5% mortgage rates

[SaturdayGiraffe]

Just read this article saying to expect 5%+ rates shortly.

https://www.theguardian.com/business/2023/may/25/uk-homeowners-and-first-time-buyers-warned-to-brace-for-5-plus-mortgage-rates

UK homeowners and first-time buyers warned to brace for 5%-plus mortgage rates

I just don’t know how people are going to cope, and it could go even higher.

is it like this https://www.rightmove.co.uk/house-prices/details/england-75826340-8700733?s=65f54c03b16e1e6ed7c80a19fb1a631f23c56de97d65754fcae5bf28ca4df023#/

This is ex council and I think in London, they should build more of these flats!

Wow that was an amazing deal.

My son was buying a flat which fell through to a ground rent issue
however the HA offered him a scheme of rent to buy where his rent is fixed for 5 years at 30 percent below the market rate and at the end he can buy or walk away

He already has a 50k deposit 10k in his help to buy LiSA
So he’s decided to wait and see in a year or so his partner should be earning more so they can go into together and buy and get a better deal

but at the moment he’s paying 900 a month for a beautiful 2 bed 2 bath apartment it’s a really unique apartment / building

he’s got a friend / lodger staying and with his partner paying a share he’s is basically living rent free 😂

it’s just costing him council tax and bills

so his plan is to stay there with the cheap rent and see what happens to the market but save more women money while living cheap

@Onegingerhead well done!

It is with HSBC if anyone's interested. But our LTV is 37%, we've been overpaying frantically.. I appreciate not everyone can do this, tho.
Also, DH and I are not exactly spring chicken so needs must.
I hope all the people reading this can get a deal they are happy with when the time comes..

The best HSBC 5 year I can see is 4.06% but with £999 fee. Maybe they waive the fee for existing customers? (This is looking as FTB on MoneySuperMarket).

No problem 😌

You must have thought I was a right idiot! 😆

I thought you were mistaken 😉

https://www.purepropertyfinance.co.uk/news/a-brief-history-of-average-mortgage-interest-rates/

The 80s and 90s rates below on that link were pretty nasty for us although the property values were less. Eg in about 1990 we borrowed 4x or more my salary on an interest only deferred interest (some interest added to the capital sum each month) as the only way to afford our last house and sold that one at a loss in 1996 in the property crash. Then whilst we owned it we had Black Wednesday when rates rose 5% in one day (briefly). We had used every last penny of savings to buy that house and both worked full time. After inflation since 1990, we paid about £634,000 in today's money for the house.

Our joint full time salaries again allowing for inflation since 1990 were £115,0000.

It was a bumpy ride even then and difficult today too.
I got my mortgage repayment letter by post from my lender today (as just paid off the loan on the house after that one. I am 61).

this is grim reading. yet not even a year ago this board was full of people eager to dismiss the valuations they'd received and find any which way they could to pay over the amount the bank had told them a property was worth. how things change.

Yes! That sort of thing
or these
https://www.rightmove.co.uk/properties/134128859#/?channel=RES_BUY

https://www.rightmove.co.uk/properties/132997205#/?channel=RES_BUY

weve got quite a few of the top type I posted locally. However, they’ve all been bought and converted to one house now. Such a shame.

Can someone please explain MIRAS thanks

My mother in law says the 1990s housing crash meant she could upgrade from a 1 bed flat in z3 to a 3 bed victorian terrace in the same area. bought flat 1 in 1989 for 70k, sold at 40k, bought current house for 100k.

I am not sure it would work out the same for us.

Why? It hasn’t existed since 2000.
You can still Google it though.

Umm because it's been mentioned multiple times I. This thread have you bothered to read the thread? And I would like a simpler explanation than trawling through Google to understand the context of the pp's - hth.

Yes I’ve read the thread but as mentioned, MIRAS was abolished in 2000.
And a simple Google search will tell you what it was 🤷🏼‍♀️

I love this. A house in 1994 was 18k compared to wage of 10k. It’s now 180k, do you think the wage is now 100k? Is it fuck.

I think they may have slightly better rates for existing customers. It might be the case with other lenders, too. I was expecting to get 4.23% free fee rate based on what is on HSBC website, but when I phoned this was what I got offered.
Now checking on MoneySupermarket and as I entered HSBC as my current lender it says "Stay with HSBC and switch your deal" and 4.07% is there. I could get 3.97% with £999 fee with them, too.
Second best rate offered is currently with First direct, 4.03% with £490 product fee (dunno why), but would need to apply, submit the documents and wait.. and based on what was happening in the autumn when rates were getting pulled in the blink of an eye we decided not to wait.

is anyone with a year left to go on current mortgage deal considering paying the exit charge and remortgaging. Mine is 3% of mortgage balance....

Why?

Cos mortgage rates might be 7% next year????

https://www.bsa.org.uk/BSA/files/5c/5c180498-5e52-4a41-b022-5821c25f3cbd.pdf
That is a better link than my last one above, showing interest rates since 1939.

MIRAS came in in 1983. Before that "tax relief on mortgage interest payments in Great Britain in 1970–71 is estimated at £302 million. The number of houses on which this relief was granted is estimated at about 5 million." My parents remortgaged in about 1970 so presumably had it. You could set your mortgage like your pension contributions and charitable contributions today against your tax. MIRAS meant "at source" so I think you paid the lender less probably only against your lower rate of tax at source.

In 1983 a couple could set interest on £30k of their mortgage against tax.
My recollection of it when we first had a mortgage was it was at so low a level compared to London house prices it was of minimal help with massive mortgage payments sadly.

Thank you

They might be, yes. However the optimistically on hear think inflation will come down.
Do the maths.
On balance, if you can get less than 5%, seems to be worth doing.