Would you move now?

[HotChocolate16]

So DH and I are looking to move. It would be an upsize and would be a house in the catchment area of the school we want our little boy to attend. We could afford the mortgage (it would be less money in our back pockets afterwards however). However I’m worried about the increasing mortgage interest rates, and if it’s going to be a case of the interest rates getting worse and we won’t be able to afford our repayments in future.

does anyone have any thoughts or insights into this. Would you move?

If you’re going to stay there a long time then it doesn’t matter so much if property prices drop. You could get a longer mortgage terms to keep monthly payments lower, then overpay if you can? We’re moving at the moment and going to get at least 30 year term

Why wouldn’t you get a fixed term mortgage if you’re worried about rates increasing?

Following as contemplating a move

I understand what people are saying about the fixed term mortgage. So id get it for 30 years and would fix my interest rate but I’m still worried when the interest rate expires how high the rates would be then and whether affordable

Interest rates are always going to be volatile. We're moving at the moment and managed to get a five year fix on 3.9%. We stretched the term out to make the payments as low as possible. The plan is to overpay as much as allowed in the next five years then bring the term down if rates are lower.

They might not be lower, but that's a risk we're willing to take. If we bought based on 20% interest rates, we'd be in a one bed flat with two kids! You need to weigh up the risks and make a judgement call from there.

I would do the maths, current interest rates what can you afford. If they hit 10% (unlikely and massive issues as lots of people can’t afford it) but what would your repayments be.

I think the highest they will hit is 7/8% currently.

They will stress test you to a certain percentage. No one has a crystal ball but this is all cyclical, they'll go up, and come back down. Depends where you are in the cycle. We're refixing now so have decided not to move.

The market has tanked here anyway.

Hard to say. How do you feel about your current house? How long until your DS starts school?

He is turning 3 in February so will start September 2024 however we will have to apply in 2023, so I know we have time but I’ve heard the rates may get worse in 2023 which is why I’m looking now. My main worry is being able to afford it now, but then the rates going sky high even after an agreed fixed term rate ends, and then not being able to afford it. I’m just wondering how high can it go really!

If you fix for 5 or 10 years (portable mortgage) by the time you come off the fixed rate, you will have paid your mortgage down by a fair amount, which should mean even if rates were higher, your repayments won't necessarily go up.

You're letting your anxiety getting in the way of logic. You need to move for practical reasons and you can fix the rate for 3 or 5 years. No one can predict what will happen long term but mortgage interest rates are already starting to fall and you can't stay where you are forever frozen by fear about what might happen in the future.