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Original poster

Rising interest rates

113 replies

Orangesandlemons77 · 26/09/2022 17:56

So it looks like there might be more interest rate rises coming, just wondered how it will impact on people. How will it impact you?

OP posts:
DenholmElliot1 · 26/09/2022 17:59

Most people have fixed for 5 years haven't they?

The only impact will be for savers who will obviously benefit.

Cynderella · 26/09/2022 18:15

Potentially it'll affect everyone who borrows money or save it, but also it'll impact on prices, so eventually we'll all feel the results.

DonnaBanana · 26/09/2022 18:30

Uh yeah and a lot of people fixed for five years.. four years ago. So it’s hardly a get out of jail free clause.

ellieboolou · 26/09/2022 18:45

DonnaBanana · 26/09/2022 18:30

Uh yeah and a lot of people fixed for five years.. four years ago. So it’s hardly a get out of jail free clause.

Exactly! My fixed finishes next September, currently on 1.36, was advised by my broker to not change yet as penalties etc it wouldn't be worth it.

nonelynov · 26/09/2022 18:49

Banks don't have to pass on the interest rate rise to savers. Radio 5 discussion today had an fiscal and monetary policy specialist on who thought that there was no way banks would pass it on

LadyDespair · 26/09/2022 18:55

Two million households have variable rate mortgages and they will all be affected. Then all those on fixes that are coming to an end will have to take a higher rate. Five year fixes have recently become more popular but there will be many on shorter terms.

I imagine it will be a bloodbath because however much people have been stress-tested, all the cost increases across the board makes a really deadly combination

Roselilly36 · 26/09/2022 18:59

Banks are businesses, based on past experience they will pass the rises on. Money has been so cheap for so long, our first mortgage, late 80’s, 12%.

MintJulia · 26/09/2022 19:48

It won't hit me too badly I hope. I've been paying down the mortgage as fast as I can, over the last few years.

But it depends how high they go.

Cheeselog · 26/09/2022 19:58

I just fixed my mortgage for 5 years a few months ago and don’t have any other debt so it won’t affect me for a while. However, we probably don’t want to stay here for the full 5 months as we’ll want more space by then - were hoping to port the mortgage which I’m thinking the bank will be less inclined to approve if it’s on a much cheaper rate than what they’re offering by then. I’m also hoping the increased cost of mortgages will bring house prices down commensurately because they have risen ridiculously over the past few years.

Cocoaone · 26/09/2022 20:16

But Cheeselog, that also means your current house will sell for less. So unlikely it will be of a bonus to you. Banks are likely to require higher deposits as confidence in the housing market shrinks

Lots of mortgage companies have withdrawn their mortgage products today for new customers. I think we'll be looking at 7-8% mortgage rates in October. Most people were only stress-tested up to 6% when they took their mortgage out, and that would have assumed all other living remained similar - not with inflation at 10%

The next couple of years are going to be very tough, I fear

Octomore · 26/09/2022 20:28

DonnaBanana · 26/09/2022 18:30

Uh yeah and a lot of people fixed for five years.. four years ago. So it’s hardly a get out of jail free clause.

Yeah, that only applies to those who have relatively recently remortgaged or bought.

Our 5 yr fix comes to an end late next year, all we can do is try to pay it down in the meantime.

Octomore · 26/09/2022 20:28

DonnaBanana · 26/09/2022 18:30

Uh yeah and a lot of people fixed for five years.. four years ago. So it’s hardly a get out of jail free clause.

Yeah, that only applies to those who have relatively recently remortgaged or bought.

Our 5 yr fix comes to an end late next year, all we can do is try to pay it down in the meantime.

Octomore · 26/09/2022 20:29

(I'm agreeing with DonnaBanana if that's not clear)

tea1tea2 · 26/09/2022 20:31

our five year ends in Nov 26 at 1.04%. But it worries me if things dont get calmed down or housing market crash . Its definitely a worry

UserNameNameNameUser · 26/09/2022 20:34

I was hoping to take out a 10 year fix in the spring in order to move house. Not a hope in hell now!

Our other option is self build, which means we can’t fix current mortgage and will have to now pay through the nose through the build.

So, we’re basically screwed if we want to move. On the significant plus side, we do have the option to stay put with a small mortgage that would be affordable well into double digit percentages. I have so much sympathy for those who don’t have that safety net.

mizu · 26/09/2022 20:37

We fixed at 2.66 this June for 5 years. We only bought 4 years ago ( late 1st time buyers) and our 1st rate wasn't much lower then this.

We will have 14 years to pay off still after 5 years though. Who knows what things will be like in 2027!!!

Woolandwonder · 26/09/2022 20:39

It will mean I won't be able to buy a house (FTB). Brilliant.

SunSparkle · 26/09/2022 20:43

We were FTB in December 2019 and fixed for 5 years at 2.25% . I’m frantically hoping that this all sorts itself out hy December 2024 as we now have nursery bills to pay and simply don’t have another £700 a month to pay on top of everything else if our next mortgage is 6% or higher.

thankfully we bought a house we intend to stay in forever so not going to get ‘stuck’ but I’m really debating whether or not to have a second child as I’m really worried about money.

UserNameNameNameUser · 26/09/2022 20:47

I am actually now wishing I had fixed for 10 years at 2% last year, because even with the early repayment penalties I would have been better off.

NonagonInfinityOpensTheDoor · 26/09/2022 20:51

Our 5 year fix comes to an end in a few months. I expected to have returned to employment post baby before now, but due to ill health that hasn’t happened. Hopefully I’ll be able to get W job soon, but realistically we’re going to have to sell the house. We can’t afford private rent so it will mean potentially being homeless with a 2 year old. I’d kill my self if it wasn’t for my child tbh.

user1487194234 · 26/09/2022 20:51

We are overpaying to the max on our fixed rate and also saving in an ISA
our fixed rate is up in 2 years so I want to be able to have the mortgage amount as low as possible

user1487194234 · 26/09/2022 20:53

That’s absolutely shit ,but please seek help

Cheeselog · 26/09/2022 20:55

Cocoaone · 26/09/2022 20:16

But Cheeselog, that also means your current house will sell for less. So unlikely it will be of a bonus to you. Banks are likely to require higher deposits as confidence in the housing market shrinks

Lots of mortgage companies have withdrawn their mortgage products today for new customers. I think we'll be looking at 7-8% mortgage rates in October. Most people were only stress-tested up to 6% when they took their mortgage out, and that would have assumed all other living remained similar - not with inflation at 10%

The next couple of years are going to be very tough, I fear

True but I think probably less so than what we’d be moving up to - my house is a 2 up 2 down so because it’s inherently on the cheaper end of the market, higher interest rates have less of an impact than on a larger/more expensive house where people would need a larger mortgage iyswim. There’s a lot of demand from landlords for this type of property as well although I’d prefer to sell to an owner occupier.

Cheeselog · 26/09/2022 20:57

NonagonInfinityOpensTheDoor · 26/09/2022 20:51

Our 5 year fix comes to an end in a few months. I expected to have returned to employment post baby before now, but due to ill health that hasn’t happened. Hopefully I’ll be able to get W job soon, but realistically we’re going to have to sell the house. We can’t afford private rent so it will mean potentially being homeless with a 2 year old. I’d kill my self if it wasn’t for my child tbh.

Flowers I’m sorry to hear you are struggling so much - that sounds really stressful. Have you spoken to your local council, CAB or Shelter about your options?

Cosycover · 26/09/2022 20:59

Yeah I fixed for 5 years, 4 and half years ago!