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.

Weren't you on another thread claiming you are more successful than Elon Musk?

There's plenty of evidence because it's history - just look at any article about historical interest rates 🤷‍♀️

They aren't going to come back down to the low rates they were up to a few months ago, not for many many years. They will keep going up for a while, then come down a little way off that peak and stabilise at a 'new normal'. I don't think anyone knows what that new normal will be but I will hazard a guess at around 4%.

High interest rates are bad for people who need to take on debt to afford things like a house to live in. They are good for people who have excess capital and want to be paid interest by those who need to borrow.

It's the latter category of people who are mostly in charge at the moment. They would like interest rates to be high but know that the general population can't survive the rates getting too high so the new equilibrium point will balance things to be as high as possible.

Er no … there goes your credibility at the window anyway….
there isn’t plenty of evidence whatsoever the interest rates were at 15% for a couple of years the facts of the matter are they hit 15.4% for nine months between February and November when they drop back down again not saying it was pleasant for those involved but it’s absolute bullshit to suggest that this went on for years and years before it was bought back under control.

Interest rates won't be going down any time soon. Can you take out a fixed rate now? You can get the mortgage 6 months ahead of your current rate ending. I am paying an exit fee and fixing for 10 years at 2.3%. My current rate is 1.96% and ends in 2024 so it makes sense to me for the certainty. Interest rates could be 5% by then and mortgage rates would likely be 7% in this scenario.

They won’t drop anytime soon - more likely to go up. Are you 5 months away from the term ending or 5 months from the point they’ll let you consider a remortgage? You can lock in with a new provider 3 months ahead of the term ending and sometimes 4-6 months ahead if you stay with the same provider (Santander were 4 months I think).

Another option you have is to increase the total term you remortgage over (max out to pension age basically). We were always advised to do this by an advisor years ago - you can still overpay as if you were aiming for 20 years (as an example) despite your term actually being 25 years. The rationale with this plan is that your agreed mortgage payment is the lowest it can possibly be to help get you through hard times with overpayments always being an option. Keep exploring options OP - there will be something you can do and it will make you poorly worrying about it all the time.

@Nothappyatwork

Nine months is a bit longer than "a matter of days".

I can remember when rates were 16%, people with mortgages were tearing their hair out. I hope we neve r return to those days. I think it will l be 2-3 years before rates stabilise with 7.5% being the peak.

I do think it may well be a futile wait for interest rates as low as they've been and I think you should definitely be thinking about fixing as early as you can.

NRTFH. You can fix a mortgage deal up to six months before your current one ends so act now to avoid paying the SVR and to find the best deal as rates are likely to continue to rise.

In the late eighties crash, my rate went to 13%. The 2008 one doubled my monthly payments. I am fortunate to no longer have a mortgage having sold my house in the first lock down (now that's a whole other horror story).

Made the mistake of fixing at that rates worried that it would go even higher; plenty of people did that. And banks were locking many into very high fixed rates, so yes it did go on for years. This is the the flip side of those cheap houses your parents bought; they actually paid a large proportion of their salaries for them, but as mortgage interest.

I think that you have missed the boat
Our fixed term expired in august 2022 but last October we remortgaged with a small penalty to get a decent 5 year fixed rate

My husband and I bought in 1987 and our interest rate was 14%, my Mum used to help me with the odd food shop/vet bill, we didn't have a penny to spare. My daughter hopes to buy next year, I'll be helping her I'm sure.

They won’t be too high for too long. We are fucked as a nation of they are. Paying interest on National debt alone will be a nightmare. I think they will go up this year, stabilise next year and then start coming down again once inflation starts to fall.

I agree with pp, interest rates will only be rising, I expect the next few months it will rise 0.50 pmth or there abouts, to help control inflation, not that small rises will be be enough to do so, but BOE are between a rock and a hard place. I can remember our first mortgage being at 12%. So for those that think it won’t happen, it has in the past and could happen again.

The 15% thing everyone goes on about happened around Black Wednesday in September 1992. I remember it well, I was 22 and had had just started a new job in London. My boss had just bought a new house and extended himself a bit more than he should have, so the day that the rates jumped from 10% to 15% was pretty memorable, I have never seen anyone look so ill in my life as my boss. It lasted for one day! The next day rates were down to 10%, and my boss narrowly avoided a heart attack.

Black Wednesday

After reading threads on here we paid a penalty and fixed early too. Supposed to be December, could fix with no charge from July. We paid the charge and have saved ourselves £8k even with the charge.
Thank God for Mumsnet spends £8k on recommended cleaning products

Our friend was over the moon in 2005 to have fixed his mortgage at 6%.
Weird that I remember that, but I remember everything!

Interest rates remain at historic lows.

15% is not that high if you lived through the 1970s

They can easily remain comfortably over 8% (with spikes much higher) for a decade or more.

It looks as if people are yet to grasp this. It's not going away, just like the OPEC fuel crisis of the 1970s didn't go away, and both are having an effect across the world.

I think they will increase & then maybe settle for a bit. I don't foresee double figures & I don't see the historic emergency rates we have had since 08.

Three years ago I fixed for 15 years with YBS. I was going to opt for their 10 year fixed but they had just started a 15 year fixed. I could have got a cheaper 2/5 year fix but wanted the certainty.

I did think I was absolutely barmy at the time but am very glad now.

While I don't think the days of double figure interest rates are likely, (and yes I remember my mortgage rate going up from 12.5% to 17.5% in one day), I think it is equally unlikely that the current exceptionally low rates will return. A slow rise to a more normal base rate (maybe 5%) over the next few years seems likely to me, resulting in a mortgage rate about 2% higher.

@alwayscrashinginthesamecar1 the one my parents generation talk about was more 81/82 and it went on a more than a day that interest was higher. The figures you see are average or bank of england base rate but of course individual mortgages might be base rate + x. My in laws were over 15% for 2 years due to their providers terms. Some people also fixed at that time too so the knock on was longer.

The current expectation is that rates will go to around 3 - 3.5% by the end of next year.