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?

Also, for those looking to mortgage - look for ones with unlimited overpayments allowed. The more you can overpay, the less interest you pay overall.

@NonagonInfinityOpensTheDoor you might be able to reserve a fixed rate now for a few months ahead, before prices go up further.

We just did that for a new fix in January. Could be worth exploring.

@MrsTruss Yes I'm hoping so. I am in the not required to work group currently, however, I'm waiting for DBS checks for a voluntary role that I hope will lead to employment. I can only work term time so options are limited. I've sacrificed a lot, including my career. It really sucks. However, I refuse to be beaten!

The insanity of the Government's 'strategy' is that everything I'm reading in this thread is screaming economic contraction.
People will be reversing out of purchases or dropping their offers as they redo the maths or because they can't fulfil their mortgagee's financial stress test (which is bound to be tightened going forward). I personally think a fall in property prices would be a good thing but historically it just tends to mean that owners stay tight and don't move unless it's a forced sale.
I also saw a thread yesterday about the horror of building and extension costs. Homeowners are reigning in their ambitious projects as they can't afford the ratcheted up costs of labour and materials.
Where's the growth in that?
The only benefit is this is a gift to Labour. Nothing like shafting the property owning class to lose Tory votes.
It's an absolute shit show and I feel so sorry for many of you on this thread. Like the cost of food and energy isn't enough to screw us over.

Luckily indont have much debt.

I'm paying finance on a car but it's fixed

I've just bought a house, and very, very luckily went for a 5 year fix, deal sorted in January. 1.99% So again. Hoping I'll over pay so in 4.5 years time even if interest rates are very high I can pay the monthlies.

Dont have much savings as used it all on the house so hoping to build this up too.

Thank you and to others have reached out. My anxiety spiralled with the constant bbc news updates on interest rising. Turned all them off. Had a cry to parents. Booked an appointment with lender. Have job interviews lined up. Trying to stay positive it’s been a spiral of shit these past 2 years and this has topped it all off. I can’t take much more 😭

My 5-year fix was up early next year. Thankfully we realised we needed to do it sooner. Have paid a tiny bit to break and fix it now for another 5 years.

If we had done it a month earlier it would have been less. We moved from 2.16 to 3.6%.
If we had done it a month or two later, it would be even more. Just holding onto sanity.

My mortgage is fixed until Jan 2025. We can absorb a bit of a rise but that's really dependent on everything else - if food/energy etc all shoots through the roof then our ability to cope with a more expensive mortgage will be much reduced. The house has theoretically increased in value, though, so that's an additional buffer.

I think we are in for a tough few years. There will be however be significant pressure on lenders to avoid repossessions. (particularly because people do remember 2008 and bailing out the banks- I think there will be pressure on the banks to support consumers).

I suspect that lenders will offer more support through enabling switching to interest only products to help people reduce their outgoings (though this does mean that people won't be paying their loans off and could cause big problems for people nearing retirement)

Banks are not immune themselves though to higher interest rates- they borrow money to lend on through mortgages; so their money supply costs are likely to increase

What a strange thing to assume! Yeah everyone just fixed for 5 years 6 months ago so we're all good.

We'll be fucked at the end of next year going from a 1.9% 450k mortgage to probably nearer 5%.

To answer the OP I'm concerned about hi we'll afford a higher interest rate.

Fixed for 10 years last month, £40 per month more. 20 years left on the mortgage but overpaying means that by the time the fix is up, we should only have a few years left to pay.

I think that poster was coming from a place of extreme ignorance tbh. It doesn't require much thought to realise that most people aren't necessarily going to have been in a position to remortgage within the last 12 mths.

Think the new fix is 2.76, up a percent from 1.76.

I tend to agree. I work in mortgages and we have generally been stress testing at around the 7/8% mark for the last 8 or so years but everything has gone up so much recently that our affordability models aren't really accurate right now
We have currently pulled all our mortgage products so we are all waiting for announcements regarding new rates and new affordability criteria

In reality there are millions of people stuck on banks standard variable rate due to being in an unmortgagable property. Mainly leaseholds. Feel for them

I fixed early (and paid the ERC) a few months ago. I've had various ups and downs with mortgages over the years including being stuck on a high fixed rate when the interest rates fell off a cliff last time. It's all a bit of a gamble and you have to hope that timings align. It really does suck at the moment. I believe that last summer mu building society was offering Its first ever 0.99pc fixed rate which is bonkers right now.

@TheFormidableMrsC

It has indeed. A decade, blimey. Time is a weird thing isn't it. It feels like 'not that long ago' on one hand & 'fucking forever' on the other.

you think 'if only I think/try hard enough there MUST be a better solution!' But sometimes there's only the one you don't want 🥲 unless....

Rob a bank?

🎁 I've just bought a Euro Ticket for tonight. Keep your fingers tightly crossed 🤞🏼

What about FTB?
We are totally screwed for the time being.
Me and my partner put an offer on a house, got accepted in April and the vendor told us last week that they're pulling out now! It's completely insane, I f&^*ing hate this house buying shambles in this country.

I don't know what you mean by you are not in the required to work category?

I've been putting the figures into a repayment calculator and anything over 5% is going to be scary unless we get decent payrises in the next 18 months. Fixed until early 2024, and hoping for the best.

90% of my mortgage is fixed for another 2 years and the other 10% is on variable but am over paying. Hoping to clear the balance in the next 2 years so that when I look at remortgaging, the payments on the variable bit will cover the increase so overall won't feel the hit so much. Well, that's the plan!

I feel like I need a crash course on mortgages. I didn’t even know you could have different mortgages at the same time.

We just fixed for 5 years about 4 months ago so hoping we can ride it out.

We have a rental property on a variable mortgage though so need to keep a close eye on that!

I think regardless of your specific finances, whether you have savings, mortgage, or not, uncertainty is really unsettling.

@MrsTruss I'm a carer