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.

“Might presage what’s coming ” hmmm… equally might not and probably won’t seeing as UK interest rates are forecast to fall not rise.

That'll be the definition of "might"!

Do you think it's pure coincidence that our rates committee always meet 1-2 days after the USA's does?

Given the interaction between interest rates and FX rates, and the fact that dollar is the world's main reserve currency, the US direction of travel is always a factor that the BOE considers when making its decisions. The BOE would be foolish not to.

Having said that - the US position and FX impact is obviously not the only factor that gets considered. The BOE will be trying to balance many things, including UK inflation, UK growth rates etc. and all they have at their disposal is one very, very blunt tool. Not an easy job.

Oh yes, total coincidence. Talking about what The Fed might do is apparently really boring.

:D

Play nicely, rainy!

Do you really think we just blindly follow them in everything? That our interest rates won’t go down? I’ll remind you of that when rates do go down next year (or you can remind me of my scepticism when fixed mortgage rates rise to 8% as @XVGN says they might).

Well, people are now paying for their own healthcare because waiting lists are so long. Dental because it’s impossible to find an NHS one. Care homes.

So, in a word, yes.

I don’t think they will go down at all next year, but I also don’t think they’ll get as high as 8% - unless our Government wants to go begging for Greece style bail outs. That would have been fine 15 years ago. But most of the rest of the world are also struggling, so there’s no chance of that happening either.

If they do drop, I will be very happy for home owners and will eat my words with pleasure.

Ok you think we blindly follow the US in everything, interesting. It must really bug you that we pay our own financial experts so much when all they really do is follow the US? I could do that job!

And you don’t think rates will reduce at all in 2024? I have observed that you tend to err slightly on the pessimistic side but time will tell I guess.

Basically if Japan and China started dumping their U.S Treasuries , he didn`t think they would do this though, bond yields and mortgages would go very high. As QE is being wound down to QT there is a lot more bond "issuance" in the U.S that needs buyers, yields might have to go higher to attract these buyers.

There are very basic reasons for why we do this, avoiding a "run" on the currency would be one of them, the Truss budget was a taster (yields are at the same levels now but the bond market seems convinced that the "borrow and spend" - schemes to prop the housing market for example - days are over, that is the main reason Truss and Co. got the market reaction they did I think, they were challenging the market instead of obeying it (as they are doing now)) A full blown currency run was the ERM crisis in the 90`s, when interest rates went to 15%.

Cant find a link, sorry. Any day of the week there is interesting insight on rates etc. on Bloomberg, the best show is the midday onwards one with the three panelists, they definitely know what they are talking about and you can just pause or record and dip into the interesting stuff, watching the whole live feed isnt really of much value, but it amazes me that people with large mortgage debt don`t seem to know even the basics of how global markets can affect how much they will pay for that debt.

UK 30 Year Yield just hit highest rate since 1998, the crash is on folks, prepare yourselves.

but it amazes me that people with large mortgage debt don`t seem to know even the basics of how global markets can affect how much they will pay for that debt.

Don't blame the players, blame the game.

Our society does not set youngsters up to be financially literate; if the State took responsibility to educate us at school, how would we stay indebted for life? Or realise simple things like a tax rate freeze for years means a salary drop because it's eroded by inflation?

It just won't do to let the hoi polloi in on the fact that most of our society runs on debt, and we're a pawn in that game from the moment we are born.

Ok you think we blindly follow the US in everything, interesting

Not EVERYTHING. Most things, in the main, yes.

It must really bug you that we pay our own financial experts so much when all they really do is follow the US? I could do that job!

I am not taking that bait!!

And you don’t think rates will reduce at all in 2024?

No, I don't. I think inflation will spike because energy prices will (OPEC price fixing through limiting supply, Iran possibly entering the Israel war), plus they always do in winter anyway. That goes straight into inflation numbers. Added to that, there are 1.5 million people due to remortgage in 2024 and a lot of them will be going from rates of 0.5-3.00 to between 5 and 6%. When that gets fed into the numbers, the current rate will probably look like a Nirvana.

I have observed that you tend to err slightly on the pessimistic side but time will tell I guess.

Agreed, confirmed, but I would add the word 'deeply' for accuracy.

https://www.msn.com/en-gb/money/other/uk-30-year-borrowing-costs-rise-to-highest-since-1998/ar-AA1iyCmv

It is all over YouTube etc. though? A few minutes a day on Motley Fool (or HPC) would put you streets ahead of the average person on financial literacy, why are more people not taking the time to do this?

Me, personally?

Because seeing all the ways in which people are creatively financial screwed over makes me lose the will to live.

The only reason I'm so focused on it right now is because we're planning the most expensive purchase of our lives, at a time when my other half's anxiety about pensions is also going through the roof.

I legitimately look forward to returning to ignorance at some point in the future, until another time comes when I need to be aware of circumstances surrounding big financial decisions.

Some people have the mental capacity to deal with bad news all the time; I absolutely am not one of them. My stomach is tied up in knots and I don't sleep.

I'd like a simpler life back, thanks.

I applaud folk like you who are so emotionally invested. I just can't be - 20 years of chronic anxiety has taught me to limit what I absorb and take on.

Not you personally, people generally I mean, but you seem much more clued up than some of the posters you are responding to. Strangely I am much less emotionally invested since rates properly started going up, time to watch the long awaited fall-out now, that makes me feel quite relaxed somehow....

Starts at 1hr 20mins ;

I'm autistic. Keeping myself informed about things currently very important to me isn't even an option with the way my brain works. It's on or off. It's all over it like a rash or it knows nothing at all. There isn't really any sort of a moderate in between place for my mind to be.

Strangely I am much less emotionally invested since rates properly started going up

I don't think that's strange at all. You can see a light at the end of the tunnel that things are going to have to return to normal, and people are much less likely to get hooked on bad debt in the future. It would be weird if you weren't relieved because it's clearly made you quite upset for a very long time.

Interesting the way your thinking works, that would make being deeply into investing maybe difficult? More than a few of the investing "greats" though would say they have autistic tendencies, I think maybe Bill Gross the bonds guy is a prominent example, but don`t quote me on that.

Looks like you can quote me, but his story is more interesting than I remembered.

https://www.marketwatch.com/story/bill-gross-says-he-discovered-he-has-aspergers-2019-03-01

that would make being deeply into investing maybe difficult?

That's a skillset the other half has always had (also autistic, but with ADHD too, so far more hyper focussed than me on things that really interest him).

I leave that to him and I meddle in other things that interest me and not him, so we cover off most things in life between us because our interests tend to differ in life management aspects.

You didn't comment on the graph I posted that illustrated this. Why not repost it and explain how I got it wrong? And I clearly indicated that we don't blindly follow ,e.g. Black Wednesday.