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 wouldn't surprise me if rates never return to these levels. I suspect tbat future economists will see this period of exceptionally low interest rates as just a blip against the more normal background rate of 4-5% (just as the exceptionally high rates of the late '80s and early '90s are viewed now).

@edwinbear

I got a 10 year fix at 2.49% in May. It's always a gamble fixing so far into the future but I remember when I got my first mortgage in the 2000s and 5% was seen as a good rate.

I agree with you. Over a decade of low interest rates has led to a population spending money like a drunken sailor on shore leave and stoked the ridiculously overheated housing market. Those days are well and truly over.

Sorry to disappoint but this is a forecast NOT a fact.
I wonder if you consider the BOE's forecasts in the last 12 months as fact?! Hopefully not.
They haven't really done too well with their predictions have they? The average poster on here was able to predict much higher levels of inflation than they could 18 months ago (that is if you believe what they actually say).
Personally, I think inflation in essentials will continue at present but will be countered by deflation in discretionary sectors as that is clearly set to fall, probably plummet. I expect the BOE will attempt some more QE at some stage but that cold cause hyperinflation and a plummeting pound so it would probably have to be reversed. They are pretty stuck at this stage and the situation has been of their own making, at least to some extent.

Sorry to disappoint but this is a forecast NOT a fact.
I wonder if you consider the BOE's forecasts in the last 12 months as fact?! Hopefully not.
They haven't really done too well with their predictions have they? The average poster on here was able to predict much higher levels of inflation than they could 18 months ago (that is if you believe what they actually say).
Personally, I think inflation in essentials will continue at present but will be countered by deflation in discretionary sectors as that is clearly set to fall, probably plummet. I expect the BOE will attempt some more QE at some stage but that cold cause hyperinflation and a plummeting pound so it would probably have to be reversed. They are pretty stuck at this stage and the situation has been of their own making, at least to some extent.

Since fuel prices have been a key driver of inflation, it's positive that wholesale prices have dropped over the last 8 weeks.

The RAC issued a press release earlier this week that petrol should have dropped by 20 pence a litre although only 9 pence a litre had been passed on, on average.

Thank you! I’ve used that tool and I’m definitely best staying on my current rate. I will check later on and also just factoring in my budget that our mortgage may be substantially more in the future.

god it’s bleak for finances at the moment when you’ve got kids in full time childcare.

Thanks for this

Although I think the BofE are crap at predictions and think it will be worse than they're saying.

This link has convinced me I'm doing the right thing paying the ERC and locking in a fixed rate deal

They are deliberately "crap" though, they don`t want to spook the horses too much too early is more likely. What level of base rate will crash the property market, what do you folks think?

Interest rates also affect property prices too. Historically low interest rates push prices up as people can borrow more.
Catch 22.

Yes, nearly free money for so long has allowed people to get very very silly about the value of property, it will be painful to watch the unwinding of this madness, and even more painful if you are directly involved in it via decades of mortgage debt.

Some people's grasp of basic economics is scary though.

I viewed two houses today. One is 500 one is 450. The 450 one is less because it's smaller.

I said to a friend earlier, I'm aware that I'm buying at peak and house prices will probably drop by 10% due to interest rate rises. She said well buy the one at 450 then, it's already 10% cheaper so won't drop by 10%.

She meant that you'll lose a smaller amount of money, surely (though I get that's not what she said)

Nope. I asked her to clarify and she said the one at 450 is already 10% cheaper than the one on at 500 so won't decrease in value any further.

She also said that house prices won't fall. I asked her if she realised interest rates have gone up and are likely to go up further and she said that she didn't know why that would affect house prices.

She has a mortgage with her DP.

Oh dear. That's not good!
There are so many people who think that demand is all about how many houses we are building in comparison to the population and so many people who think prices will only ever go up in the UK. The UK economy is so dependent on house prices which is frightening.

Oh gosh. With people like her around maybe there won't be a crash after all!

This UK housing situation really is so bad for people not on the ladder. We really need maybe a 10% drop and then for prices to stay the same for the next ten years while wages grow.

I think lenders will stop people like her borrowing too much. I think it's the banks tightening up on how much they'll lend due to interest rate rises. Some people would borrow millions if they were allowed. Then there are the more financially attuned who are stepping back and seeing what happens next / looking at affordability themselves.

I actually had to think about it for a while to understood what she meant there!

I don't know how long they were that high for, but I had a post office investment account which paid 12% interest in the early 80s. So I think we can safely say mortgage rates were higher than that.

I got petrol for 171p a litre this morning. It was over 190p a few weeks ago, I can't remember the highest price although I know it was nudging £2 for diesel at my local garage.

Yes diesel was nudging £2 a litre. It's £1.81 most places now. £1.69 at Costco (love them!😍)

Talk of 18% inflation next year, what level of base rate will be needed to tame that?

Citibank is predicting 7%.

Wow, that will be nice for the savings pot if banks pass it on?