6% mortgage rates

[spring33]

Old thread https://www.mumsnet.com/talk/property/4813815-5-mortgage-rates?page=1

New thread, let's hope the next one won't be 7% interest rates or higher.

when i was buying though in 2019, the cap for the FTB exemption for stamp duty (first 300k was tax exempt) was 500k. So I knew it was quite unlikely for me to be able to buy a house or even big flat for 500k in my area hence why i went for the 2 bed flat. After all you are only a FTB once. Now it has increased to £625k, Xenia and i both live in London and £625k is not a big budget for a house even in zone 5 london (esp in the nice areas near good schools) unless you are buying a run down 2 up 2 down with extension potential.

So it would take a long time to save to buy that 'forever home' as a FTB and its more likely your savings potential is eroded by rent. The worst thing that can happen when buying that 2 bed flat or small house is that you are stuck in it and most people don't have more than 2 children nowadays anyway.

@3BSHKATS

I honestly don't want to be snappy here but I asked if it was fixed term, not fixed rate, it said it in my post.

And after a google, I found this: A capped-rate mortgage deal usually lasts between two to five years

Back in my day interest rates were at 900% but we knew how to pull ourselves up by the bootstraps. We didn’t eat any food (except on a Tuesday) we used one lightbulb for the entire house. Holidays?? We couldn’t even afford to leave the street but it did us good and I think younger people are just meaning nowadays.

@3BSHKATS

I know your post is trying to be helpful and I'm glad you are okay now but it isn't true to say that is always works out, I know of people who lost their mortgaged houses in the 90s and 00s and are stuck private renting while heading to retirement and really struggling.

I would go without everything just to hang on to my house and the way things have been going it's still a distinct possibility

Mum is that you ??? 😳😆

Exactly @DarkWingDuck we lived in a cardboard box in the middle of the road and it never did us any harm. Kids these days eh.

I don’t know if you can read the link I posted above from The Telegraph or whether it’s behind a paywall. But it was reported in the Telegraph today and they tend to be very accurate about factual stuff like that. I would contact the Nationwide next week and ask them about it if you don’t see an announcement on their website.

You had a lightbulb??

Lucky bastards.

Indeed - there is not much point in generational comparisons whether you are old or young. Things are as they are.
On my piont about stretcying yourselves that was simply how I was / am. Not everyone is the same. I always felt I could push my career and business to earn more so had an idea income would get higher and higher (starting full time trainee lawyer salary in 1983 was £6250 - about £20k in today's money).

Indeed - there is not much point in generational comparisons whether you are old or young.

I don't agree with this. Many things that affect people of all ages are actually within our collective control.

Acknowledging that current young adults have been dealt a difficult hand could lead to fairer policy making. But it won't because people in this country refuse to accept the role that luck and timing play in their lives.

Who is it you hope will make things fairer for you? We have an aging population, which we need to pay for. Things will only get harder.

How are high house prices and high interest rates helping to pay for our aging population?

https://amp.theguardian.com/money/2023/jul/28/how-uk-house-prices-left-the-middle-class-behind

Interesting article.

Who is it you hope will make things fairer for you? We have an aging population, which we need to pay for. Things will only get harder.

I'm not actually talking about me, @LadyTemperance believe it or not. I'm 40 and don't consider myself a young adult anymore.

But now you mention paying for the ageing population, how does anything about our current set up help us deal with that issue?

We should have been investing in education, science and tech, as well as being as family friendly as possible to tackle the declining birth rate issue.

What have we been doing instead? Obsessing about propping up a housing Ponzi scheme that creates needless struggle and ties up an unnecessary proportion of household incomes in bricks.

Oh and the triple lock pension too, let's not forget that.

Thanks v much @Twiglets1! Much appreciated.

Yes. Successive governments, particularly the recent Tory ones have done pretty much the opposite of what they should have done. They've done it because they are, in the main, self serving and only think short term because that is generally the extent of their political careers. They have also done it because we haven't made and sold much for many years which leads to a deficit which they have filled by selling off UK infrastructure and companies gradually over the last 40+ years, including prime housing (great vehicle for money laundering by the super rich). They have also deliberately inflated the housing market to make people feel wealthier even as their incomes stagnated or fell in real terms. They have therefore continued to favour mainly older voters and sacrifice the younger. It isn't going to work for much longer though.

Typical MN stealth boast

This is a weird spat between you two as there was absolutely nothing wrong with your perfectly reasonable question about the capped rate, seeing as I've not heard of them since 2000. Some people just love to attack people at the slightest opportunity on MN

I thought my question was reasonable too.

For anyone who does know about capped rate mortgages...

Is the capped rate likely to be the same as the rate you would get on a fixed rate? Or does it tend to be higher than a fix, with the focus being on a reduction when you switch LVT bands?

I'm wondering if they are only beneficial to people who are close to a new LVT band but aren't able to put a lump sum in when they remortgage.

I see average mortgage rates have started to tick up again today. I guess they are expecting BOE to further increase the base rate tomorrow.
Plus figures from Nationwide today shows the falls in value are now starting to accelerate. Not looking at all good.

Which was why i said im not being snappy. I hadn’t heard of it for years either. I didn’t realise it was an option for people because it’s not being sold as an option, and for some people it would be a good one.

BOE base rate was expected to go up 0.5% on Thursday but now most economists think it will only be 0.25%.
I’m hoping for 0.25% as that would actually be good news for anyone who wants fixed rate mortgages to fall. Compared to the alternative.

I’d been starting to feel a bit more optimistic about the economic situation in the last couple of weeks but the reality is still hitting hard I think. The drop in house prices is alarming really.

I didn't think the news was that alarming.

I just checked Nationwide's House Price Index for my house. I bought in 2021, and the index says that my house is now worth 9% more than I paid for it. If I change the dates to say that I bought last summer, it says it has dropped by 3.5%.

Considering people were saying that house prices would drop by a third, I'm actually feeling fairly optimistic at the moment.

But I'm no expert on this and may be completely wrong.

And its all custard until you want to sell. Which for a lot of people is when they cash in their chips at the end