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 been rumoured they will go up by three quarters of a % in the coming months

You mean three quarters of a % on Thursday, don't you?

This calculator from moneytothemasses.com looks pretty cool: app.nous.co/refix

It's to help you work out if it's worth paying an ERC if you're in a fix that's ending soon and grabbing a fixed rate now

You mean three quarters of a % on Thursday, don't you?

do you know it’s going to be all in one go on Thursday? Could be 1/4 % on Thursday and a further rise later?

@ivykaty44

Fed FOMC announces its decision today I think. The recent US inflation figures were higher than expected, which may lead to the Fed doing a 1% rise.

Various UK figures have looked pretty soft recently, so the BOE does not want to really raise aggressively. But if they do not keep pace with the Fed and the ECB then the value of the pound will plummet (further) and that will further stoke inflation and cause a few other unpleasant effects that are too detailed to go into here.

From what I have seen the markets have been pricing in a BOE 0.75% rise for the last couple of weeks (85% chance IIRC) :

www.reuters.com/markets/europe/gradual-boe-rate-rises-have-not-tempered-price-expectations-mann-2022-09-05/

I doubt there will only be 0.25 tomorrow, unless Silvana Tenreyro somehow manages to persuade everyone else to see things her way. It will be a minimum of 0.5 imo.

Fed went for 0.75% and the pound dropped 1/2 cent pretty much instantly.

I'd be very shocked if they don't do a minimum of 0.5% tomorrow.

Given the tumbling £, they will be forced to raise at least 0.5% although 0.75% would be a stronger signal to markets what with Truss/Kwarteng's shocking fiscal policies.

Shocking indeed
I read today she wants to cut stamp duty 'to stimulate growth'. I can't even

Growth according to Truss (and various others) seem to involve borrowing lots of money and hoping it gets spent, nominally increasing GDP. It's such nonsense and has done nothing to improve quality of life for most of the population.

Growth according to Truss (and various others) seem to involve borrowing lots of money and hoping it gets spent, nominally increasing GDP. It's such nonsense and has done nothing to improve quality of life for most of the population.

Part of my job involves speaking to fund managers and they've not been positive about Truss opening the public purse again. And I say that as a Conservative voter.

@GreenLunchBox

I suppose the idea is that if they can goose the housing market again then that will get spending and push up the economy. When people move they employ lots of trades and buy new stuff.

However, I just don't see it having a major effect myself. Peoples discretionary spending is being destroyed by energy price rises, food inflation, mortgage rate increases. The government don't have any control over any of these things, all they can do is subsidise. My guess is that this means that the money available for mortgages is going to collapse, and that in turn is going to collapse the housing market.

The Fed are saying that they are going to do what it takes to bring inflation under control, and that means we are going to have to follow.

I don't work in finance nor anything at all related nor do I vote Tory but I'm sure you are right @red4321 that the markets won't like even more unfunded borrowing. The fall of the pound speaks for itself.

Up 0.5% - could have done with a bit more I think but maybe same again in November.

Absolutely the right decision to go with 0.5%. They needed to wait and see what happens tomorrow, then revisit forecasts in November.

For the ops query, I know this was a while ago but others will be in this situation. Given that she has young children in probably expensive childcare as it always is at that age before school, then wouldn't an idea be to switch to an interest only mortgage for a few years, 2-3 tops, and then switch back to the proper payment after? It's not a brilliant solution but as childcare costs will then decrease after they go to school, you've then got more money towards the mortgage and given yourself breathing space in-between.

Very poor choice IMO. Not really sending the signal to the markets that the BOE is willing to do what's necessary to bring inflation under control, especially after strong rises from both the Fed and the Swedish central bank.

That coupled with the mini budget tomorrow which could well announce a whole new load of extra borrowing, for me the outlook for the pound is not looking good - which of course is further going to push up the cost of living.

Still, the vote was close at 5 (0.5) 3 (0.75) and 1 (0.25).

Given that she has young children in probably expensive childcare as it always is at that age before school, then wouldn't an idea be to switch to an interest only mortgage for a few years, 2-3 tops, and then switch back to the proper payment after?

(Apologies, I can't remember if I've posted this already), I've always had interest only mortgages but the criteria have become increasingly stringent over time.

On the last two occasions, the lenders have wanted our cash and liquid assets to cover the full mortgage amount, even at a 25% loan to value. I'd never have qualified for my first mortgage nowadays.

It makes houses cheaper, that is the biggest thing most people buy.

Not just houses. Commercial property, business rent, which means it businesses will pay less out for property E.g nursery / childcare, takeaway shops, pubs, vehicle repairs, corner shops.

Part of your regular weekly shopping basket is a 2-bed semi in Surbiton?

No, but your mortgage payment is.

Rates predicted to hit 4% early next year.

For many reasons mentioned above. I can’t believe they only raised by 0.5% yesterday.

We are falling to far behind the FED and the international markets work in dollars so we need a strong pound.

Quicker pain for consumers in terms so rate rises will be far better in the long run than protracted pain and rampant inflation.

4% is still not that high.

Imagine making big financial decisions based on being able to borrow 6 figures at such a low interest rate.

Borrowers have nobody but themselves to blame here.

Swapping to interest only when possible may be a good option for some for the foreseeable.

I agree with all of this.

We need at least another 1% increase Christmas, ideally more.

What people can’t see, beyond their own mortgage payments (understandable really) is that is the best solution on the long run.

A weak pound will make things so much worse overall.

Not really. 0.75% would have been better.