Remortgage Jan 2025

[TamagochiRegret]

I know none of us have a crystal ball, but what are mortgage rates in late 24/early 25 expected to be?

Literally no one knows. If banks longer fixes are cheaper than shorter ones they’re expecting a fall, but even they don’t know. Everyone was expecting inflation to have fallen by more than it has.

Seriously, it could be 2% or 12%. No one can tell you. You can only try and save and prepare as best you can in case it keeps getting higher.

Agree, who the fuck knows basically? Fwiw I think they'll increase more by then but don't think they will still be climbing in the way they are now, if that makes sense. I don't think we've peaked yet.

That said, it's worth applying for a new mortgage 6 months in advance. Many of the providers will give offers that are valid for that period. Then if the rates are still continuing to increase, you'll at least have the July 2024 offer in your back pocket, whereas if they're better by January 2025 you don't have to accept the offer if you don't want to.

I suspected that would be the response I would get. It's just the uncertainty is driving me crazy!

You’re not alone! I think it’s worth having a plan for a few eventualities. I’m building up some savings and will look at offset mortgages or paying a chunk off when we come of our current fixed rate in a couple of years.

Completely understandable!

I think the best thing you can do is make a plan, and think about how to put yourself in the best possible position.

So consider, are you able to make overpayments? If so, you can do that now. Or if you could get a savings rate higher than your mortgage interest rate and you trust yourself to pay it off, you could stash the overpayment money in there ready to take a chunk off it as the current rate finishes.

You could also work out what your repayments would be at eg 7%, 8%, 9% and see if it's possible to draw up a realistic budget on that basis.

If I was in the position of having a fixed rate expiring in the next few years, right now I'd be doing the following:

• Work out what my monthly mortgage payments would be at the end of my fix if the rate rose to 7%.
• Start living, right now, as if that was the case.
• If my 7% repayments were affordable now, save the difference in a seperate mortgage savings pot and learn to live on the lower disposable income. Make adjustments to lifestyle.
• If my 7% repayments were unaffordable, try to make them affordable and then repeat the above. Look at higher paying jobs or weekend or evening work. Pay down debt. Lower outgoings etc.

Ours isn't due for renewal until autumn 2026 which I thought would be fine but I'm starting to worry now. We are going to be overpaying until the term expires once we don't have childcare to pay and just try to get the capital down as much as we can. I'm worried we might be in the peak or plateau at even higher rates than now by then.

Agree with this in principle, although if there are any necessary big purchases that you need to make, now is the best time to do it. Inflation is higher than savings rates, so it doesn't pay to save.

The 'necessary' part is important here though.

I saw on bbc today that some economists think BOE could raise rates to 7%, and 6% seems almost certain.

I have stressed tested to 7% which has given me piece of mind (and intend to start saving the difference), maybe do that OP, it's helping me block out the headlines to know I don't need to worry for another percent or so. Admittedly getting twitchy at the headlines at the moment, but I gather they need to scare the market because the overly optimistic approach earlier in the year didn't do much to stop people spending! So a bit of doom and gloom is necessary, will need to stress test again if it's looking higher, higher than 7% will mean we'll need to start adjusting our spending.

Ours is due August 2024. We have done the calculations for 6 and 7%, so as of August this year we are making overpayments to match what we could be paying next year. Credit cards all cleared by this Christmas too. We are lucky we have a lot of overtime available to us. Basically being as prepared as possible.

Ours is up jan 25 too. My husband has been quite fixated on him and I’ve told him to stop! There’s no point in living as an anxious mess for the next 18months.

But we’re doing as an above poster says. We’re going to save as much as we can each month into a savings account and use it to pay off a chunk of the capital before remortgaging. We do still want to have a holiday before then because we know we absolutely won’t be doing that if rates are still 6/7%.

We should, hopefully, have had a couple of pay rises by then too. I don’t think they’ll be very high but even 5% more each will help with the monthly cost. We’re also both looking into some evening work which we can do quite remotely.

I actually don’t think they’ll still be at 6/7% though. Maybe around 4/5% which will still be a big hit for us as we have below 1% atm..but it would be affordable.

Then, it isn’t is terrible, we can cancel gym membership/subscriptions and probably get £200/m back from all of that.

But essentially we just want to build a chunk of capital to pay off with a low rate to cut a big chunk (well, maybe 10-15k) of the amount borrowed out, rather than paying it on interest when we re fix.

But I’d say at least you have a reasonable length of time to plan ahead unlike people who need to refix in the next few months.

What did you decide