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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:
GoldilockMom · 31/01/2023 22:28

But if it’s a better area your insurances go down.

If you have steady jobs and can bear being short term skint then it’s worth the risk.

The markets can’t tank too far as that puts too much negative equity into homes.

We did the same, the short fall forced is to get better jobs and increase wages.

If that’s what you want go for it.

Sometimes it’s better to jump when everyone else is running away.

Original poster
Namechange1377 · 31/01/2023 22:28

By porting our current mortgage (£140k fixed until Nov 24 at 1.89) , borrowing additional £190k at 4% for 35 years would be £550+£850 totalling £1400 which is a bit more appealing than £1600....

Of course in November 24 it will increase but we would be used to higher payments by then and hope the interest rates may settle by then ...

OP posts:
sicklycolleague · 31/01/2023 22:31

Our mortgage is £1,640 a month for a 2-bed flat but, London

Nik2015 · 31/01/2023 22:36

You sound like me 8 years ago!
We’re finally moving this year, in a few days.
No one can predict what’s going to happen.
If you can afford it I’d recommend you give it a go.
I’m still annoyed at the 330k houses I could barely afford which are now 700k!!!!!

Mumtofourandnomore · 31/01/2023 22:37

But OP what if you can’t get the £140k in 2024 ? What if your equity plummets if house prices decrease ? Or you have an 85 or 90% LTV and the interest rate on that £140k is 6% rather than 4%, that willl add another couple of hundred on…….

MysteryBelle · 31/01/2023 22:39

I don’t see how you pay the bills and groceries etc with that high of a mortgage.

Normally I’d say, if it’s your dream house, go for it. We stretched a lot to buy our dream house and had to go without vacations for the most part, and it was hard, but we had a little more margin than you have.

Feefee00 · 31/01/2023 22:39

We have a monthly mortgage of £300 and a monthly income of around 8k. I'm worrying about paying £1600 a month on my income when upsizing. There's no way I would stretch myself in these times with an income of £3700.

JustAWeirdoWithNoName · 31/01/2023 22:41

That would be too much of a stretch for me - especially with the uncertainty of future mortgage rates (I know that it's always a risk). Our monthly income is just over £4k and our mortgage is £250k - definitely wouldn't want a bigger one on our current income..

Feefee00 · 31/01/2023 22:45

I always take 35 year mortgages out. It lowers your obligation if you are sensible you overpay cash flow is really important. I've taken 35 years on paid it off and nearly paid another one off. 35 years isn't necessarily a bad thing it gives you wiggle room if things change as you aren't obliged to pay the 25 year higher payment.

Bellie710 · 31/01/2023 22:47

God we have an income of roughly £4000 a month and no mortgage,there is no way i would take on a mortgage that size!

Interest rates are expected to keep rising, a bigger house has much bigger bills no way for me, I love holidays etc and I couldn't live like that worrying if I could afford to go away etc.

socialmedia23 · 31/01/2023 22:47

I am trying to upsize and this will increase our mortgage to £1700 (for a 3 bed flat). I am trying to be strict on this and we lost out on our dream flat today because of this.

Our incoming is £6200 though. And only 12k left on DH student loan so with our overpayments, this will mean our incoming would be £6500 in 2 years even if salaries don't increase..

SS1983 · 31/01/2023 22:47

My husband and I pushed ourselves when we bought our house, as property is a great investment. But I know that’s not the best placed advice and you should do what feels comfortable. Depending on your work, it’s probably the time where you might actually make the biggest leaps in your career based on your age.

Also, I think it’s commendable how much you have saved for your deposit and that you are thinking about this so pragmatically. You will do great whatever choice you make! It’s a great problem to have :)

Beentheredonethatgotthetshirtlearntthehardway · 31/01/2023 22:51

Personally I wouldn't, we have a slightly higher income. My kids are now in their teens and always bring up why didn't we go here or do this when they were little. Truth was we were both working full time and couldn't afford it due to the mortgage payment. Enjoy your kids while they are of an age to make memories that last forever.

FlimFlamBam · 31/01/2023 22:53

My friends did this and we didn’t. But we never had any worry about money, they certainly did plus we had a couple of overseas holidays most years and they had at least 6 years where they couldn’t even afford a weekend away. They will have more money to leave their children, they had a surprise child at 42 as well which added pressure.

