Will mortgage rates go down? Worried

[Y19s]

I need to re mortgage next May. Panicking a bit as a single parent owing 220k

They might but not really expecting them to, so I’d start building up some savings to manage if your payments do go up significantly. Any scope to make overpayments to get the capital amount down?

The Bank of England left the base rate unchanged at 3.75% this morning but the vote was 6-3 split. The three dissenters wanted to raise it to 4% immediately because inflation is still high as a result of the Iran war. The only thing helping is the poor labour market which is keeping the worst price increases in check.

I think rates are far more likely to go up than down in the next 12 months.

Very unlikely.

more likely to go up

They might, yes. Or they might go up.

People are anticipating probably one .25% rise this year (Sept or Nov). That may come down again of course but I'd work on the basis of base rate being 4%.

Start talking to brokers in good time. You can agree a rate and then, if rates drop before it takes effect, switch to a lower one.

I fixed for five years recently because frankly I didn't want to come off a fix at the same time Trump refuses to leave office and causes a civil war.

Call me cynical but my last mortgage was on a Liz Truss rate and I can't.

Most likely they will increase due to world uncertainty/ Iran war/ Ukraine war etc. Also consider if going for a rate with a product fee, shorter fixed periods are more impacted by this. If certainty is important go for a longer term.

Many economists think two increases by the end of the year I'm afraid

Its more likely they will rise by next year rather than go down.

I think they’ll go up. They are still historically relatively low.

Thanks. Not sure what to do really. I could pay to get out of it now and take on on offer. Stressful!

You can usually lock in a rate 6 months before. This means you “reserve” that deal, if prices go up, you’ve sat pretty. If they go down, you can switch to something else before the end of your current deal.

I’ve gone for a 2yr deal, from 1.28 to 4.4% so it’s costing me an extra £350pm. But I wanted to do 2, partyl so it’s before the next election but also the age of my kids, I didn’t want to be trying to remortgage when also trying to look at potential university fees, so my aim is 2yrs now, and then 5 years next time.

talk to a broker.

We were 1.24% for five years ending November and lowest fix if 4.2 at £999 or 4.9 no fee with our bank. Comparison sites were all over 5%

With wars etc going on, and inflation bouncing about, it’s unlikely they will go down in the near future. The BofE are even warning that they could go up in the autumn.