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.

Negative growth, seems like EE jargon has rubbed on you. Contraction.

EE? I think I know what you are referring to but perhaps you could confirm.

Anyway, it doesn't matter what term is used, negative growth/ recession/ contraction. The meaning and effect is the same.

@Twiglets1

"It’s about the economy shrinking over 2 consecutive quarters but what does that mean for normal people just living their lives. I don’t properly understand it 🤷🏼‍♀️"

Exactly this is what I don't get. X

"The unemployment rate almost always jumps and inflation falls slightly because overall demand for goods and services is curtailed. Along with the erosion of house and equity values, recessions tend to be associated with turmoil in financial markets"

https://www.imf.org/en/Publications/fandd/issues/Series/Back-to-Basics/Recession#:~:text=The%20unemployment%20rate%20almost%20always,with%20turmoil%20in%20financial%20markets.

One thing it can mean is that if your job relies on people spending money you might have a problem

"One thing it can mean is that if your job relies on people spending money you might have a problem"

Yeah ... I work in beauty / aesthetics so I am probably in trouble then 😩😩😩 plus I'm self employed .

Mind you ...since the interest rates and everything started going up dramatically everyone's meant to be skint .
but I've had my busiest most profitable year so far so who the fuck knows .

That's good news!

Crashy is right that anything that isn't essential spending is at risk.

At present, I think there is still a lot of credit paying in one form and another, plus it will depend on your particular area, service and pricing. It may be that you are priced more competitively than your competition, for example.
Things don't usually happen overnight, although there will be some sort of sudden event at some point.

Lol, keep doing what you’re doing with your business. Because you’re obviously doing something right!

Not everyone has been affected by the relatively high interest rates & some will have benefited from them if they have savings.

Not everyone is equally skint and has different priorities. We have cut down on meals out/takeout to zero. No holiday this year or probably next but I still get my eyebrows waxed etc and my hair cut and highlighted as it's important for my
Self esteem ans I like looking professional at work. My beautician will be the last thing to go 😬

It's called the lipstick effect, where people spend on little luxuries to make up for cutting out the bigger ones, the sales of lipstick go up in a recession hence the name.

I've noticed that although people are cutting back in other areas, social and Christmas events are so busy this year, went out for a work meal and the restaurant and it was heaving.

This is definitely true.
Millennials/ Gen Zs often get criticised for spending their money on avocado toast/ takeaway coffees, spending money on beauty treatments, etc. They are clearly treating themselves to smaller luxuries because many realise that they will be unable to afford the basics such as a home of their own and want to enjoy themselves a bit.

@Jellybean85

"My beautician will be the last thing to go 😬"

Same !! And hope my clients feel the same as well

I'm training in advanced facials in January, when qualified I'll be charging around £40 per session.
it's cheaper than my other treatments and needs doing more regularly so hopefully that will be popular as it's more affordable.

Mortgage rates slashed in new year price war (headline from i today)

The country’s biggest mortgage lender, Halifax, slashed mortgage rates today with others set to follow in a “fight” to secure business at the start of the year.
The bank has taken the decision to cut rates by up to 0.83 percentage points and now offers a two-year fix at 4.81 per cent for those with 25 per cent equity in their home. Up until recently, the rate cuts have been around 0.3 to 0.4 points.

Leeds Building Society followed suit by announcing a string of cuts of up to 0.49 percentage points on its products.Rising interest rates over the past two years have caused the cost of borrowing for a mortgage to increase, which is pricing out many buyers. This has caused lenders to fall behind on their targets.In order to do business, banks and building societies are having to decrease their rates, in some cases making very small margins.

Swap rates, which determine the pricing of mortgages, have fallen and brokers expect lenders to cut mortgage rates further in the coming weeks. David Hollingworth, spokesperson for L&C Mortgages, told i rates had been dropping “at pace” and added: “That trend looks as though it could accelerate further as swap rates have fallen further over the festive break.” He said after the Halifax reduction, “it would only be a matter of time before others do the same”.

https://inews.co.uk/inews-lifestyle/money/property-and-mortgages/mortgage-rates-slashed-new-year-price-war-2833503?ito=push-notification&ci=3tY-5JFZhi&cri=WIVBuRyCM0&si=cssdIvAnxCT_&xi=56861e79-4094-4d03-8095-220d61ca36ad&ai=2833503

I am also mortgage rate watching

Barclays introduced 1 and 2 year fix both at 4.92% with no fee, but 75% LTV.