IbizaToTheNorfolkBroads · 31/01/2023 22:53

Have you accounted for stamp duty?

BarmyArmy22 · 31/01/2023 22:57

Have you factored in the actual move costs not just the monthly payments? So a chunk for stamp duty, solicitors, moving etc?

Starryskiesinthesky · 31/01/2023 22:58

A lot depends on your outgoings but if you think you can do it I would. You usually end up having more money as you get older as well. We were paying around £1500 a month on our mortgage and had a similar income but 3 children and it was doable. As you say, you can work extra if you really needed to. I think stretching yourself (within reason) is good if it gets you the bigger house/garden in the better area.

LookingOldTheseDays · 31/01/2023 22:59

Feefee00 · 31/01/2023 22:45

I always take 35 year mortgages out. It lowers your obligation if you are sensible you overpay cash flow is really important. I've taken 35 years on paid it off and nearly paid another one off. 35 years isn't necessarily a bad thing it gives you wiggle room if things change as you aren't obliged to pay the 25 year higher payment.

The OP is looking at a payment of 43% of her income. There is no wiggle room in that.

That's a world away from taking on a long mortgage with a low payment that you can easily afford.

BarmyArmy22 · 31/01/2023 23:01

Beentheredonethatgotthetshirtlearntthehardway · 31/01/2023 22:51

Personally I wouldn't, we have a slightly higher income. My kids are now in their teens and always bring up why didn't we go here or do this when they were little. Truth was we were both working full time and couldn't afford it due to the mortgage payment. Enjoy your kids while they are of an age to make memories that last forever.

That's sad. I hope you point out you were working hard to provide for them. If they are in their teens, there's still time to holiday together? (and they are more likely to remember it than when they were little!)

Happyhappyday · 31/01/2023 23:02

I absolutely would not. Our take home is 3x yours after putting £4k/month into pensions, so we have a lot of flexibility, our mortgage is only slightly bigger and I would not want it to be more. It will be a millstone around your neck.

LookingOldTheseDays · 31/01/2023 23:04

My kids are now in their teens and always bring up why didn't we go here or do this when they were little.

Sad. And pretty disappointing that they would take that attitude tbh.

I grew up in a poor home, and by the time I was in my teens I knew better than to ask my parents why they hadn't paid for us to do XYZ, and wouldn't have dreamed of guilt tripping them about it.

Doris86 · 31/01/2023 23:06

That’s a massive percentage of your monthly income. I wouldn’t do it. I’d rather stay where I was, and have more disposable income to be able to enjoy life and do what I wanted, without constantly watching the pennies.

ManAboutTown · 31/01/2023 23:11

I work in finance and in a role where we have to be very aware of the interest rate environment.

My guess on mortgage rates is that they will stabilise or come down a little. Some of the inflationary drivers are falling away and guessing it will drop back to more normal levels this year.

What you ought to consider as well though is that a price correction is on the way - 10-15% that hasn't really washed through yet.

Personally looking at the information you have provided I would sit tight for 6 months and then re-evaluate. Think you might get less for your current house but the stretch to what you want will be less as well

MrsFrugal · 31/01/2023 23:16

I was in a similar position OP and we went for it our mortgage is 1850 per month on a low rate at the moment but it is the dream and we love it, overpaying to help mitigate the cost but went from extremely comfortable to abit arse twitchy of if im honest. Would I go back? Not at all, Income around 6k per month, no childcare costs, potential to earn more, mid 30s

sussexman · 31/01/2023 23:18

ManAboutTown · 31/01/2023 23:11

I work in finance and in a role where we have to be very aware of the interest rate environment.

My guess on mortgage rates is that they will stabilise or come down a little. Some of the inflationary drivers are falling away and guessing it will drop back to more normal levels this year.

What you ought to consider as well though is that a price correction is on the way - 10-15% that hasn't really washed through yet.

Personally looking at the information you have provided I would sit tight for 6 months and then re-evaluate. Think you might get less for your current house but the stretch to what you want will be less as well

Pretty much exactly what I'd expect as well.