Rising interest rates

[Orangesandlemons77]

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?

Our fix ends May 2023. The fixed rate offers in Australia are currently so high there is no point breaking and refixing. I’m just hoping that the major bank economists are right and that in the back end of 23 there will be some rate reductions.

At least you haven't got pinky & perky running your show!!

We have an appointment to move our mortgage on weds morning. Hoping that the product we’ve selected will not have been withdrawn by then. It will mean a £700 per month rise in payments but luckily I’ll be returning to full time work next month which will cover it. Not concerned about negative equity as we can’t move until we retire in 19 ish years.

What an ignorant comment.

Is it likely there'll be an impact on prices for renting as well? If BTL landlords are hit with higher interest rates will they just increase rents?

Yes. I will likely be raising my tenants rent. It hopefully won’t be a huge rise and I won’t profit from it but the BTL mortgage requires a certain level of rent to be deemed affordable for them to lend. It’s not done on my income but on a multiple of the rent. My BTL fixed ends in July 23, so I anticipate a rise.

This is every Tory government, ever. Literally removing the cap in bankers’ bonuses, while people will be losing homes, job, family ties, uprooting children, struggling to heat their homes. If you’re rich and don’t care about anyone who isn’t, this is the government for you.

And to think of the money that was spent on QEII’s funeral just last week. In light of all we know - and more importantly don’t know - about her and the crown’s finances, this Tory government is shitting on regular people, working and paying their taxes and abiding by laws to live a non-bankrupt life. How aren’t people taking to the streets??

Oh what a shitshow this is going to be. Rents are already unaffordable in many areas. This has the potential to dwarf the concerns re energy prices.

Yes. I will likely be raising my tenants rent. It hopefully won’t be a huge rise and I won’t profit from it but the BTL mortgage requires a certain level of rent to be deemed affordable for them to lend. It’s not done on my income but on a multiple of the rent.

This is one thing wrong with the housing market. I think bTLs should have much high deposit requirements or ideally not be financed by borrowing. If you have spare cash & want to be a landlord buy a BTL outright.

I'm starting to worry & pissed off with myself for procrastinating about sorting out remortgage/separation etc.
I'm on a tracker (deliberately coz rates were so low & I was paying childcare and it had unlimited overpayments) so my mortgage has been gradually increasing with rates all year. I've had a couple of decent payrises which have softened the blow up-to-now but another 5% rise is £600 a month....I guess I'd try and switch to interest only for a while & I'm fortunate to have decent equity (atm unless house prices plummet)
Scary times.....but my first fixed rate mortgage in 2004 was 5.99% but I wasn't solely responsible then...

depends on the market, their may not be the demand for renters to accept higher prices

I can see a lot of young people moving back home instead of living in flat shares. Not all of them can do it obviously but a significant percentage of them would be able to even if they have to commute two hours each way to work. It's still cheaper than rent. So that will dampen demand in cities like London. ..

My mortgage is fixed until 2026 but at 4.5%. I was hoping that by then we could look at a longer fix for 3% ish and reduce payments - £1600 a month for a small terraced 3 bed just seems so much. Looks like we'd better pull our socks up and expect an increase in 4 years!

I'm in a 5 year fix until 2025 at 1.79%, I've always fixed as I'm a single income household and needed the security. I desperately wanted to move house but I'm sitting tight, things are far too unstable at the moment.

@TooMuchToDoTooLittleInclination Thanks for your suggestion but I don't have room for that unfortunately and it would be too disruptive for DS. It's a mess. I had hoped I could hang on until he finishes secondary but that seems impossible now. It's been a very rough decade 😢

Unless people are forced en masse to sell up or be repossessed the prices won’t do much. People tend to sit tight rather than take a loss.

Yes you just set it to complete on a certain day. We signed the contract for our new fix a few months ago but it actually only completes this week because that’s when our old fix ends. If your circumstances change in the sense of losing your job or something else they ask about on the forms you probably need to tell them though.

True, but then I’ll sell instead and there will be even fewer rentals available which will push prices up anyway. No-one is going to do well out if it.

The rental market where my rental is (it’s my old home in a different part of the country) is very strong. But it’s hard to say how it will change anywhere.

Only bought at the beginning of the year,we were advised to get a 2 year fix that runs out November 23,we are bricking it to say the least,with everything else that has gone up there isn’t any spare cash!

I would urge anyone who thinks they will not be able to keep their homes to speak to their lender. They do have a legal duty to help and are being pressed by regulators to do more. The earlier you ask for help the better. There will be mortgage windows or reduced payments etc that they should be able to offer.

Our fix of 2.83% ends in June '23 and I'm panicking that we may have to find an extra £800 a month.

But GOOD NEWS folks, I made £0.01p in interest on my savings so I'm currently working out where best to invest this. Let me know if you have any suggestions.

In the housing market it negatively impacts people who are looking to buy at the moment as the monthly mortgage repayments would be much higher than if you fixed a few months ago.

Bank of England is factoring in 31% house price crash in its latest bank stress tests. Not to say it'll happen, but one of many eventualities it's considering. the BoE just published it on their website yesterday. Like I say, not to suggest it's going to happen, but they put possible scenarios in and it wasn't there before!

People who borrow are always told that interest rates can rise so they should be prepared for this. Fixing is often the best option as then you know how much repayments will be for the fixed term, even though you pay over the variable rate.

Are you able to work when your child is at school?

This. Precisely this.

the govt has decided to try and boost the economy by making more cash available (to the rich). This means more money chasing no more goods. Which, as we’ve all seen in past months, means inflation.

The Bank of England eill therefore increase rates to try and squash inflation (thereby negating and possible positive effect of the givers actions - not that I think there really are any).

it’s like pressing both sides of as a scale at once - it won’t move.

In the meantime, the savers interest rateswill rise slightly, but the loan interest rates will increase significantly.

if you have a mortgage coming to renewal, you need to save as much as humanly possible right now, so you can pay down a lump sum at renewal time. Then you’ll be able to access the less enormous rates.

if you can’t save more - look to see what you could cut from your budget when the time comes.