To be terrified about mortgage

[melodypondisasuperhero]

We finally managed to get our first mortgage last year and now this is happening. Our rate is 3.09% which runs out in August, currently the follow-on rate is 5% but I imagine this will go up several times before the end of the fix. We could manage 6%, probably just about 8%, but any higher than that and I really don’t know.

AIBU to be terrified? Or am I missing something?

Is it just me? BUT I thought the purpose of voting was to get a majority government that would set the framework of the British economy - NOW IF YOU BELIEVE what television news is saying … rising interest rates are because of banks, money lenders and the markets who don’t like the budget - So what’s the point of voting if the financial services industry can cause such 😏havoc for millions therefore bypassing elected MPs?!!!

It's their reaction to policy.

If anyone of any political persuation had enacted this policy the markets would have reacted identically.

That's the importance of receiving a mandate from the population, not just a party membership comprised, for the most part, of pale, stale, elderly males.

(*) persuasion

Can anyone advise me please? Do we know if mortgages are actually going to up or is it just rumours?

I've tried to work it out on the mse calculator and Ive put the correct figures in eg how much mortgage, what percentage, what term etc but it's saying we are paying less than we do. When I try to up it to 8% it's £300 more 😱 does that sound right? We are on a fix until next summer I think so too early to change it.

Mortgage have gone up, and continue to do so. Where this stops is unknown, however, the analysts expect to see mortgages rates of around 6% by next summer.

No one can say whether that increase is likely to be correct unless you say the amount of the mortgage. If you owe £10,000 it’s ludicrously high. If you owe £10 million, it’s ridiculously low

Mortgages have already gone up substantially. It is likely they will climb further.

The way I understand it is that the base rate is expected to rise to 6% which would lead to a mortgage rate of 7.5%. Some fixed rate mortgage deals are higher than that already. A woman on Question Time last night said she's been offered 10.5%.

Our mortgage would be thousands a month at those levels.

Which calculator are you looking at?

There were 30 year council housing waiting lists in the 1980s and in the early period no assured shortholds/properties to let either. However I do not mean things are easy in 2022. They are hard too.
AuntSalli, the LImitation Act 1980 is complicated. I have had banks claiming after 20 years (in one of my client's cases) because first it was executed as a deed which makes the 6 years 12 years and secondly the debt has been confirmed in some way during the 12 years which set the period running again and much else. Howeve ryou are right that as a general principle if you owe a normal trader a debt and there is no deed and no mortgage usually in England you are free of it 6 years later.

I call BS on that woman on QT. That or she has massive adverse credit and is a real risk to the lenders. Some of the bottom of the barrell lenders are maxing out at 7.25% at 90% LTV.

So 10% is an outright lie. More scaremongering

The 10% rate thing is utter bullshit
A lot of lenders haven't released rates yet but had a quick look at Natiowide and theirs are in the 6% region. This is for a 95% LTV first time buyer and they are all fixed
I am so cross that the mainstream media are able to publish such utter crap yet again

Yet it makes headlines, without any research into its validity. Only outcome is more worry and stress for people based on factually incorrect data.

Just to point out that just because lower % deals exist it doesn't mean that everyone can get that rate.

People who work in industries likely to go bust or make redundancies in the recession caused by our government's mismanagement of the economy may struggle to get a fixed rate at all.

I agree. I was watching when the woman said about the 10% rate. I knew that didn't sound right and there must be more to it. Yet no one on the panel even asked about her circumstances e.g. bad credit/small deposit etc. Just scaremongering and bad journalism.

Yabu. The norm is for interest rates to go up as well as down.

I have access to every listed mortgage rate, it does not exist. They are not priced liked personal loans.

commercial finance is different, and rates could be anything, as they are individually listed.

the current highest 90% mortgage has a 7 at the start, and that is with a real bottom of the barrel lender.

10.5% does not exist as a rate. Full stop

@fromdownwest well said and agreed!

What sort of rates are people being offered coming off of two or five year fixes then? From under 2% to what?

@verdantverdure

4.45%

About 4.5% currently.

Even though the base rate is expected to be 6% in a few months? That seems charitable of them.

It’s what I was offered by Lloyds this week.

The budget was an absolute own goal but the weakening £ is somewhat in keeping with other currencies because of the $usd strengthening.

For months the rates here have been going up. Mortgages are already at 6% and 8-10% is being talked about as the expected peak. It’s all about controlling inflation, which is extremely difficult to do. The issue with the budget was the market stalled because of the pension funds employing strategies which were I’ll thought out. It’s incredibly hard to position yourself against long term liabilities when the fund size is decreasing.

How this fool of a chancellor still has a job is beyond me. You would hope this budget was shared with the BOE and discussed. Anyone with a GCSE in economics could have told you it was a bad idea to lower taxes while inflation is high and increasing. I heard his motto is ‘make shit happen’. That’s not how you lead an economy.

Did your advisor not test for wriggle room? That you could afford the rat at the end of the short term fixed arranged for you and then a bit of room should things change?

Can you cut back in other areas of luxury type spending?

Someone explained elsewhere that the banks have already obtained a large amount of money at a certain rate. They apparently then lend out that money as mortgages at a rate that gives them a reasonable profit. When that money runs out and the banks obtain a different tranche of money at a higher rate, that’s when rates for the consumer jump up further.

I think that’s how it was explained, anyway.

It was BS for a more obvious reason.