Page 7 | 5% mortgage rates

SaturdayGiraffe · 2023-05-25T17:10:15+00:00

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 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.

curtainsfringe · 26/05/2023 08:16

@Twiglets1

So what if fewer people were on fixed rate mortgages?

The point I was replying to was about repossessions. If you're struggling to understand why fixed or not impacts repossessions numbers then 🤷🏻‍♀️. There was no comment about how difficult the process is...

People I know had interest free 95% mortgages in the 90s. I also know of people who got preferable rates because of their jobs. Do you have a link that they didn't exist?

curtainsfringe · 26/05/2023 08:17

Hard to get on the property ladder at any time…gets on the ladder at 18

🤣🤣

Twiglets1 · 26/05/2023 08:21

How can I provide a link for something that didn’t exist?

Twiglets1 · 26/05/2023 08:21

Question to @curtainsfringe

Spectre8 · 26/05/2023 08:23

I have 2yrs left on my 1.69%. I started on 3.6% 10yrs ago so I'm not too worried because when I was on 3.6% I was stress tested above that to 5% and I was warning less than I do now. I've paid off a significant amount of capital already so even if it hits 7% by the time I need to remortgage ill be okay.

curtainsfringe · 26/05/2023 08:23

@Twiglets1 no, just provide a link saying they didn't exist...

changedforanswer · 26/05/2023 08:38

Meanwhile a lender announced 100% mortgages. Remember the 80's when people were repossessed on mass after borrowing too much. People are encouraged to get the biggest house they can afford and really stretch themselves and then are baffled when they cannot afford the payments.

sexnotgenders · 26/05/2023 08:52

Spectre8 · 26/05/2023 08:23

I have 2yrs left on my 1.69%. I started on 3.6% 10yrs ago so I'm not too worried because when I was on 3.6% I was stress tested above that to 5% and I was warning less than I do now. I've paid off a significant amount of capital already so even if it hits 7% by the time I need to remortgage ill be okay.

Maybe you could try and keep the bragging a little more stealth next time? But I think I can speak for the group when I say we're all very happy that you're ok 🙄🙄

Thanosette · 26/05/2023 08:55

Just a reminder that taking out debt has ALWAYS been optional.

optional[ op-shuh-nl ]

left to one's choice; not required or mandatory:

oiltrader · 26/05/2023 08:55

DogInATent · 25/05/2023 20:16

There's an argument that 5% should have been within the affordability equation for taking out the mortgage, but 5% plus 10% inflation and the current cost of living almost certainly wasn't within the affordability algorithm applied to most homeowners.

I'm not sure the UK has an entirely healthy relationship with the price of property.

totally agree with the obsession on property in the UK x

DancingQueen2019 · 26/05/2023 08:57

Just literally embarking on selling and buying now. Am worrying slightly in case my buyer pulls out over the increased mortgage rates.... equally so am hoping the rates stay the same and don't rise too much! We have £142,000 of borrowing fixed until November 2024 but are borrowing an extra £140k/£160k for our new house , at the new raised rates.

Am hoping by the time july/August rolls around the interest rates have stabilised and still not rising!!

VegetablesFightingToReclaimTheAubergieneEmoji · 26/05/2023 09:02

Roselilly36 · 26/05/2023 08:02

@newstart1234 yes, seems crazy now, I know, but we did, I had to wait for my 18th birthday to sign the paperwork! I don’t think anyone in our family thought our relationship would last, but we have, still together and happy.

I bought my flat at 18 in the early 2000’s. I put £5000 in and was earning £12,000 a year.
the flat was £125,000.

we self certified on the mortgage so could get almost any amount.

the flat now is worth just shy of £500,000.
you’d need to earn £70,000-£100,000 a year for that now. (Not a starter admin job like me).

unfortunately I bought it with a total abusive cunt who financially ruined me. And I could only dream of buying that flat now.

Original poster

SaturdayGiraffe · 26/05/2023 09:03

Twiglets1 · 26/05/2023 07:56

No - the government have made it much harder for lenders to lend unrealistic amounts & will make them help homeowners to not lose their home.

I'm not saying there will be no repossessions, there are repossessions every year but it will not be like 1991 where 75,000 people were repossessed (apparently that represented 1% of the total number of mortgages).

Show quote history

You’re sure the govt will step in? I don’t have that much faith in them. I think Labour would but not the Tories.
Could they make repossessing residential houses illegal? What would banks do instead? If they have shareholders then don’t they have a duty to secure their investment more than keeping people in their houses?

And how long will this last? A couple of months or possibly years?

OP posts:

Thanosette · 26/05/2023 09:04

'Hope' is not a strategy as many will soon find out, unfortunately.

