Nationwide mortgage rates

[GreenLunchBox]

They updated them last night and a 2 year fix is now 5.89%.

Shit just got real

Responding to:

I think anyone currently on a low fix needs to overpay as much as possible (obviously within the allowance of your particular mortgage) while on the low interest rate fix.
*

If you can get a higher post-tax interest rate on a savings account than you are currently paying on your mortgage, DO NOT overpay. Rather, put the amount you can afford into that savings account and pay down the mortgage at the end of the fixed rate term. Also, there will definitely be no penalty at that time.

Caveat - you have to be strict with yourself - treat the payment into the savings account as 'gone' and NOT available for general expenses.

Until interest rates rise high enough to kill off inflation. Watch what the Fed do and the BoE will follow, albeit, more slowly.

The BoE have to decide between very high house prices or a very weak £. High house prices will eventually be sacrificed to maintain a strong £ and low inflation as that benefits the majority. So, interest rates will rise.

It is not the majority of young people with young children though. Most of us still have very large mortgages to pay off.

@SilentHedges the majority of people have no debt and no mortgage? You sure you're sure about that?? What are we talking about here - the majority of people in the UK, across all age groups???

When I bought my first house in 1991, the rate was 15%

I'm thanking my lucky stars, that I took a 5 year fixed rate last year, at 1.54%. When that ends, the house will be paid off.

You've misquoted me, I said "The majority of people have anticipated higher rates, have their debt paid down and their economic house in order, or indeed no mortgages at all". Not that "The majority of people have no debt and mortgage". Subtle difference.

However, to back up mortgage data, I took my information from the ONS Census in 2021, across a dataset in England. I expect there will be separate reports for other areas if people are interested in those.

There's a lot of information, but an easier summary is;

24.7 million dwellings
8.8 million owned outright (36%)
6.8 million mortgaged (28%)
4.8 million privately rented (19%)
4.2 million social rent, housing associations, local authorities (17%)

The 28% mortgaged, will be a cross section of low LTV and small mortgages i.e. through family help (BOMAD), inheritances, earned wealth, nearing the end of the mortgage term, time in the market etc. Those that have large mortgages that choose to as they prefer to invest their money elsewhere while their fixed rates are low but can pay off the capital at any time. There will be those on low fixed rate mortgages coming off over the next 5 years to 2028 with ability to overpay before exiting to higher rates. Those with large mortgages but not overstretched v's salary. Those that are overstretched v's salary that will sacrifice other spending. Finally, those that are overstretched that simply can't withstand higher rates, and those people, when you look at the overall breakdown, are not the majority. That was the small sub-section I was referring to, those that do not have "their economic house in order".

www.bing.com/search?q=ONS+census+2021+dwellings+and+households&cvid=063a8e511877470183b76732905078b0&aqs=edge..69i57j0l8j69i11004.16215j0j1&FORM=ANAB01&PC=U531

This probably deserves a different thread, apols to the OP for the diversion.

I'll try the link again (Office for National Statistics Subnational estimates of dwellings and households by tenure England 2020)

www.ons.gov.uk/peoplepopulationandcommunity/housing/articles/researchoutputssubnationaldwellingstockbytenureestimatesengland2012to2015/2020

"a 5 year fixed rate last year, at 1.54%. When that ends, the house will be paid off"

Very nice move, well done!

"High house prices will eventually be sacrificed to maintain a strong £ and low inflation as that benefits the majority. So, interest rates will rise."

Bingo! And it has been a long time coming, so sell now, fix now do what you have to do, but don`t expect debt ever to get as cheap again.

@SilentHedges it would be interesting to see the spread of ages of those still owing on mortgages vs those who have paid them off. Pretty sure the latter will be mostly the over 60s, and the people owing the most from the former will be in their 30s and 40s, who are (massive generalisation here) also having to pay to bring up young children and have costs associated with working etc (travel, food out, work clothes).

Those will be the ones being hit the worst. The stress testing by the banks will have helped, but the economy at the moment is fragile and all it needs is for those to lose their jobs and not be able to get another one for a few months for some serious cracks to start showing.

@YetAnotherNameChange52 So I found this link of owned properties vs mortgaged properties by age. Unsurprisingly full ownership increases from 55 onwards.

www.statista.com/statistics/321097/distribution-of-home-owners-in-england-uk-by-type-of-home-financing-and-age/

Those figs represent the 28% of dwellings that are mortgaged. Of that age groups 25-44 make up about 50%, and likely to have kids, work and associated costs. As my previous post, within that group will be a whole cross section of financial situations.

www.nationwidemediacentre.co.uk/news/nationwide-launches-its-lowest-ever-mortgage-rate