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.

From the article: ”Justin Moy, managing director at EHF Mortgages, explained that swap rates (which impact the cost of lending money) have increased over the last few weeks, meaning rising rates are not unexpected.”

Seems there are some MN’ers that know what they are talking about, and some that don’t.

Have you tried looking at other lenders @breadandroses92 to see if you could get a better deal elsewhere?

Remember you should be able to lock in any offer your current lender makes you for 6 months ahead of when your fix ends - & be able to get the lower rate if they lower their fixed rates in that time.

Presumably this is the best rate you can get at present having gone through a good broker?

I have already said on here that if I was remortgaging, I would fix for a long time (10 years+ but obviously depends on your life plans) so that I had certainty. It does depend on whether you are risk averse or a bit of a gambler too. We are in very volatile times. Although rates may possibly fall in the short time (or not), I expect that they will rise again in the fairly near future. This is my honest opinion based on what I see in the economy but others will disagree and think that lower rates are around the corner and here to see. Time will tell!

@breadandroses92 i would be tempted to see what rate you’d be offered on 5 years. We were offered 2 years at 4.44 and 5 at 3.8 and went with latter. The only other product was a 7 year at somewhere in between those rates. Lock in what you can now and if you get a better deal by July then all the better.

I am planning to move in the next few years so making sure it is portable. In any case ttc now so may also wait a few years if it is more convenient to stay put. Not planning to take on a huge amount of additional borrowing just a flat that is 50% bigger.

As a percentage of our take home pay, the new mortgage is less than 20% of take home pay. So I can take some risk if it means a better rate. Also in 2 years would be 60% ltv.

We used a mortgage broker. This was the best two year rate at 65% ltv.

Ah ok @breadandroses92 it sounds like you have the best rate you can get at the moment then. Seeing as you are planning to move in the future ( & rates are predicted by most to go down over the next 2 years) it makes sense to me to fix for only 2 years.

is moving a huge issue if you have a long term fixed mortgage. I know you have to stick with the same lender and possibly pass more affordability tests and the product needs to be portable. But if you had a very cheap long term fixed rate, that presumably is better for you in terms of being able to move as only the additional amount needs to be at the higher rate. if the long fixed rates were 3% I would honestly be tempted.

My honest answer is I don’t know @breadandroses92

I prefer to have shorter fixes of 2 or 3 years so I have complete choice of lender without penalty when they come to an end. But I guess I would be tempted to take on a longer fixed rate if the rate seemed exceptionally good & if I had complete trust in the lender to carry on offering rates that were competitive in 5 years time or longer.

That’s because some have no skin in the game (mortgage free) and base from an analytical standpoint in what’s happening in the broader global economy. It makes no odds to me just like any other asset analysis.

We are not in a protected bubble here, no matter what the newspapers tell you. We can’t raise rates by ourselves, we can’t drop rates by ourselves, we will follow the Fed, who in turn is guided by the treasury yield rates, wage growth, employment, unemployment, inflation and GDP data.

Other posters on here either have BTLs or are worried for little Timmy that’s just bought a shared ownership new build for £500k in 2021 on a 2 year fixed mortgage and they are desperate for rates to return to yesteryear. That’s not happening.

That’s all emotion and so in turn they hang onto media articles that feed those emotions for revenue clicks.

Today’s announcement on consumer price index (CPI) reveals that it stayed unchanged in January at 4%

Economists are predicting that it will fall to 3.4% in February.

@breadandroses92 you can at times move or ‘port’ a mortgage from one property to another. I did it in to our first mortgage the aftermath of the 2008 recession when new mortgage lending was hard to find. When sales figures dropped we rented out and moved in with family/ rented at times when they were having work done in their house as we needed to move locations with work at the time. When things recovered a bit we thought about selling, mentioned it to our tenants and they offered to buy the house. Our mortgage lender at the time had closed new lending but as there were existing mortgages was open to porting it. We did not change the borrowing in any way so negotiated and bought our new house for the exact price we sold the old one at. The new place was a much bigger house but needed renovation. The closed book mortgage company didn’t ask any questions about our LTV in the new house oddly but it was chaos at the time financially. Just one example and not done as a strategy but it worked out for us. I remember thinking for weeks about how we were going to manage to mortgage and realising if we could transfer the mortgage and keep the existing lending amounts the same we might be ok. We are still here now about 3 remortgages later which saw us renovate what we could initially, overpay in the low rates then buy more land then extend and remodel and get to our last larger mortgage recently with a window to have it payed before retirement. It’s affordable enough and the last time we are extending that much, our LTV was still good. Without the work we did in our 20s - a lot of people we knew were having holidays and we were fixing up garden etc, plus all the paying down in our 30s when we were living in a house that needed a lot of work but not able to start there is no way we would be where we are now. That is one experience of moving an existing mortgage and working with difficult economic situations to make it work for us, other might have more different experiences and it would be interesting to know other stories.