VegetablesFightingToReclaimTheAubergieneEmoji · 26/05/2023 09:04

Thanosette · 26/05/2023 08:55

Just a reminder that taking out debt has ALWAYS been optional.

optional[ op-shuh-nl ]

left to one's choice; not required or mandatory:

And the other option?

we rent privately. The future looks incredibly bleak, barely any available, huge prices for all of them. That’s before we look at “retirement”. There’s no way we can afford to save enough to pay rent through retirement.

imagine what the housing benefit bill will be when the current renters can’t work anymore?

the massive care home deficit as there will be no homes to sell.

newstart1234 · 26/05/2023 09:06

Thanosette · 26/05/2023 08:55

Just a reminder that taking out debt has ALWAYS been optional.

optional[ op-shuh-nl ]

left to one's choice; not required or mandatory:

Borrowing may be (often or even mostly) optional but shelter is not . In Housing in uk it is more financially prudent to buy. I'm emailing my tenants today to say the rent will be increasing again ...

VegetablesFightingToReclaimTheAubergieneEmoji · 26/05/2023 09:06

SaturdayGiraffe · 26/05/2023 09:03

You’re sure the govt will step in? I don’t have that much faith in them. I think Labour would but not the Tories.
Could they make repossessing residential houses illegal? What would banks do instead? If they have shareholders then don’t they have a duty to secure their investment more than keeping people in their houses?

And how long will this last? A couple of months or possibly years?

Show quote history

I genuinely think them stepping in, in 2008 has caused a lot of the issues now. We needed a drop, an adjustment. They stopped it.
they cannot let it happen now, it would be so much worse.

DrySherry · 26/05/2023 09:12

SaturdayGiraffe · 26/05/2023 09:03

You’re sure the govt will step in? I don’t have that much faith in them. I think Labour would but not the Tories.
Could they make repossessing residential houses illegal? What would banks do instead? If they have shareholders then don’t they have a duty to secure their investment more than keeping people in their houses?

And how long will this last? A couple of months or possibly years?

Show quote history

I think the government simply can't step in this time. The nations credit card is absolutely maxed out. That's why the mini budget caused a bit of temporary turmoil - we are soaked to the hilt in public debt. They simply couldn't justify doing anything significant to keep house prices high. They also know that by allowing house prices to reset the economy will eventually benefit after things settle. Don't get me wrong - this is not an "idea" that they have had. It's simply reality forcing a change of direction. They know it will probably loose them the next election but now have no choice imo

Twiglets1 · 26/05/2023 09:13

curtainsfringe · 26/05/2023 08:23

@Twiglets1 no, just provide a link saying they didn't exist...

There is no link saying they didn’t exist because they didn’t exist.

Why can’t you provide a link saying interest free mortgages did exist since they were apparently common enough for you to know more than one person who had one?

DrySherry · 26/05/2023 09:15

VegetablesFightingToReclaimTheAubergieneEmoji · 26/05/2023 09:04

And the other option?

we rent privately. The future looks incredibly bleak, barely any available, huge prices for all of them. That’s before we look at “retirement”. There’s no way we can afford to save enough to pay rent through retirement.

imagine what the housing benefit bill will be when the current renters can’t work anymore?

the massive care home deficit as there will be no homes to sell.

Show quote history

This is exactly why they have to let values fall this time. Once that starts working through rents will also become more affordable. Thats assuming we don't continue to have half a million new residents a year though !

oiltrader · 26/05/2023 09:16

SaturdayGiraffe · 26/05/2023 09:03

You’re sure the govt will step in? I don’t have that much faith in them. I think Labour would but not the Tories.
Could they make repossessing residential houses illegal? What would banks do instead? If they have shareholders then don’t they have a duty to secure their investment more than keeping people in their houses?

And how long will this last? A couple of months or possibly years?

Show quote history

banks would not lend if they are exposed to people not paying the loan back and keeping the house. Basic stuff really x

VegetablesFightingToReclaimTheAubergieneEmoji · 26/05/2023 09:17

DrySherry · 26/05/2023 09:15

This is exactly why they have to let values fall this time. Once that starts working through rents will also become more affordable. Thats assuming we don't continue to have half a million new residents a year though !

Show quote history

They can only do that when they have a plan.

e.g having built the swaths of council houses needed.

FourFoxSake · 26/05/2023 09:18

Regardless of whether it was easier or harder back in the 80s/90s, the reality now is that there will be lots of people who...

a) have held a mortgage for a decade or more and never experienced high interest rates; it's all very well telling them 'they are going to rise again one day' but being told it and believing it will happen soon are too different things.

b) planned for interest rate rises but did not expect such a huge increase in CoL at the same time that would compete for their money

c) planned for interest rate rises but financially were hit very hard by the pandemic and are still struggling to get back on their feet from that

d) had no ability to plan for interest rate rises but will lose their homes anyway (e.g. adults who rent or children)

All the 'I told you sos' in the world don't help them. Regardless of being able to withstand an interest rate rise myself, I still will be very sad to see so many people struggle to keep up with 5-8% mortgage rates.

newstart1234 · 26/05/2023 09:19

Housing benefit's a great way to transfer public money into private hands. I expect this to continue as long as the Tory's can get away with it.

curtainsfringe · 26/05/2023 09:19

Why can’t you provide a link saying interest free mortgages did exist since they were apparently common enough for you to know more than one person who had one?

@Twiglets1 you are saying no one was on an interest only mortgage pre 2000? My parents & in-laws had one plus other relatives....