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Original poster

Are mortgage rates going to rise more?!

173 replies

Namechange1377 · 31/01/2023 20:21

A dream house has come onto Rightmove, forever house material, We have joint income of £3700 monthly.
If we sell our house for £290,000, have deposit of £135,000, the house we would like is £465,000 and on a mortgage of £330,000 we are looking at roughly £1600 monthly mortgage payments, Fixed rates are 4.89% or tracker at 3.94% £1400. (35 years)

I know no one has a crystal ball, but what are opinions- are mortgage rates going to stabilise? Are they going to rise?

Should we fix, should we track?
Is mortgage of £1600 insane?!

OP posts:
Worriere · 31/01/2023 20:40

I would track at the moment.

Krakenes · 31/01/2023 20:40

Depends what your other outgoings are, if you think your wages are likely to increase, are you planning to have children over the next 5yrs. It’s 43% of your current earnings which is quite high but doable when you’re younger and your wages will increase quickly. I think we were similar, but it was over 25yrs. If you’re going to be there for a long time, fix on what’s affordable to give you stability for a couple of years. We’ve always taken the mindset of being able to afford everything on one salary just in case (albeit very frugally!). When you remortgage, reduce the term if you can afford it. You’ll then have equity in your property which will give you a better rate.

pompei8309 · 31/01/2023 20:44

TokyoSushi · 31/01/2023 20:30

Not a boast at all but our joint income is £5.7K per month, our mortgage is just about to go up to £1279 and with the spiralling cost of everything else, that feels too much!

I think £1600 is too high...

You’re not managing your money very well or you have other big expenses, £1300 on a mortgage is not big at all

Michellexxx · 31/01/2023 20:44

Agree with above posters- do you have children yet? If not and you’re planning to, then I probably wouldn’t. Equally, if you’re in a position to increase salaries and never move again then it could be worth it long term.

We have an income of about 4.6k but our mortgage is less than 1k. Although likely to go up when our lovely 0.9% fixed rate ends next year 😭

Original poster
Namechange1377 · 31/01/2023 20:44

In the one and done camp for children, 5 year old has just started school.

I am 4 days a week, I could move to 5 days a week and get extra £350 a month.

I think after 4 years of paying high nursery fees, I just want to move finally to a nicer area with larger garden! x

OP posts:
Treeeeeeee · 31/01/2023 20:45

We have a higher monthly income and would not consider a mortgage so high - it's crazy that you are considering it

flowerycurtain · 31/01/2023 20:46

I'd look into the increased costs of a bigger home. How dream house are you talking? The kind where you have to have custom made curtains as you can't buy the right size in dunelm?

LookingOldTheseDays · 31/01/2023 20:47

Namechange1377 · 31/01/2023 20:33

@BHRK late 20s and early 30s

At that age I'm guessing you might be planning children soonish? Which will impact both your earning potential and outgoings.

pompei8309 · 31/01/2023 20:47

Namechange1377 · 31/01/2023 20:44

In the one and done camp for children, 5 year old has just started school.

I am 4 days a week, I could move to 5 days a week and get extra £350 a month.

I think after 4 years of paying high nursery fees, I just want to move finally to a nicer area with larger garden! x

Go for it, is not very often when you’re lucky enough to find your dream house. If in the future you change jobs or earn more you can overpay a little every month and reduce those 35 years

plumduck · 31/01/2023 20:47

Namechange1377 · 31/01/2023 20:44

In the one and done camp for children, 5 year old has just started school.

I am 4 days a week, I could move to 5 days a week and get extra £350 a month.

I think after 4 years of paying high nursery fees, I just want to move finally to a nicer area with larger garden! x

Is that before or after tax?

LeatherSoledShoes · 31/01/2023 20:49

Worriere · 31/01/2023 20:40

I would track at the moment.

I don't think the OP can afford to hedge her bets on a tracker with those ratios tbh.

Forecasts predict that the base rate is likely to settle at circa 4% at the end of the year after going above that in Q2 this year.

The tracker I was offered was 0.35% above base rate. That'll be more than the fix I've just taken by the weekend if the base rate goes to 4%.

enoughisenoughiwantittoend · 31/01/2023 20:49

Namechange1377 · 31/01/2023 20:33

@BHRK late 20s and early 30s

At your age, I'd go for it if it really is the forever home.

Over pay as much as you can without leaving yourself crippling short.

