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Original poster

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

179 replies

PeepsAndSheeps · 28/04/2022 09:14

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.

OP posts:
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greyinganddecaying · 30/04/2022 09:55

I'm watching the interest rates creep up and good mortgage deals disappear & so frustrated that me fixed deal doesn't end until next year (penalties for early repayment/switching are huge).

FourTeaFallOut · 30/04/2022 10:05

Yeah, I'm the same. My introductory period doesn't end till May next year, although I think Nationwide lets you shift to another of their deals 3 months earlier without penalty but by that point the new fixed rate of my current mortgage may be comparable or preferable.

FourTeaFallOut · 30/04/2022 10:12

..new variable rate might be comparable with everything else on the market.

Original poster
PeepsAndSheeps · 30/04/2022 10:19

@greyinganddecaying you can lock in some deals 6 months before yours ends. I know that's still a while away though.

OP posts:
greyinganddecaying · 30/04/2022 10:20

PeepsAndSheeps · 30/04/2022 10:19

@greyinganddecaying you can lock in some deals 6 months before yours ends. I know that's still a while away though.

Thanks - I'm definitely going to start looking as soon as I can, just know that the rates are just going to keep going up!

80sMum · 30/04/2022 10:24

It is very worrying. People have got used to incredibly low interest rates and have therefore been able to afford to pay a great deal more for houses. Low interest rates have, to quite a large extent, driven price increases.
If interest rates rise quickly, it's inevitable that there will be a flurry of mortgage foreclosures, falling property prices and negative equity.
Falling prices may help those who are trying to get onto the property ladder, but those already on it who have mortgaged to the max could get into serious financial difficulties.
I am concerned for my adult children who have mortgaged properties.

1990s · 30/04/2022 10:31

Just fixed for 5 years with 58% LTV at 2.2%. Went through a broker nothing lower.

However we had to have something with 6 months validity as our other fix doesn’t end before that.

If your fix is ending in the next 6 months get a new fix now! You can join them up.

timestheyarechanging · 30/04/2022 10:47

I remember my sister going into negative equity and having to 'give her keys back in the 80s.
I was fortunate to buy at 25 and we overpaid. I am now mortgage free at 51.
My daughter 23 is buying her first place at the moment but thankfully, she's gone for a fixed rate.

Westair · 30/04/2022 10:49

Westair · 29/04/2022 21:27

We have a 10% deposit and are fixing for five years at 2.49%. After five years, even if the house is valued at the exact same price (i.e. no appreciation), we will be able to remortgage at 75% LTV.

For those asking - we applied for the deal about a week before Easter. I’ve just checked and it’s not there any more! Shock

Westair · 30/04/2022 10:54

tomatoandherbs · 30/04/2022 07:46

I can’t believe that a poster on here has been accepted for a 90/10 mortgage. I honestly thought that the industry had been tightened up and a minimum of15/85 unless a specialist mortgage company

You can still get 95/5 deals.

If we had to wait until we saved another 5% to reach 85/15 then the house prices would be even further out of reach for our stagnant public sector salaries.

ReadyToMoveIt · 30/04/2022 11:08

We fixed in Feb for 5 years at 1.48% with 60% LTV… I’m glad we did! Don’t think we’d get anything as good as that now.

tomatoandherbs · 30/04/2022 11:17

I can understand the keenness to get on the property ladder asap but it does seem that a deposit of 5% is really an indication that perhaps it is just something you can’t afford. So have to rent. A sad fact of life. Just like I’d love a Tesla. But I accept. I just can’t afford it. So drive a cheapo run around

ReadyToMoveIt · 30/04/2022 11:19

tomatoandherbs · 30/04/2022 11:17

I can understand the keenness to get on the property ladder asap but it does seem that a deposit of 5% is really an indication that perhaps it is just something you can’t afford. So have to rent. A sad fact of life. Just like I’d love a Tesla. But I accept. I just can’t afford it. So drive a cheapo run around

Why? Most people getting a 95% mortgage are probably paying far more in rent than they will be in mortgage repayments. Waiting until you have saved more prices you out of the market completely. In a lot of cases it’s the sensible option.

ReadyToMoveIt · 30/04/2022 11:21

We bought 5 years ago with a 5% deposit, by the way.
The money we ‘saved’ in rent each month, we used to overpay the mortgage.

tomatoandherbs · 30/04/2022 11:23

The only reason they are allowed is because the government is guaranteeing them for 7 years

the fact a bank not willing to lend to someone unless the government guarantees them… tells you all you need to know re how financially sensible a 95/5 loan is in itself

ReadyToMoveIt · 30/04/2022 11:25

It was financially sensible for us 🤷🏻‍♀️. We now have 60% LTV. If we’d waited until we’d saved more, we wouldn’t have been able to buy at all.

tomatoandherbs · 30/04/2022 11:26

How long ago did you get the gov guaranteed mortgage? I thought only very recent thing

ReadyToMoveIt · 30/04/2022 11:29

We didn’t get a government guaranteed mortgage. As I said above, we got a 95% mortgage 5 years ago, which we have been overpaying with the money we saved on extortionate rent repayments.
The point being that in many cases, it is a financially sensible decision. We’re certainly in a far better position now than if we hadn’t bought 5 years ago with a 5% deposit.

sonicred · 30/04/2022 11:33

It defo makes sense if mortgage is same or cheaper than rent

tomatoandherbs · 30/04/2022 11:38

Braver than me. Much braver. But good it’s paid off in your case

EngTech · 30/04/2022 11:39

We have had historic lows, they are only going to go up and will be used to control inflation

we are in for a bumpy few years

newtb · 30/04/2022 11:39

In my memory the base raté went to 15%the mortgage rate was 16%.
How did we manage? No foreign holidays, new cars, fancy mobiles, New clothes etc. Around 1981/2.
Then, again, in 92 or 93 when the UK crashed out of the EMS, the exchange rate mechanism, after they'd tried, and failed, to shadow the deutschemark, (which then became the euro) overnight the rates shot to 15% and the pound dropped like a stone to 7FF when it was normally between 9FF50 and 10FF50.
Was on holiday in France at the time, and the credit card bills were interesting to say the least.

ReadyToMoveIt · 30/04/2022 11:39

tomatoandherbs · 30/04/2022 11:38

Braver than me. Much braver. But good it’s paid off in your case

It wasn’t brave, it was sensible.

sonicred · 30/04/2022 12:30

I have older colleagues that took out 95% interest only mortgages 5 x their relatively low salary. That is scary but most made a fortune.

tomatoandherbs · 30/04/2022 12:33

Banks don’t think so
Unless government backed
ends in dec 2021 for new entrants. Then no more because the banks know it’s not sensible to lend on a 95/5 basis. Simply too risky. Toxic in fact.

but of course that doesn’t mean it doesn’t work out for some without a guarantee and brilliant it worked for you and your family