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.

@CrashyTime honestly not bitter at all, not sure where you got the reference to sales breaking down from.

We’re due a remortgage early next year and I’ve been checking the rates.
Four weeks ago 2yr fix no product fee 5.49%, now 5.05%. Not expecting it to go back to 2% but it’s not 6% or 7% either

Chains are breaking down due to people not being able to borrow so much now, sellers will need to lower their expectations, that is common knowledge really?

The problem is that it could be 7% when you come off the fix, that is how people got caught out after the stamp duty stupidity, fix for longer IMO, or have a cash fund ready to make overpayments if rates spike at the end of the fix.

0% chance of a raise or a cut

Ever?

In response to your question earlier today obviously

Traders have ramped up bets on interest rates being cut by the Bank of England next year after official figures showed Britain's economy shrank in October.

Money markets have priced in 96 basis points of cuts in 2024, up from 90 basis points on Tuesday, after the Office for National Statistics revealed gross domestic product (GDP) shrank by 0.3pc at the start of the fourth quarter.

It means traders have fully priced in three interest rate cuts next year and believe there is an 85pc chance of a fourth, which would take borrowing costs down from their 15-year highs of 5.25pc to 4.25pc. The cuts are forecast to start by June at the latest.

https://www.telegraph.co.uk/business/2023/12/13/ftse-100-markets-latest-news-gdp-us-interest-rates-live/#:~:text=Traders%20have%20ramped%20up%20bets,Britain's%20economy%20shrank%20in%20October.

Welcome news, hopefully. Although I guess 4.25%, if we see that series of cutes in 2024, is still quite high compared to what people have been used to over the last decade or more. It would be nice for mortgage rates to sink to something beginning with a 3 again. I think we are definitely looking at a 'stick' for the announcement on Thursday, maybe for the next 2 announcements too. I am not sure about everyone here but the CoL crisis seems to really be hitting hard now. I know people in small business retail who are really struggling.

I think we will stick at 5.25% until at least June as the traders forecast.

I agree the CoL crisis is affecting a lot of people & small businesses hard. So many people I know have said they are cutting back this year.

Quick! Cut rates!

https://uk.finance.yahoo.com/news/uk-mortgages-interest-rates-110042051.html

Not sure they can do that now though, a lot will depend on the FED (speech today) and some commentators already calling the interest rate cut bets for next year absurd

I think they will hold, you can never be sure though! I also think the rate cut bets for next year are too optimistic, another year at these rates should see property prices coming down at a fair clip. Nice, society could really benefit from a property price reset.

Crashy, why is it “absurd “ for me or other commenters to give an opinion on rates reducing next year but not absurd for you to give your opinion that they won’t reduce next year?

I wouldn’t describe either opinion as absurd.

I think you may have misinterpreted Crashy's comment as describing comments on here as absurd. I took it that they were referring to the news about the money markets pricing in rate cuts for next year, and saying that "some commentators" (who exactly?) were describing those "interest rate cut bets" as absurd.

Hmm I'm not sure about that so I'll wait to see Crashy's response if he wasn't in fact referring to me and others on here.

Positive for those expecting rate cuts next year:

https://www.bbc.co.uk/news/business-67708832

Rates held
3/9 voted for a rise
6/9 voted for hold
0 voted to cut!!

Thanks @Alexalee

As reported in the Guardian re UK interest rates left on hold at 5.25%

Money markets now anticipate Bank of England could cut interest rates five times next year, to 4%, after US Fed signals it will cut interest rates in 2024

https://www.theguardian.com/business/live/2023/dec/14/bank-of-england-ecb-interest-rates-inflation-fed-hold-business-live?filterKeyEvents=false&page=with:block-657aeece8f08d04fc5204538#block-657aeece8f08d04fc5204538

Mortgages fell ahead of the Bank of England (BoE)’s decision to hold interest rates at 5.25% following predictions that rates could drop below 4% in 2024.

HSBC has cut mortgage rates on a range of residential and buy-to-let mortgages on Thursday, with Virgin Money also announcing another wave of cuts.
But markets anticipate the BoE base rate could be slashed to 4.25 per cent by the end of 2024, with some predictions of an even steeper cut next year.

Nick Mendes, mortgage technical manager at John Charcol, said lenders have launched a “price war” earlier than expected, and predicted rates could fall below 4% in 2024. “At the start of the year, we should see more lenders release sub 4.5% , five-year fixed rates, with best buys edging closer to 4% and 2- and 3-year fixed rates also coming down to 4.5% ” he told i.

https://inews.co.uk/news/lenders-slashing-mortgages-interest-rate-decision-2808529?ito=push-notification&ci=-Yhxz6u_vE&cri=toGyf_IXYa&si=cssdIvAnxCT_&xi=56861e79-4094-4d03-8095-220d61ca36ad&ai=2808529

Unless of course there is an "unexpected" spike in inflation (unexpected like everything else they failed to predict, LOL) then we are back to the blackboard for more waffling. So far we have the ECB and BOE saying they are not ready to cut and the FED saying they "talked" about rate cuts (five minutes over coffee and biscuits at the start of their meeting probably) As far as I can see it is crash still on, LOTS of people coming off fixes this next year?

40 to 50% drop in applications will do that, they are bricking it (pardon the pun) it will end in tears for many if they are drawn back into the bubble at these prices.

I still don’t see us having an outright crash @CrashyTime. of course no one really knows, it’s an educated guess for all of us who have a keen interest in following such things, but I see a continued slow down yes but a crash no. Yes mortgage lending is down and there will always be some people who HAVE to sell and therefore will and this might be at a lower price than, say, it would have been pre Truss. However I think there’s enough people with equity small mortgages and indeed no mortgages who will just sit tight and ride it out meaning that we won’t move much lower than pre pandemic values.

So that would mean much smaller number of transactions, people staying put for much longer, and that all the "supply and demand" and "pent up demand" arguments so often trotted out were B.S?

Yes it would mean fewer transactions and people staying put for longer where previously they might have upgraded, which would indeed dampen said supply and demand. But still no huge crash. I might be wrong of course. I wouldn't mind a crash even though I already own property. I would buy another one in a crash. I have bought immediately before a crash before and it felt bad at the time when it sank in 'value' a year later! but within a few years the house had regained the value of what I paid for it and within more years doubled it.