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.

I expect the lenders do display all the pertinent details on their websites for people considering such a deal. But the media will just give the headline when major lenders announce mortgage rates going up or down

https://www.forbes.com/uk/advisor/mortgages/2023/08/09/mortgage-updates/

Exactly. While it's positive that lenders are cutting mortgage rates, you still can't avoid the awkward fact that as people come off very cheap fixes, a good proportion of those will struggle to pay their mortgages on the new, much higher, rates.

Increased rates affects affordability. This is what drives house prices. Therefore, there will be prices drops to accommodate the drop in affordability.

Agreed it is more optimistic news than when mortgage rates keep rising all the time but it’s still going to be hard especially for people coming off low fixed rate mortgages

My 1.99% fix is up early next year. The two year I've been offered is 5.99% and £300 more a month than current payment the 3 year is 5.8% and 10 year is 4.99%. Not sure which to go for as a worse case scenario, doubt they will come down in the next 6 months though ?

That's a very tough time for your fix to be coming to an end and no one knows for sure what would be the best thing to do. However, I personally wouldn't consider a 10 year fix at the present time while interest rates are relatively high. I would probably opt for 2 or 3 years as I expect rates to be lower by then (though nothing like the very low rate you were enjoying before at 1.99%).

Whichever one you go for, make sure that you have the ability to change it if a better offer comes along before your Fix runs out. You may find this article interesting, the main point being that "financial markets expect the base rate to keep climbing in the short run but reach a peak between 5.75% and 6% by the start of 2024, then gradually decline after this".

Also, "most forecasts anticipate a decline in interest rates within the next two years, meaning a shorter deal may prove more prudent.
This way, if rates do fall – as broadly expected – you won’t be stuck paying above the odds for your mortgage for several years. Mortgage rates are at their highest level since 2008, and you want to avoid locking in a rate at its peak".

https://www.thetimes.co.uk/money-mentor/article/should-i-get-a-two-year-or-five-year-fixed-rate-mortgage/

Why do you doubt that they’ll come down in the next six months? They’ve just come down in the last four weeks.

Affordability in terms of the mortgage calculation got scrapped this year, with rents spiralling out of control even with the increased rates Mortgage is still People’s best option. Historically renting was always more expensive than owning. people need a roof over their heads. They are either gonna pay their own Mortgage or somebody else’s

Yep, rental cost should ideally equate to the interest cost of a mortgage, but never has.

Back in 1990 a house I owned and rented out for £550 a month was costing £550 a month mortgage (residential rates with BS permission to let, as long before BTL existed). But rents have in reality in large areas of the country got a lot cheaper now, that same house now rents out for £700 a month despite the house being worth £130k.

I bought that house for £35k and this shows that it should now cost £102k

https://www.in2013dollars.com/uk/inflation/1990?amount=35000

Not quite the 5x property increase people suggest is it?

It’s only the South that has got totally screwed.

Oh, and Income Tax is now far lower than in the 80s and 90s too - it used to be that the low band of income tax was 30% not the paltry 20% people pay now, and Sunak is talking of reducing it further too!

Prices remain more than 20% higher than before the pandemic, however.

what exactly are Rics wrong about?
They are literally just reporting the numbers from the Halifax and the nationwide.

Well I hope the offer I'm holding to complete in December drops then. I've done a moneysupermarket comparison and it hasn't, so I'm not sure that these articles are true.

You think articles on the Lenders who are reducing their rates from the Telegraph, Guardian & Times are made up? I’ve also seen the mortgage rate reductions mentioned on a BBC website & the Independent.

Please just do your own research, all you need to do is Google it. Mortgage rates are still high but they are starting to be reduced slightly, especially for people with good deposits or LTVs. You won’t see a dramatic fall though.

This is why all the advice you see now is to accept the best rate you can (if you are coming off a Fix within 6 months) but make sure your Lender will allow you to jump to a better rate should one become available before your Fixed rate actually ends.

No, affordability wasn't scrapped. They were told they didn't have to stress test any more, but that DOES NOT mean they're not checking if you can afford the mortgage to start with.

There are still multipliers of salary and checking your outgoings to see what payment you can afford. And the higher interest rates mean payments are higher so people can borrow less.

You said that "Armageddon" (your words - not mine - presumably referring to house prices falling given the reference to HPC) had been cancelled. RICS do not agree and therefore must be wrong according to you.

I'd suggest that the recent small fall in mortgage rates has relatively little impact on affordability relative to the low interest rate decade.

Im not wrong at all and RICS do not support your claims in the article.

Ok. Let's tease this out of you. What did you mean by saying Armageddon has been avoided?

I've literally said in my post I did a mortgage comparison search. If that's not research then what is? 🤔

I don't know, maybe Google "Mortgage rates falling UK"

I just did and got a raft of articles about it from the Guardian, Times, the Independent etc. It's true that Lenders are cutting their rates for certain products. Whether they are the products you are looking for I cannot say. Maybe as an individual the cuts will not help you but they will be good news for someone.

https://www.theguardian.com/money/2023/aug/10/natwest-and-virgin-money-cut-rates-as-mortgage-price-war-spreads

Hey @Twiglets, Charlie didn't give YOU a mention but did cover the recent mortgage rate announcements. You could check in on his 5 fact Friday to see what he said.

I swear this must be the most passive aggressive threads on all of mumsnet.

Come on. You love it. Roll up your sleeves and watch a Charlie video with me.

This thread is ridiculous. Don't know about passive-aggressive- definitely weird and aggressive. Hiding it now

I think you should step away from the Charlie 👃

Welcome back. Do you have an answer to my question? I'm keen to understand the Armageddon and how to measure it.

teehee

hey @Twiglets1, I turned off halfway through one of his videos the other week. Are you proud of me? Do I win something?

Oh, and if Charlie's selling his house and seems to be moving into a rental or similar alternative, he must really be expecting shit to get very bad. Either that or he's expecting a massive bargain to be had a bit further down the line.

The likes of Charlie have been anticipating a massive bargain since 2002.
Most caved and bought in 2006/7 just as prices peaked, you couldn’t make it up