I check every day as have until end of April to make a final decision.

I want the tracker oner for 2 years, but now at 5.61% which is too much, but I won't have an early redemption fee with a tracker. only with a fixed. I could take it if drops to 5.30% or lower. so keeping fingers crossed.

d=Decisions. Decision, but not until May next year.

Not too worried about house values dropping as I was last year as the bank keep calculating my LTV at 69% and once at 64% within months-both of which just put in in their 75% category- so worked out, I have some margins on LTV to play with for another year or 2.

This all sounds positive 🙏

I am on approx 30% LtV now so fingers crossed I'll get a decent deal (well as decent as is possible nowadays)

We would ideally love to move to a bigger place but I think that ship sailed about 18 months ago 😔.

If we upsized even to a house with one extra bedroom it would double what we pay now .

@janicegarvey I wouldn't upsize if it was going to affect mortgage payments that much, it can't be worth it. May be worth thinking about again at a later date if interest rates fall enough and your business does really well but at this point in time it's surely better to be in a position where you can afford the mortgage without too much stress.

Yeah I think that's what we'll do

while it would be nice to have something bigger - I'd rather have the security .

It's so annoying though - if we'd have jumped ship 18 months to 2 years ago we'd have got a much bigger place for only £200-300 more a month . Now it would be about £700 /800 more 😠

HSBC has become the latest big UK lender to announce across-the-board mortgage interest rate cuts, with leading names announcing reductions of up to one percentage point. The bank’s new deals announced on Wednesday include a headline-grabbing five-year fixed remortgage deal of 3.94%* *for those borrowing up to 60% of the property value.

From Thursday, HSBC’s two-year fixed rate for remortgages will dip below 4.50% for the first time since early June last year, with the headline rate hitting 4.49%,* *again for those with at least 40% equity in their home.
For those looking to fix longer term, HSBC is now offering a 10-year fixed rate deal starting from at 3.99%, suggesting that the bank is convinced rates are only going lower.

Many homeowners who had to take out new mortgages last year saw their monthly repayments double as they came off cheap deals taken out several years earlier. However, experts have predicted that in 2024 there could be as many as four Bank of England interest rate cuts, prompting providers to start cutting fixed offers.

https://www.theguardian.com/money/2024/jan/03/hsbc-joins-mortgage-rate-cutting-war-with-deals-below-4#:~:text=HSBC%20joins%20mortgage%20rate%2Dcutting%20drive%20with%20deals%20below%204%25&text=Mortgage%20rates,The%20Guardian

Great news with rates dropping across the board!

But it’s all gone quiet from our resident crash fiends @CrashyTime and @rainingsnoring 🤔

lol
😜

I miss those guys 😢

Really hope this means our house will get a bit of interest now!

Fingers crossed for you 🤞🏻

My estate agent friend is very positive about the market

I've never mentioned a crash @Housebuyingfamily- check my posts. I am bearish on the UK economy and therefore housing market though- again, check my posts. You do know they are connected right? Although, perhaps not as a couple of posters didn't even know how to define a recession or describe the potential impacts.
Several other posters are also bearish but thank you for singling me out for a special mention. It looks as if you can't deal with opposing views which is a real shame. As I've said, there are a few posters like this but others will happily and politely disagree without resorting to name calling and accusations.

This is quite a handy guide as to the current standard variable rates for most lenders. This is the rate that you fall into if you do not arrange a new deal for when your current product expires.

I don't post this to scare people (the rates vary from around 6% to 10%), but to give people the heads up that they need to be preparing their finances well before their current product expires. That'll mean getting them fighting fit for evaluation by any new lender and trying to get that LTV ratio down as heavily as possible.

https://www.landc.co.uk/mortgages/svr-watch/