6% mortgage rates; trouble a'ht Mill

[Twiglets1]

This is a new 6% mortgage rates thread as the last one is almost full.

Thanks to KievLoverTwo for suggesting the second part of the title to reflect all the squabbling these threads are causing. Which could be a thing of the past of course. But realistically, it won't be.

Could you possibly link to the last thread so I can have a read? thanks

Sure it will be some light reading for you (not)

https://www.mumsnet.com/talk/property/4844102-6-mortgage-rates?page=1

Thanks for the new thread. I quite enjoy reading the posts, though I skip most squabbles unless they seem informative. 😄

Interesting title but shouldn`t the other one just change to "7% mortgage rates"?

I don't think we're gonna see those, Crashy.

Why not?

Not at all, Crashy! There have been many examples of fixed term mortgage rates going down recently so I was actually toying with the idea of changing it to 5% mortgage rates return.

According to this article from 2 days ago, The current average mortgage rate for a five-year fixed, 85% loan-to-value mortgage is 5.49%, down from 5.51% last week. The lowest rate for this type of mortgage is 5.06%.

https://www.rightmove.co.uk/news/articles/property-news/current-uk-mortgage-rates/

Because I don't think the base rate can get to 6% and above without breaking our economy.

We would probably get downgraded and no one will lend to us. Government won't be able to afford to service their debt.

And there's bugger all economic growth to claw back more taxes to service it. Quite the opposite is happening.

Edit: I suppose there is always the possibility that the Tories adopt a Burn The House down policy because they know they are going to lose, to leave Labour with an utter mess. In which case, maybe they will.

You might think the Tories would be tempted to do that @KievLoverTwo

But I think they are so deluded they still think they can win the next GE.

@Twiglets1

LOL

Aww, bless 'em

Base rate will go where it needs to go to stop a run on the pound, it hit 15% last time there was a proper currency crisis and the BOE don`t control mortgage rates, that is the bond market, specifically the "10 Year Yield", mortgage rates in the U.S hit 8% today.

We’re not at 7% rates yet. We may or may not hit that but no one knows at the moment so surely better to go with what it is currently. Mortgage rates are actually down from the recent peak at the moment at 5-5.5%. They may rise again but may not.

Thank you for the new thread. Who knows what will happen next? I don't think rates will come down as quickly as BoE/economists first thought, no one knows what the future holds. Higher oil prices due to the Israel-Hamas war won't help bring inflation. With all the turmoil and horror in the world at the moment, everything feels uncertain.

You may well be right @spring33 about rates not coming down as quickly as once forecast because of the terrible war.

Though I do still expect them to come down slightly in 2024 from where they are right now. And certainly not to rise to 7/8% as Crashy seems to expect.

My DD was approved for a mortgage in early July, and her sale is going through albeit SLOWLY. Anyway every time the rates change, so does her 5 year fix. When first approved it was at 5.74% and it has decreased in about 4 incremental steps so now it is at 4.9%. The good thing is that she is locked in at that rate so they can’t increase it, but they improve the offer each time they change their rates. She is hoping she might get one more downwards rate change before she exchanges in mid-Dec and then it is set… but even if not she is v happy with 4.9 for 5 years.

That does indeed sound like a good rate - good for her & hope her purchase goes smoothly.

Good luck to her that's great news x

Ahh thank you both. It’s very exciting for her!

You're welcome honestly I love hearing positive stories like this

There's certain people around who are desperate to peddle doom and gloom and wish awful high mortgages on everyone naming no names 🤦‍♀️ as clearly they're hoping for a big massive crash so they can move out of their mums spare room probably but this doesn't seem to be forthcoming. I just try and scroll past their many posts and try and find some positivity and hope

The Bank of England governor said he expected a 'noticeable drop' when October's inflation figures are published next month due to lower energy bills. The comments came two days after official figures showed inflation was stuck at 6.7%, adding to speculation that more interest rate hikes would be needed. Worries about the prospect of rates remaining higher for longer, as well as the impact of the conflict in the Middle East, have rattled global markets over the past week.

But Bailey, in an interview with the Belfast Telegraph, appeared to be sanguine about the latest inflation figures, as he told the newspaper that the Bank had not been expecting 'much change' anyway. He also stressed that a measure of so-called 'core' inflation – which strips out volatile factors such as energy and food – had dropped from 6.2 % to 6 %.

'Core inflation fell slightly from what we were expecting and that's quite encouraging', Bailey said. The Bank, which is tasked with bringing inflation down to a 2 per cent target, has previously forecast that it will fall below 5 per cent by the end of the year.

https://www.thisismoney.co.uk/money/markets/article-12654615/Bank-England-boss-Andrew-Bailey-eyes-noticeable-inflation-fall.html

Breaking the economy is a feature not a bug. It’s what higher rates are intended to do.

Rates can and probably will rise further as we get more energy price shocks because of the global instability which right now is worse than it’s been for at least 50 years.

The outlook is bad. Lower rates are probably temporary and bought about by the normalcy bias in people who have never seen anything different.

The outlook does look bad. If the economy starts growing, that probably means higher rates, if it doesn’t then higher unemployment.
With so much world turmoil, no one can say where we are heading. It’s why I would go for a 10yr mortgage fix atm. I can’t afford 8% rates in the next ten years and I do think there is a chance, if not good a chance that we could be there sooner or later.

I would never take out a 10 year fix unless rates were REALLY low, like 2% or less. For one thing, your situation could change and then you would have to pay a high redemption penalty to come out of it early. Also, no mainstream financial expert is forecasting 8% rates in the U.K.

Still, each to their own. I expect 10 year fixes are considerably lower than 2/3/5 year fixes at the moment.

Yes, but how many mainstream financial experts were forecasting 5% interest rates two years ago?

They were predicting interest rates would rise but no, they didn’t foresee the war in Ukraine which meant rates rose more than generally expected.

Now they are predicting interest rates will fall slightly in 2024.