No @hannahcolobus they were actually expecting it to rise slightly in January as per my post a couple of days ago

Just to repeat that when we bought our first house decades ago there were people telling us prices were about to reduce and they were smarter to wait/ going to be able to buy cheaper than us. That would make more sense if earning time was infinite and rents were cheap, or if there was any plan for renting in retirement. When none of those things are present it doesn’t seem wise to me. Obviously as not in a forum I didn’t say that back as it seems rude to be that honest in person. So they got away with pompous and critical personal judgement in person as tbh I felt I was in the better position anyway and didn’t want to point out that. I don’t know if the people who were older than me trying to tell me they were aware of future price movements because of X factor in the economy ever did make it work, certainly the massive reductions didn’t happen.

They actually expected a slight rise to 4.1% I think.
I agree with you that there is a lot of 'talking the economy up' going on. It is an election year both here and in the US so this is certainly happening in both countries. I expect Labour will be left with the massive fall out. If I were Starmer, etc, I would be running a mile!

I agree with that sentiment @CountryCob

I bite my tongue a lot more in real life to be polite. On an online forum we can be more vocal about what we see as the advantages of buying if you can afford to. Mainly as a home to live in ( that will likely appreciate in value over the long term) but also to avoid the unappealing prospect of renting in retirement.

Funny that some people interpret that as “vested interests” just because we own the houses we live in but whatever 🤷🏼‍♀️

Sky News, under the headline "Mortgage rates creep up"

"For the second day in a row, average mortgage rates have gone up, from 5.23% to 5.26% for a typical five-year fixed, and 5.59% to 5.63% for a two-year fixed, according to Moneyfacts.

Rates have been falling in the last six weeks after markets forecast a first Bank rate cut in early summer - much earlier than the previous forecast of November.

However, cautious language from the Bank of England, plus high wage growth that we reported on yesterday, which could keep inflation high, mean no one can be certain when the Bank will start cutting rates.

Thus, the regular cuts we saw by high street lenders in January have stalled in the last week or two."

https://news.sky.com/story/inflation-uk-latest-interest-rates-sky-news-money-blog-live-13040934

Wow - the second day in a row

We've had a meeting with our mortgage broker today, as we need to get a new deal by July

She's found us a really good deal, and our payments will only go up by approx £60-80. So we've been paying £600 a month and and will be £680 at most if we're accepted (which there's no reason we wouldn't be 🙏)

Phew 😮‍💨

We discussed with her that we have been considering moving but the price point we've been looking at is a big jump. So she did a quote on that And would mean the payments would be £1400-1500 which to us is an awful lot so I think we'll stay put.

New to the thread and haven’t read it all.

We sold in 2020. We were due to port our mortgage, then we didn’t get the house and couldn’t find an alternative. For various reasons we moved into rented. We lost nearly £30k in early redemption. We couldn’t buy in the time frame to get the money back can’t remember if it was 3 months or 6 months. Ended up being nearly 2 years before completing on our house. We also ended up buying a more expensive house and the original lender would probably not have lent us the same money.

https://news.sky.com/story/amp/uk-economy-in-a-recession-13071973

https://www.bbc.co.uk/news/business-68302226.amp

Recessions now being confirned.

Recession confirmations have a physiological impact on consumers.

Businesses close, jobs are lost. Real GDP productive jobs that is, not gig worker Uber Eats jobs that make up the massaged statistics.

Recessions impact the housing market, as it gives more power to the buyer and creates forced sellers.

Although the Sky article says it is likely to be “mild and short lived” and the Telegraph are referring to it as a “technical recession” nevertheless it is another nail in the coffin for Rishi Sunak & the Tories.

Your BBC link is about Japan through?

Japan situation is interesting, they were about to raise interest rates (BIG implications for borrowing rates globally, including mortgage rates) but just went into recession, are they still raising rates?

https://www.gov.uk/government/statistics/uk-house-price-index-for-december-2023/uk-house-price-index-summary-december-2023

Sales volumes for England are also interesting,, seems like some commentators have been telling Porkies about "demand" over the years? We should never confuse wanting something and having the cheap debt available to get it with real demand IMO.