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.

Same for my son his original quote was 5.2 it’s now 4.8 with Halifax
he’s waiting for the next BOE announcement to see if he gets it cheaper
but if it goes up then the rate he has at the moment is fixed

I’m really pleased to hear that some young people are now being offered fixed rates starting with a 4.

My daughter will need to remortgage in 2025 so it’s a hopeful sign. My own fixed rate finishes in 2024 but it’s a small enough amount we’ll probably just pay it off.

I think my son got a “good rate “ as. FTB with almost 1/3 of the cost of the house

the rate he was offered initially at 5.2 wasn’t available online

She probably has the best rate at the moment but it seems "mortgage cut race" is continuing so she might get lucky one more time before the final date...!

www.forbes.com/uk/advisor/mortgages/2023/10/23/mortgage-updates/

Thanks. She has a special Mortgage offer from nationwide called a “helping hands” mortgsge or something. Fingers crossed for another little nudge downwards before exchange. It is taking a while as the leaseholders in the building (small, only 3 flats) is buying the freehold so that needs to happen first.

Thanks for posting that link. It’s a good way to see lots of different lender rates in one place

Interesting.

The flats in my daughters house (4 flats) are also planning to buy the freehold between them but I think they have to wait until they’ve all been there a minimum of 3 years. They have a long lease anyway of over 900 years but there are still advantages of owning the freehold outright.

The problem with buying now of course is that interest rates have not fed through to pricing yet, many people are still in denial about how much their property is worth meaning you are paying peak prices and may be caught out with higher rates down the line.

https://www.cityam.com/st-jamess-place-suspends-property-fund-as-investors-pull-cash-and-demand-falls/

Of course if you actually bought a Mill (or a shopping centre) with cheap debt then you really are in trouble.

BBC reports base rate likely to stay the same next week as job market slowing:

Interest rates tipped to be held as jobs market weakens https://www.bbc.co.uk/news/business-67194553

We are in early 30s and due to remortgage next year. Mortgage would be an increase of £300 if its a 4.89% rate and 400 if its in the sub 5%.

However, this increase would be almost entirely offset by my DH paying off his student loan (only around £5500 left on the balance so we would be able to pay it off by next year). This would mean an extra £400 per month so in a sense despite the mortgage rates more than doubling, it doesn't really have an impact on our net disposable income. We are in London. I think we are probably not alone as many of the young people who have bought in recent years tend to have above average incomes with scope to grow (or they would still be renting) or have a lot of help from parents (so impact on a smaller mortgage would be less drastic).

It's also being reported in the Guardian that "Bank of England policymakers are expected to hold interest rates at their current 5.25% level for a second time next week"

Santender cuts rates from today.

It's cheapest 5 year fix is 4.64% with a £999 arrangement fee (40% deposit)
Or 4.74% with a 25% deposit or 5.15% with a 10% deposit.

Those preferring to buy using a two-year fix with a 10% deposit can now also secure a rate of 5.7 %

Santander cuts its mortgage rates: Lender now offers three best buy deals for home movers | This is Money

https://www.thisismoney.co.uk/money/mortgageshome/article-1633400/Mortgage-calculator-Compare-true-cost-rates-fees.html

Useful calculator thanks @CrashyTime

When will interest rates start to fall?

The Bank of England will cut the base rate to around 3 per cent by late 2025, according to the latest forecasts.
That would be a substantial decline from the current 5.25 per cent, but would still represent rates rising like a rocket and falling like a feather.

https://www.thisismoney.co.uk/money/mortgageshome/article-11885727/When-rates-start-fall-Base-rate-forecasts.html

Do we know what the same forecasters predicted for rates in 2023, back in 2021?

As much as it would be good to see rates drop, I think we have a fair amount of volatility to come, what with inflation, wars, a general election etc. I certainly wouldn't want to pin my flag to the mast with a prediction (but then it's not my job, thank god!).

Exactly, they can`t predict the future, I will predict though that in the future there is a good chance that any inflation spikes will be met with rate rises, so as said (by me) many times, if you are getting a good rate now (5% is a good rate) fix for ten years if you can.

But you have said yourself that they didnt see Ukraine etc. coming, how on earth could they know what will happen in 2025! Mortgages are set by the "Ten Year Yield", watch what that does rather than listening to "experts", they dont have a clue they are just riffing away on the data as it comes in, it is noise, tune it out and watch the bond markets!

We've just dropped ours to 5.49% over 5. I'm hopeful of one more drop before we exchange. 10 years isn't available on our product, but it is fee free.

Good move.

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

I read this & also read/heard on radio they are going to stay “high” until 2028 which is a bit of a bummer.

It's almost like it can't be predicted! 🤷‍♀️

No I don't know, do you? All I know is that higher rates were predicted but I don't know what exact rates were predicted (the Ukraine war would have been a large factor in why the increase would have been underestimated).

It's all just educated opinions and as no one can see into the future, shouldn't be taken as fact by anyone. Though I do agree with the general downwards trend, so I definitely wouldn't be going for a 10 year fix personally. Even a 5 year fix would make me nervous while rates are likely to be at or very close to the peak, but people rightly value peace of mind.

We chose 5 as I have a loan which finishes just before then, so we have certainty until that's gone. Everyone has a different appetite for risk / ability to absorb financial shocks. There's no one 'right' answer as to what to do right now.

I am surprised more people didn't take out longer fixes when mortgage rates were tiny though. Unless they had plans to move with massive penalties / inability to port, it's not like those rates were going (much) lower!