Do you think mortgage rates will rise soon?

[TheZeppo]

I’m in a Fix until Oct 2022. ERC of 2%. For various reasons, I’m on 2.6% interest rate.

My circumstances have massively changed (much better job, LTV is under 50%, I’ve cleared the H2B element on the property). I can see interest rates are now under 1% (and there are lots). I’m considering paying to leave the fix early.

I realise no one has a crystal ball, but thought people with a better understanding of it might be able to predict better than I can! Do you think the rates will stay low for a while? Should I just sit tight?

No. They won’t rise anytime soon.

I doubt it. And if so, not by much. The govt knows many people are financially stressed after the last year, people need time to recoup their losses.

The last thing we need is lots of repossessions and evictions. That won't help anyone.

i would say its very unlikely.

Unfortunately rates cannot rise. Property prices have caused huge leverage and increasing underlying rates will cause a fairly high level of defaults. So it’s basically counter productive. At this level at least people have money to spend elsewhere in the economy to keep the wheels turning.

Excellent, thanks everyone! I’ll ride out my current deal.

If you can get a lower rate fix, it doesn't matter what interest rates do. What you need to look at is whether you can save more than your ERC by changing to another mortgage.

May be worth checking if your ERC will reduce to 1% in October and could well be worth waiting depending on the size of your mortgage.

It doesn’t reduce from 2%, I checked the contract earlier. Thanks though.

It is def more cost effective to ride it out, but if rates jump up then I’d kick myself for not jumping ship. Seems most think rates will stay low, so I’ll stick for now.

Thanks all.

I think interest rates will rise a bit as inflation is going above target but not substantially as the economy is still struggling and being propped up by lots of support schemes.

I can't see it would be worthwhile paying 2% charge to save 1.6% over the next year. I would wait it out. If you can make overpayments of £1000 a month or so (or whatever you are able to) without the ERC that would be worth doing.

With the ever increasing amount of debt for business and individuals and the high property prices, I don't see interest rates going up significantly, if at all in the next couple of years.

Inflation may be rising, but the need for the economy and tax revenues to grow, combined with the above I would think would stop any significant rise.

That's just my opinion, though. As ever, we're at the mercy of a panel of nine members at the Bank of England to periodically vote on this. The last one in June was unanimous to stick at 0.1%.