When do you think rates will come down?

[biggless]

No one has a crystal ball, but?

Interest rates are currently normal! Low rates were and are an anomaly.

It's awful what people are going through and I really feel for a lot of people who are struggling.

But these rates are normal. They won't go back down.

Well a lot of people grew up and got on the ladder with that “anomaly” and were told by mortgage advisors that the rate would never go above 5% so at the end of your term at 1.95% you’d just remortgage onto the same rate somewhere else. And now our generation is in the shit. Again.

I don't think they will go much higher but the days of 1% or less aren't coming back for a long time.

I think the rates will continue to go up until they reach 7.5 base rate so.morthages could be in the region of 9 percent.

Interest rates are used to control inflation but if no one feels the full effect of the rises because of government support it won't work/will take longer.

It's not felt fully because many are on fixes or don't have a mortgage at all.

Interest rates are currently normal! Low rates were and are an anomaly.

But high interest rates & high house prices vs salaries aren't particularly normal.

I think he just repeats the status quo.

Its expected rate will increase for a year and then slowly come down over a period of 2 years. Heard that exact advice from loads of different places.

5 year fixes cheaper than 2 years fixes

Go for the 2 year as rates expected to fall around that time,.unless you absolutely need stability etc etc etc

It's just the same advice everywhere.

Over the last few months all ive seen is advice to wait and wait and wait, as the rates should improve. Oh it doesnt matter if bank base rate increases, the increase is already priced into the mortgage offers etc etc etc.

What a load of crap. The truth is they dont know.

Because if they had, mortgage rates wouldn't have been so cheap only early last year. This took them all by surprise and now they're just trying to justify their salaries by spouting all the same info.

I dont think rates will be any better in 2 years time, and anyone taking a 2 year fix right now is taking a huge gamble. Anyone waiting g a few months because they think the situation will be better again is taking a huge gamble.

Anyone who is scoffing at these rates, should have been there listening to the people who said the 4% mortgage rates were too high.

Interest rates have now come back to normal, like someone else said. The only question is how high they will go. I think the next 2-3 years will be very unstable and for rates to come back down to the levels they are today could take between 5-10 years.

All this talk of rates stabilising in 2 years time so take a 2 year fix will just lead to more pain for people in 2 years time.

The economy is in tatters. It isnt gonna be fixed in 2 years

Which is why there will have to be a correction, but that won't happen if prices are kept artificially high by supporting mortgage payers.

Our financial advisor told us they’re expecting IR to peak in mid-2024 then start coming down during 2025, but not to previous low levels.

That doesn’t mean he doesn’t know what he’s talking about. I would rather take financial advice from someone who has managed to make millions, than someone who is still struggling.

The best predictor we have is the implied forward curve, i.e. the future interest rates as currently priced in by the market: https://www.bankofengland.co.uk/statistics/yield-curves

The old chestnut about bankers and mortgages was "3-6-3".

You take savers' deposits at 3%.

Lend home-buyers money for their mortgage at 6%.

And you tee off at 3 pm!

It is very painful, and I think much worse for anyone with a new-ish mortgage even than the 70s, 80s and 90s. At least then, property prices bore some relationship to earnings. Yes, I winced when my SVR hit 16.5%, and again when my flat was worth less than I paid for it. But time and inflation eventually sorted it out.

However, the low interest rates and quantitative easing have come to an end, and we now face probably a decade before a new equilibrium evolves.

They are only supported by extending the term, temporarily going interest only, and staving off repossession for a year.
At some point, if they can’t afford the debt, they’ll be forced to sell to buyers who have a lot less purchasing power.
We all know what that means.

There’s been a couple of times I’ve taken Martin’s advice and it hasn’t worked out well.

When?

What a load of crap. The truth is they dont know.

Because if they had, mortgage rates wouldn't have been so cheap only early last year.

I agree with this & why I side eye a lot of the MNs who post "we saw this coming & did X", well the experts didn't!
I fixed for 5 yrs end of last yr for 2.5%

Yes, so it just prolongs the agony. The pain will come anyway and in the meantime the market is proped up inflating prices for anyone trying to buy now

The economy is in tatters. It isnt gonna be fixed in 2 years

yep particularly with the ageing population issue

This does seem to be the consensus at the moment.

That's true- I haven't thought of it that way!
His rudeness covered my clear thinking;)

Property prices are (IMO) on their way down. I guesstimate about 25% before the floor, when houses start to look affordable again. So I take 25% off the 2021 valuation on my house, and the same again off the house I want to buy. Because I have lived in this house for 25 years, it's all paper, unrealised theoretical profit that NEVER existed. But, if you borrowed more money - for an extension in the middle of the fever for example - I think that is going to hurt big time.

I think will go to 6% stay for a year or two then down to 4%

They won't ever go as low as low as they've been

Maybe they didn’t fix their energy prices as he said not too. He was wrong about that so why do you believe he will be right about interest rates?

Oh yes, I do remember he was wrong about that.

I think he will be right about interest rates because it ties in with other things I’ve read. Of course the experts don’t all agree and no one knows for sure. But I think it’s a fair prediction. Time will tell I guess.

Weren't they basically less than 1% from about 2009 until 2022?
that's a really long 5 years...