Page 3 | Do you think mortgage interest rates will continue to rise?

Charlize43 · 2022-10-02T13:40:35+00:00

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?

RandomCatGenerator · 04/11/2022 09:50

DrManhattan · 04/11/2022 07:44

Unfortunately I was being sarcastic lol
It's funny how quick the banks are to put up their rates on mortgages but not so fast when it comes to savings accounts

Ha agree

Zilla1 · 04/11/2022 10:16

Depends on your priorities, to desire certainty or to save over the life of the fix. My guess isn that they'll go higher than yesterday's rates then drop in the next two years. If you want the security of being able to pay and you can afford the rate on offer but couldn't if the rate increases by a % then fix. Have a think whether 5 years is the best duration - I would have fixed a couple of months ago for five years but not now, perhaps 2 or 3. No certainty round about the future from anyone or else they'd make billions in the markets, just guesses and judgment. If anyone tries to kid you they knew what would happen or you were foolish to think interest rates would stay low beyond last year, perhaps ask them how they put their money where their mouth is or why they predicted rates would increase now and not a year or two or three years ago given rates have been low for 14 years. BTW, my city acquaintances who make fortunes and worked in the markets for decades haven't predicted the timing and made billions, just trade on volatility for what they were unable to predict. A few people always say they predicted this but usually they make a range of predictions and quickly forget ll the ones that failed. Good luck.

alwaysmovingforwards · 04/11/2022 19:29

Zilla1 · 04/11/2022 10:16

Depends on your priorities, to desire certainty or to save over the life of the fix. My guess isn that they'll go higher than yesterday's rates then drop in the next two years. If you want the security of being able to pay and you can afford the rate on offer but couldn't if the rate increases by a % then fix. Have a think whether 5 years is the best duration - I would have fixed a couple of months ago for five years but not now, perhaps 2 or 3. No certainty round about the future from anyone or else they'd make billions in the markets, just guesses and judgment. If anyone tries to kid you they knew what would happen or you were foolish to think interest rates would stay low beyond last year, perhaps ask them how they put their money where their mouth is or why they predicted rates would increase now and not a year or two or three years ago given rates have been low for 14 years. BTW, my city acquaintances who make fortunes and worked in the markets for decades haven't predicted the timing and made billions, just trade on volatility for what they were unable to predict. A few people always say they predicted this but usually they make a range of predictions and quickly forget ll the ones that failed. Good luck.

Yup, even a broken clock is precisely right twice a day.

edwinbear · 04/11/2022 19:44

I’m not fixing my mortgage, but caveated with the following:

I work in investment banking, specialising in interest rate derivatives. I sell interest rate swaps (which drive mortgage rates), to FTSE 250 clients, so watch/analyse the wholesale interest rate markets for a living.

We have a small mortgage, with 90% equity and I can afford for my tracker (0.59% over base) mortgage to rise quite substantially.

If the shit really hits the fan, we have sufficient savings to pay it off.

The BoE specifically commented yesterday that they don’t believe rates will rise as high as markets currently price in, and I agree with this. My own bank’s economists have held the same view for a while, rates have come off c.60-70bps over the last few weeks so I’m comfortable being on a floating rate for now. But, the next key date will obviously be 17th Nov which I will be watching closely.

Cloverforever · 04/11/2022 19:57

My fixed rate with the Nationwide ends in March. Last week the best I could fix at with Nationwide was 5.89%. Today it is 4.99% for a 2 year fix. Happy days.

Justalittlebitfurther · 04/11/2022 20:06

Absolutely no idea why you wouldn’t change lender, we swap every time our deal ends it’s not difficult our lender organises it and we used to even get incentives to do so. Crazy to fix at that rate when you probably have got a lower rate.

Cloverforever · 04/11/2022 20:15

Justalittlebitfurther · 04/11/2022 20:06

Absolutely no idea why you wouldn’t change lender, we swap every time our deal ends it’s not difficult our lender organises it and we used to even get incentives to do so. Crazy to fix at that rate when you probably have got a lower rate.

I could go to a different lender (I have a 2yr fix reserved with Halifax at 4.39%), but for reasons I won't go into on here I would much prefer to stay with Nationwide. I am very switched on financially thanks, just thought the information would be useful to others, but hey ho.

Justalittlebitfurther · 04/11/2022 20:18

@Cloverforever I was actually speaking to the OP as it was their thread.

Hollowtree3 · 04/11/2022 20:20

I would fix if you can afford the payment. Then you don't have to stress about all this.

CrashyTime · 21/08/2023 17:20

Fix and make overpayments when you can (or pop money into a savings pot for overpayments in future, when rates peak and maybe start coming down) All this is now controlled by what Russia, Japan, China and U.S are doing (or what is happening to their economies) BOE has very little real control.