Do you think mortgage interest rates will continue to rise?

[Charlize43]

Am I being reasonable to fix my mortgage interest rate now at 5.39% for the next five years or do you think mortgage rates will go down soon?

I can't work out whether I'm being sensible or overracting due to media hysteria?

Some of my more optimistic friends are saying that this is a momentary economic blip while others are saying nail it now as better to be safe than sorry.

What would you do?

I reckon better to nail it down now and fix now, just in case rates rise further. That’s what I would do personally, just to avoid the risk that I ended up not being able to pay it in future if further rises were brought in.

I’d fix in your position.

it may not be the right thing to do but I believe it’s predicted that they will continue to rise until the summer. After that, who knows.

I guess it comes down to affordability. Could you manage 7% or 8% if it came to it?

We just fixed for 5 years but our interest rate is 3.15 %

We're in the same position.

I've noticed that rates for 5 year deals are cheaper at the moment than for 2 year deals. When we were looking a couple of years ago it was the opposite. This makes me think that the banks are expecting the interest rate to fall over the five year period, otherwise why offer cheaper rates over 5 years?

But ultimately no one can really predict the future, it's always a bit of a gamble and it depends on how much you value the security of fixing for a longer term. We'll probably fix for 5 years on that basis.

I think that’s a high rate to fix at but it does depend on affordability. Also recognise that there are levels of protection to stop foreclosures, one of which is switching to an interest only mortgage if things get crazy

I would fix for 5 years, but NOT st that rate!!

why do you think that's your only option??

halifax 4.46% for example

I wouldn't fix at that rate for five years.

Same dilemma here. Noticed the same as PP that 5-year deals are cheaper than 2, which isn't usually the case and does make me wonder if banks are expecting rates to fall in the medium-term.

We're probably going to fix for another 5 years but it is a cheaper rate than yours. I think 5.39% seems high so I can see why you're debating committing to it.

That's the rate my mortgage lender is offering for 5 years.

If I move my mortgage to another lender, by the time that is complete the rate may even be higher.

Martin Lewis, and other financial pundits, feel the rate could be 6% by Spring, unless something changes:

www.standard.co.uk/homesandproperty/buying-mortgages/martin-lewis-mortgages-interest-rates-rise-b1029006.html

Thank you - that's useful.

I spent the last 5 years on 1.99% but my deal is ending and I'm now in the position of looking for a new deal within the next three months. Maybe better to fix now for when the deal ends rather than wait.

I expect unless the government is removed within the next few weeks (unlikely), then we will have the higher than recent inflation rate possibly for three or four years. So I'd doubt there will be a lower mortgage rate than now for at least that length of time.

Are you using a broker? I think people who don’t are stupid. They’re free.

I would seek advice of an independent mortgage broker to look at other lenders. Do it asap. We have used L&C in the past
www.landc.co.uk/best-mortgage-rates/

We usually find a deal & ask for it to start when old mortgage fixed rate ends so no early repayment charges.

Interest rates are not going down. We have just ended 25 years of quantitative easing and cheap money. The real issue is at what higher rate will they generally settle and when.

Personally I’d fixed for 5 years for peace of mind, interest rates have been low for a long time but previously 5-6% was about the norm.

I work for a mortgage lender who expect the bank of England rate to rise to approx 4.5% by next June, therefore mortgage rates anywhere between 5-8% more likely the 6-7% I think

Nope me neither

my fix ends Feb 2024. Hoping this is a short, sharp shock and it will come down again by the time of my renewal. Thoughts on that?

If Sunak got the job this wouldn't have happened right? But no tax cuts.

They will continue to rise for the next couple of years at least. Look back at times over the past few decades for comparable situations.

i heard variable is cheaper than fixed (mortgage lenders actually loan money from Bank of England so they add 2% to cover theirselves, whereas variable they don’t need to). Can you go on variable until a fixed is better?

also I strongly suggest speaking to an independent financial advisor. They aren’t going to be sales people, unlike mortgage companies (not not-for-profit, or charities that are aimed at actually helping people rather than turning a big profit)

I personally think they could get a bit higher, but the truth is, absolutely nobody knows.