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.

It’s going to be more to do with the fact that wages are gonna rise faster than the interest rates are so effectively if the interest rates are at 3% and you’ve got a 5% pay increase youre up on the deal. Yes you’re paying out more but you’re only more too and you’re paying more tax so everybody is a winner.
The reason house prices have rocketed over the past two years has been because the writing was on the wall that the plan was to inflate away the debt and therefore anybody with any cash has been looking to put it into property.

The economists seem to be predicting 2.75% in 2023, peaking at 3.0% in 2024, then falling.

Personally I don't think they're going to hit 5-6%. The aim is to reduce inflation and, if people don't receive inflationary pay rises, these rises should temper inflation. I remember interest rates of 8%, but given current property prices relative to income levels, I think small increases will have the desired effect of limiting spending.

Is this BOE base rate or mortgage rate predictions?

I'd expect even longer than 2024 if Liz Truss becomes Prime Minister and goes ahead with her suggested tax cuts or non-increases.

Is this BOE base rate or mortgage rate predictions?

Sorry, should have said. Base rate.

It looks like interest rates will rise a lot more before they fall.
Maybe by 2026 things will be looking a bit better.

It's not a question of luck at all @Blondeshavemorefun . In fact, I would say the exact opposite. The central banks have controlled interest rates and kept them extremely low (or negative) so that the debt pile can keep increasing. They are aware that there is a serious risk of collapse if interest rates rise.
The lv ow interest rates have pushed up asset prices so have benefited those with assets (mostly older people). They have been to the detriment of younger people because the prices are so high that many can't buy/ struggle to do so/ are effectively forced into huge amounts of debt.

@MrsSales - you would expect the mortgage rates to be a percentage point higher than the base rates so, if the base rate rises to 2.75% by the end of 2022, the mortgage rates would likely be 3.75-5%.

Truss' economy adviser thinks 7% base rate would be 'no bad thing' 😬 twitter.com/IanDunt/status/1550813765381267456?t=Ypgb-r867sREM7lO3zLdRQ&s=19

I bit the bullet and paid my ERC to lock in a ten year fix. It's a gamble but in these uncertain times I feel it's the best thing for me.

I think if you can get sub 3% locked in for 10 years, it's a good gamble.

I agree with you. I locked in 2.72% on Thursday.

This rate is no longer on their website, which was updated on that day, and the cheapest ten year fix is now 3.45%!!!

My guess is that at the next meeting in August there will be a minimum 0.5% increase

@GreenLunchBox

My purchase fell through. I've got until 31st December to complete on something else. My mortgage offer is 2.49 for 10 years.

I suspect the same.

That's a fab rate. Have you found anything else and are you confident?

I'm chain free. Average time to complete is 11 weeks, according to my solicitor. I just need to find something that's small chain / chain free. There does seem to be more trickling on to the market but a lot is overpriced and tends to get reduced after a few weeks. I'll start to worry if I haven't found something by September.

Many older people relied on interest for income, and I can assure you the low interest rates haven't done them any favours.

@Lineala

I agree. There are 2 sides to everything. However, on mumsnet, the focus is always on "young families" who will struggle when interest rates go up.

That’s a good rate. I think wise to stick for long

Well they have 'done them a favour' in the way that I have described, artificially raising the prices of their assets. However, I agree that some will have 'missed out' on returns on their cash that they might have enjoyed or relied on previously.
Obviously, this applies to younger savers too, those who might be saving for a deposit on a house, for instance, who have clearly not benefited from a gain in assets They have therefore lost out in both ways.

Agree that those rates for 10 year fixes seem very good and are fast disappearing.

Many older people relied on interest for income, and I can assure you the low interest rates haven't done them any favours.

Young people would definitely benefit from higher rates to help save a deposit...

lots of changed in five years so it can go either way . people are comparing this with 90s but that time houses prices were not that high and cost of living was not that high. with cost of living increases, disposable income drops and economy goes into recession. I am sure then bank of england will drop rate to keep it flowing. I am optimistic in five years things can come back to normal prior to covid 19. otherwise we are all fucked , i gotta massive mortgage 300k and currently fixed at 1.14 till 2027

just curious how much was your mortgage

"Normal" rates are around 6%. Can you cope with that when your fix ends?