Holidays are lovely, but I'd forgo amazing holiday for budget ones/no holiday if I had my dream home

adviceplease93 · 31/01/2023 20:50

Our income at the moment is around 4.2k per
Month but we are still paying about 500 per
Month on nursery and my wage will go up about £300 a month when I return to full time hours from 32 hours in September when DC starts school. Our current mortgage is £402 a month but looking to move and I'm nervous about taking anything above about 850 a month 😂 but we are in the north so this is realistic! I think it's a really large percentage of your income and personally wouldn't feel comfortable but we spend a lot on holidays/ going out etc so it's all priorities isn't it!

Original poster
Namechange1377 · 31/01/2023 20:52

Quite a mix of opinions then which I'm pleased about, shows exactly why I'm going back and forth with myself!

OP posts:
Original poster
Namechange1377 · 31/01/2023 20:53

@plumduck after tax.

OP posts:
hihihibye · 31/01/2023 20:53

There are slightly better interest rates if you put your details in to 'compare the market' 4.18% for a five year fixed.

Worriere · 31/01/2023 20:54

LeatherSoledShoes · 31/01/2023 20:49

I don't think the OP can afford to hedge her bets on a tracker with those ratios tbh.

Forecasts predict that the base rate is likely to settle at circa 4% at the end of the year after going above that in Q2 this year.

The tracker I was offered was 0.35% above base rate. That'll be more than the fix I've just taken by the weekend if the base rate goes to 4%.

Show quote history

But when is she realistically likely to complete though.

My mortgage deal is up in September and there's no way i won't be going on to a tracker.

hihihibye · 31/01/2023 20:54

Oh and I would probably go for it. If you have sat down and gone through your outgoings. Even if it means you can't holiday for a few years!

RaiseTheStakesAndMakeTheLastWordDuckhead · 31/01/2023 20:55

The time to stretch yourselves is in your 30s and 40s, so yes, I think reasonable on that income. There will always be people who are (understandably) risk averse and are stressed by that amount/length, but if you have stress tested yourselves and done a budget, go for it.

Personally, I would fix. We bought our dream house last here and fixed for 5 years. I don't care if rates drop, I like knowing I can afford my mortgage payment. My last house I also fixed for 5 years and interest rates dropped loads! This time we fixed and they immediately rose. It's just nice to be able to budget.

As I type this from my dream home, tits deep in mortgage (that we are overpaying and will have paid off by the time I'm 53) I don't regret it at all!

Greenfairydust · 31/01/2023 20:55

Rates are due to go up again this week.

I am actually going to use this as a justification to make a lower offer on the house I have my eye on...

I really don't want o saddle myself with a large mortgage and certainly not for 35 years...

Original poster
Namechange1377 · 31/01/2023 20:55

@flowerycurtain it's probably actually the same size as our house is now, with the addition of a conservatory and seperate garage but the higher price tag is the outside space (large driveway and large garden) and a much much much better area.

OP posts:
Pootle40 · 31/01/2023 20:56

Namechange1377 · 31/01/2023 20:21

A dream house has come onto Rightmove, forever house material, We have joint income of £3700 monthly.
If we sell our house for £290,000, have deposit of £135,000, the house we would like is £465,000 and on a mortgage of £330,000 we are looking at roughly £1600 monthly mortgage payments, Fixed rates are 4.89% or tracker at 3.94% £1400. (35 years)

I know no one has a crystal ball, but what are opinions- are mortgage rates going to stabilise? Are they going to rise?

Should we fix, should we track?
Is mortgage of £1600 insane?!

I'm not sure a mortgage company will permit such a high mortgage v income tbh.

Caramac555 · 31/01/2023 20:57

I remember reading that if over 42% of your net income is spent on mortgage you are mortgage stressed. I have done it in the past and I was stressed, the budget was really tight.

nca89 · 31/01/2023 20:58

Our mortgage is going to cost about that much when we refix and our income is over £6000, I'm really nervous about it, it's making me quite uncomfortable even though it's "technically" affordable, I certainly wouldn't have considered a mortgage that size when our income was lower.

Original poster
Namechange1377 · 31/01/2023 20:59

@Pootle40 Nationwide , who we are already with, are offering 5.5 income.

Which reminds me we already have £140k borrowing at 1.89% until November 24, so we would only be borrowing £190,000 at the higher rate for the time being...

OP posts: