Mortgages what’s everyone’s plans

[Clockwatching54321]

Anyone got a deal ending next year?

Our 5 year fix runs out next summer and I think
we have 3 options:

1. pay the early repayment charge now and get another fix (not the best option at the moment)
2. get another mortgage deal but not execute until the last minute (6 months from now) and pay the early repayment charge then (hoping the deal doesn’t get pulled)
3. wait it out on the 2% fix and overpay as much as we can and see what happens next summer

There will likely be a global recession but the government is very much responsible for the current sky high fixed rate offers. They’ve rattled the financial markets. The mini-budget added 1.5% to most fixed rates.

Our thinking is we won’t see it as cheaply again in our lifetime, why not…

it’s made a huge difference to the balances of our loans and comforting to know we will start paying off a couple of them over the next 9 months.

We have 3 products - took one out in April at fixed 3% for 3 years, the other two are 0.95% up in June. It’s going to be a shock with current rates. We can pay one off - I’m inclined diversify on product type for the other and go tracker - I don’t want to get stuck on a high fixed rate for a few years whilst the rates are falling. Dh did some clever modelling of our finances to settle my concerns. For us the inflationary effect will dilute the impact of the interest rates.

Option 3

Option 3

Don't know what to do - just contacted broker for advice. Our 1.09% ends in June.

Mortgages What's everyone's plans?

Not to vote Conservative again.

Option 3

👍

We have never fixed, always gone with a variable rate. We are now on a base rate tracker (0.49% above base rate).

My logic for this is that banks know more about which way interest rates will go than I do. If they are trying to push something at me it is because it is for their advantage not mine.

For me it is easier to absorb interest rates going up in incremental steps than it is to absorb a big step up at the end of a fixed rate term.

we fixed for 5 late spring at about 2.5%, was debating about 10. Will overpay, I don't expect rates to be that low in 5 yrs time.

BOE expected to increase by 1% with target of 6% Q2 next year

We fixed at 1.29% in July 2021 on a 5 year deal. Option 3 is what we’re doing, chucking as much as we can to overpay (£500 atm) with the hope that when we come out rates aren’t too ridiculous. We saw inflation coming, but clearly not the energy crisis. We’ve not got the heating on yet so will see if we can continue to overpay. My concern is that rates stay at 6-7% for a few years. I’m not convinced they’re coming back down. After all look how long rates were at below 1% post 2008. Think we’re all going to have to get used to it. And it’s not all bad, interest rates increasing on savings (assuming you’ve got some) will hopefully help us pay a bit more of a lump sum when we come off our fixed rate. Best of luck to everyone though. It’s going to be a tough couple of years, which given 2020 onwards has been pretty horrible is saying something.

If you work out what your likely future payment might be when your fix ends, can you afford to save or overpay the difference now?

If so, you will get used to not having that money, and you are also able to reduce what you need to borrow when your current fix ends?

@oiltrader and the question is what after that? We are now at the tail end of our mortgage so interest is a relatively small part of our mortgage payment.

Even at the start of our first mortgage the idea of fixing then being stuck with a sudden jump up at the end of the fixed period terrified me.

Our first mortgage was in the bad old days when mortgage companies pushed endowments with the promise that we would be able to go on a fancy holiday at the end because the endowment policy would be plenty of money, more than enough.

There were plenty of other mortgage products to bamboozle the unwary mostly based on smoke and mirrors. We stuck with repayment as being a product I understand.

Yeah.

US inflation figures down by a mere 0.1%.

After what happened over the mini budget and the current mess they have unwinding it I would guess the BOE are going to be proactive on rate rises rather than risk upsetting the markets again.

I speculate that another 0.5% absolute minimum is nailed on. The question is how much more above that it will be.

We're doing pretty much option 2. Our ERC is huge if we pull out before the deal expires. We can't book a new deal until January. Best case, if rates stay stable, we're looking a £400pcm extra cost - but no one is thinking they'll stay stable, are they?

If we can secure a fixed rate under 5% we might consider it - but if not, we'll most likely go to a tracker rate that doesn't have ERCs, which will be more expensive in the short term. However, predictions are that rates will start to come down again next autumn. If they do, we'll fix as soon as they look vaguely sensible.

Either way, next year is going to be financially painful.

Sorry, that should have said - we're doing pretty much option 3

will settle down between 4.5 and 6.5 for the medium long term

the experiment of low interest rates is over

My savings rate is still 0.5% quick to rise interest in debt but not so much on our savings. They were quick to move it down too when rates dropped. I really need to look into another account with better interest but I need access to it.

OP Update: We are doing option 2 and 3, speaking to our broker they suggested locking in a rate now but not doing anything with it. We have overpaid as much as we can.

Waiting till early next year then we can decide to either stick with our current lender and lock in a new deal (which you can cancel until the end of your current fix) or if the rates have gone sky high execute the deal we lock in now and pay the ERC. Currently looking at 5.4% for a 5 year deal securing that now. Then if the rates jump to 7/8% it’s makes sense to go with that deal. If it’s only 5.8% next year we scrap the deal and go with our current lender avoiding ERC.

At least this way we have a back up plan / options early next year.

Option 3 and overpay (or save).

Not to vote Conservative again

If Labour get in do you think interest rates will magically drop again?

I'll never vote Conservative again.

I don't think anybody will.

They're a busted flush with a fantasy ideology we've all just seen fail.

Soon there won't be be A Conservative party to vote for.

As it is there's nothing "conservative" about them. They're just destroyers.

That's why our lives keep getting worse and worse.

My fix was due to be up next May. I looked at all this around April time, the 10 year average and the likelihood of it going up to around 6-7%. I paid to come out early and got a 10 year fix at 2.4%.

Very glad I did.