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 have to say that I don't blame people in a net cash position appreciating higher interest rates. This may be particularly relevant for pensioners.

While those of us with a mortgage don't want interest rates to rise, they were unlikely to stay at their historically low levels for decades. Most mortgage lenders run affordability checks at higher interest rates.

Appreciate that rampant inflation is squeezing other costs as well, but ultimately we've chosen to buy properties and take on a mortgage, rather than rent.

I think the good times in my lifetime were from the late 90s until 2007. Then we got the recession, following the credit crunch.
We the had ten plus years of austerity , followed by a pandemic.
The pandemic will be an excuse for a whole generation to have to foot the bill.

Its fecking depressing. Some people have only ever lived through austerity and being poorer

What time is the announcement please? Anyone know? Notice the press are all predicting 0.5%.

I think this too. Not sure if it's because I was in my 20s from 1999 onwards and just had more hope and less pressure.

I think it's midday.

Yes - I wonder if younger (ish)people are more frightened of higher interest rates because they don’t realise how completely normal it was. My first property was very small and the mortgage was just under 6% and I was earning £35k. After mortgage and bills I had £65 a week to live off and I was entirely happy. I didn’t go out-out much but would buy half price bottles of wine and go to a friend’s house (London so cheap transport) for bolognese or pesto or have them to me, or picnic in parks. No children or anything to worry about.

the last decade has felt so cheap to me with these rates and I had no savings at all back then. I would guess the majority of people who can, have gone for a five year fix so can be a little cushioned against the rate rises for now, so be on 2% or whatever, and then plug any spare cash at all into a slightly higher paying savings account. Wages may rise like they did in the 70s.

I do appreciate that some people are really struggling and I try to be frugal myself as bills and food go up - but if I think of my in-laws in their HA flat, too much in cash for benefits, getting the state pension but their life savings of £80k earning them nothing and their anxiety over how long it will last them, an extra £300 a month would really really help them. They don’t run a car, they don’t drink alcohol or smoke, they don’t eat out, their one holiday a year is their annual weekend in Kent… there must be more like them. £80k between them after 80 years minimum of work between them, it would be nice if they could get something, without having to eat into it.

Smart money all seems to be on 0.5% rise now, I think my 0.25% guess was likely wrong.

The pandemic will be an excuse for a whole generation to have to foot the bill.

Yup. That's evidently the plan.

Anyone buying a house in the past two years should of really been looking at long term fixes 3y,5yr or even 10yrs because rates were at their lowest it was inevitable they would need to rise in the the future and it was best to lock in.

When I bought my interest rate was 3.69% so for me its only just getting back to that so from my perspective I don't see why people are so worried yet unless they borrowed too much and didn't allow for potential future rate raises. Lenders usually make sure you can afford some level of a rise, I know mine was based on going up to 5%

My new mortgage taken out a few years ago was absolutely stress tested. The affordability tests where they got the last 6 months’ bank statements from my current account and my p60s for the previous three years. Could I pay a remortgage at 5% and 7% on the subsequently shorter term if necessary and I was given the figures for monthly payment for that so I wasn’t blindly answering. Obviously I’ve paid that percentage before so I knew I could but even FTBs would be asked that I think? Especially, even.

BOE have just raised interest rates by 0.5%, as many were expecting.

news.sky.com/story/interest-rates-rise-to-1-75-in-biggest-hike-for-27-years-12665163

How do I claim my prize?

I think now that 0.5% is out there it will be 0.5% rises from now on at the next few meetings

I think now that 0.5% is out there it will be 0.5% rises from now on at the next few meetings

Agreed, the new 'normal' rise.

I don't see why people are so worried yet unless they borrowed too much and didn't allow for potential future rate raises. Lenders usually make sure you can afford some level of a rise,

Yes, that’s the problem. Too many people have absolutely borrowed too much. We’re at the last gasp of a credit bubble.

You see it on this site all the time: posters recommending that buyers ‘stretch themselves’, the extension of the normal mortgage term from 25 years to up to 40 years, the easy acceptance that they will be paying a mortgage until they are 70. Which, incidentally, is win/win for the lenders.

Not just that, but the threads saying, e.g., “we told the bank that we’d both be earning full-time salaries and that was the basis on which they approved the loan, but I fancy going part time or stopping work, and we haven’t completed on the house yet, will the bank find out?”. The responses were overwhelmingly, “don’t tell them, get your dream home!”.

There was an interview on World at 1 with a guy catastrophising about his SVR mortgage going up. What kind of idiot doesn’t have a fixed rate these days?

'Too many people have absolutely borrowed too much. We’re at the last gasp of a credit bubble.'

Totally agree.

Have also seen those sort of threads and this 'dream home' phrase used a lot. There seem to be a number of posters wanting to borrow to the max just before starting a family which has always seemed unwise to me. In the past it might have been fine, of course, people got away with this and interest only mortgages but not so much now.

Yes we saw a ridiculous mortgage broker who tried to persuade us to borrow another £500k. Utterly ridiculous and reckless and based on interest only mortgages. He was clearly v rich himself, I worry how many people followed his “advice”.

@SafelySoftly - he sounds like a cowboy. I wonder if these people are regulated. I thought giving financial advice was a regulated activity.....

Your post is spot on @Iamthewombat

@GreenLunchBox

Virtual beverage heading your way 🍾

You’d be surprised by how many people are paying the standard variable rate on their mortgages and don’t want to move off it. Some lenders even write to them to offer them lower rates with zero fees, or a low fee to switch. No response.

The other thing is, the fees for fixes have been climbing for years. Charging a big fee is a neat way of making the APR look lower and getting to the top of the ‘best buy’ tables. So some of the people on the SVR might have come off a deal and might not be able to afford the fees for another. It happens.

We have an SVR as we were lucky enough to go onto the Nationwide SVR when it was 2% above base rate. Been paying very low interest rates for years and luckily will have paid off in two years so it doesn't affect us as our loan value is small by todays standards and we overpay.

So we have actually saved a lot being on an SVR as the product was pulled years ago and all fixed rates were much higher.

the threads saying, e.g., “we told the bank that we’d both be earning full-time salaries and that was the basis on which they approved the loan, but I fancy going part time or stopping work, and we haven’t completed on the house yet, will the bank find out?”. The responses were overwhelmingly, “don’t tell them, get your dream home!”

Quite - and ditto the many posts crowing that the local market is "red hot", as if that's really helpful to anyone in the long term

And worst of all, when it all goes wrong, it's said to be the fault of absolutely anybody else ...

Equally it’s mortgage fraud. Banks won’t care if you’re paying however default, these people may find it’s not just the house they come for.

Equally it’s mortgage fraud

Yes, it is - and yes, it can have consequences some don't foresee

Try saying that on some threads, though, and you'll be told you're being "judgey" ...

If it’s not picked up on checks and slips through then it’s all well and good (still fraud). If they can’t pay and the bank looks deeper then they will be facing criminal charges and no hope of remortgaging. Some people just don’t think and it could well bite them in the arse now.