low for
past 5/10yrs

The thing is if I remember correctly you used to be able to get mortgages below the base rate so when they crashed some people on Trackers were effectively earning on their loans. Now it’s base rate plus. If it goes up
more do you think we might see a return to sub base rate mortgages?