What do you think will happen to mortgage interest rates? Wth the

[PeepsAndSheeps]

What do you think will happen to mortgage interest rates? This is my first time having a mortgage during any type of a financial crisis. They've been going up recently, I assume that's set to continue?
Is there a point at which they can't go any higher? I know there were interest rates of 14/15% in my folks day.

My point was regardless of mortgage or not the UK is pretty obsessed with property prices. If you have no mortgage but your house drops in value it does affect the psyche. And as I said if mortgage rate increases start to impact prices it will still impact some who want to use that "wealth" for other things.

This is what's wrong with our system, you wouldn't take out a car loan where the internet can rise but you are happy to do it with a mortgage. We've gone for a portable 10 year fix

Agreed @Mia85

Are you sure about that?

if you own your property outright and no intention to move, i doubt it would impact negatively. Indeed any saving you have will be very healthily growing!

if you own outright and you want to downsize, you lose value on yours but savings on next

and you are correct. The psyche has changed. We know we will come through this so the the covetable areas will remain covetable etc and those with ever growing savings will buy up lower priced properties, endlessly buoying up the market

@Scorchedterf

please tell me you don’t have a mortgage.
you have displayed a complete lack of understanding of the way mortgages work!!

We fixed for quite a few years when we first got our mortgage and it gave security in an uncertain market. When interest rates dropped we paid more for a while due to being fixed but then moved to a tracker mortgage which worked really well when rates were low.

Definitely worth considering fixing.

Increasing interest rates only works if inflation is being caused by too much spending. The inflation we're all talking about is retail sales, not house price inflation. People are cutting back on their spending and so increasing interest rates is the wrong thing to do. I think we're already in a recession.

In the midst of this cost of living crisis it's bonkers to increase interest rates: adding petrol to the fire.

I thought Iwas sure that the effects a small rise in the interest rate would have a big impact in the amount of mortgage payments, I’m glad to stand corrected. Is that because mortgages are structured differently?
i am thinking back to the times when the interest rates went up and people didn’t realise how dramatically it would affect the repayment sum.

but then most mortgageS were interest only..
would hate to see the amount of repossessions there were in the 90s.

Interest rates won't get very far. Retail sales are already falling, and it's likely that we'll be in recession soon (if not already)

The cost of living crisis is doing the job of an interest rate hike. As people spend more and more on essentials, there is less to spend elsewhere in the economy.

The economy would tank if we got to 5%, never mind 15%!

Increasing interest rates only works if inflation is being caused by too much spending. The inflation we're all talking about is retail sales, not house price inflation. People are cutting back on their spending and so increasing interest rates is the wrong thing to do. I think we're already in a recession

In the midst of this cost of living crisis it's bonkers to increase interest rates: adding petrol to the fire.

unfortunatley, it doesn't work on the basis of how inflation is rising, yes people are cutting back their spending as the price of everything is increasing due to inflation - the interest rate rises are to curb the inflation

if the interest rate doesn't rise and the cost of inflation soar - that would also be bonkers - its a balancing act

inflation could reach 7% this year

www.theguardian.com/business/2022/apr/21/bank-of-englands-catherine-mann-warns-rates-could-rise-again-in-may

(it will be the Bank of England that will get the blame - and not the government
I think it was Blair that changed the system of who set interest rates?)

Inflation is high at the moment, the traditional way to combat inflation is to raise interest rates...

I fixed for 5 years a couple of months ago, and it's looking like it was a smart move. I'll probably overpay as much as I can afford to shore up my position and make hay while the sun is shining, that way when my fixed rate runs out I'll be in the best place possible if rates are considerably higher.

Utter nonsense. With the ultra low rates, we've benefitted so much by investing and paying bare minimum each month in the mortgage. When various investments have released, we have assessed whether to put it into the mortgage or reinvest.

Now rates are slowly starting to rise, we will be considering putting a huge lump to pay off a big chunk of mortgage when time comes to remortgage but for now, we still have more than 4 years on an under 1% fix remaining so will continue paying repayments alone.

Inflation is high at the moment, the traditional way to combat inflation is to raise interest rates...

But this isn't traditional inflation. Inflation is being driven mainly by the cost of imports (primarily energy prices). How is raising interest rates in the UK going to combat that?

We are fixing for 5 years
At 1.27% (applied for in february...)
We won't overpay monthly (we did that with this FR and tbh it doesn't feel like it's made much difference..)
So we are planning to do a one off 10% lump sum each year which we can do without penalty for the 5 years.

i thought there was secondary inflation pressures now eg strong job market, pay rises.

We are fixing for 5 years At 1.27% (applied for in february...)

That's a very good deal. Is that with a very low LTV?

Everyone should be overpaying on their mortgage.

Nonsense! It doesn’t make sense if you can earn more money than your mortgage is costing you by investing your money elsewhere.

Blimey can't remember ltv but we owe a third what the house is worth if that makes sense
We also used a broker

Tbh our current FR is only 1.29% since 2017...

that makes sense

I can't get a fixed rate under 2% now

Have you tried a broker?

I remember when the banks gave interest on your savings.

Back in the mists of time.....