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.

Because the recession will be global, see China, and Germany (both major manufacturing countries economies).

I mention Japan because its stock market is at an all time high, yet the currency and bond markets are in the toilet. High asset prices (including houses) doesn’t necessarily mean the overall economy is healthy.

https://x.com/suburbandrone/status/1757783571434029360?s=46

US will be the last to turn.

Again you’re listening to the narrative of the media that’s peddling the status quo.

It’s just the same as it was with inflation when they parroted the same lines i.e. there’ll be no inflation - inflation is transitory, inflation won’t go any higher, oooh dear…

Sadly, the UK is now in an official/ technical recession as expected. Yes, it will spread worldwide and several other countries are already there. The US has been doing an awful lot of fiscal/ monetary stimulus so has avoided one so far. If it were not for all this, they would have probably been in recession by now too.
Obviously the politicians and media are playing it down. What do you expect?!

Article published on i website today:

Thursday’s economic growth figures alongside Wednesday’s surprise hold in inflation keeps the prospect of the Bank of England cutting interest rates in May “on the table,” economists have said. The Office for National Statistics’ gross domestic product (GDP) data confirmed that the UK was in a recession after it had two successive quarters of negative economic growth. This followed January’s inflation figure staying at 4%, despite expectations that it would rise slightly.

Sanjay Raja, chief UK economist at Deutsche Bank Research, told i: “The GDP data, alongside the inflation data keeps a May rate cut on the table. The onus is now on successive data points, mainly wage and inflation, to give the Bank ‘sufficient evidence’ that inflation can sustainably return to target. The next month and a bit will be crucial.”

In the past, interest rates have fallen in response to recessions. This is because high interest rates can inhibit economic growth, as they lead to high borrowing costs, which in turn mean people cut their spending. Lower rates, meanwhile, are often used to stimulate the economy.

I suspect the Bank of England is worried about stagflation.

Labour basically started the house price bubble, it would be priceless if one of the biggest collapses in history happened on their watch.

Yes, that is worst of all worlds for debt holders.

Just wanted to update, our fixed ends in July

Yesterday we spoke to our usual mortgage broker and managed to reserve a deal with the co op bank at 3.94% with a £750 product fee. It means our payments will only go up about £70 a month which is a huge relief . We were paying £600 and they'll be £672. We also plan to overpay because we'd assumed it would go up a lot more

This is on a house currently worth £260000 which we have 99000 left owing

She has advised though some mortgage companies are starting to pull deals . so if anyone on here needs to renew or get a new mortgage, now is the time 🤞🏻

Glad to read your update @janicegarvey that’s a good rate and must be a relief to have got sorted

Good advice. The SONIA swap rates are currently increasing.

It is such a relief

The last 18 months have been an awful worry for us

I suspect One or two on here will be disappointed that I won't be living in poverty paying my massive irresponsible debt 💸

😛

Fixed also ends in July!. Have you accepted your offer. My rate is 4.37% (ltv 65%), mortgage payments going up by £250 (in london so this is better than a lot of people and its 17% of our net income). I have been accepted by coventry building society.

Are you accepting the mortgage offer straight away or are you waiting.

Good decision. The swaps may fall a bit more later in the year but I would definitely choose security and affordable repayments too.

From Sky News now:

"Santander to increase some fixed rate mortgages from tomorrow

Santander has announced it will increase all residential and buy to let fixed rate mortgages for new customers from tomorrow.

Rates will increase by as much as 0.34%.
It is also raising selected residential and buy to let fixed rates in its product transfer range.

Mortgage expert Lewis Shaw has warned the high street banking giant "won't be the last lender that is likely to increase their rates this week in response to volatile swap rates".

He advised those buying or remortgaging to get their documents over to their broker as soon as they ask them.

"This way, you'll hopefully not miss out on lower rates because once they're gone, they're gone," the owner of Shaw Financial Services told Newspage."

"Rates will increase by as much as 0.34%. "

LOL, someone who had a mortgage back in the day would laugh in the bank`s face at that and think they had misplaced the decimal point. What an absolute mess this country has become that those numbers even get mentioned on the news.

I suspect you will find that most people are not all that interested in your personal circumstances, but rising mortgage rates are great news because they help to pop the massively damaging house price bubble, that is definitely something to celebrate!

Nahh there's defo some who would really like us smug mortgage holders / debt junkies to suffer financially.

Never named anyone though so wondering if I hit a nerve @CrashyTime 😊

Financial Times article today: Bank of England may begin cutting rates before hitting 2% inflation target

The Bank of England might begin cutting rates before inflation falls to its 2 per cent target, its governor said, as he pointed to “encouraging signs” that price pressures were easing. Speaking to the Treasury select committee on Tuesday, Andrew Bailey said inflation had “come down very rapidly” in the UK, adding that the technical recession the economy entered last year is likely to be “very small”. “We don’t need obviously inflation to come back to target before we cut interest rates,” Bailey said. “I must be very clear on that, that’s not necessary.”

On Tuesday, Bailey declined to comment on when exactly the first rate cuts could come, or how deep they would be. But he said market expectations that the BoE was going to cut rates during this year were not “unreasonable”, adding: “I’m comfortable with a profile that has cuts in it, but that is not to say when or how much.”

Bailey told MPs that the BoE expected headline inflation to return to target temporarily in the spring before picking up again later in the year. He stressed that the bank wanted to ensure that inflation returned sustainably to target. “We are looking beyond that temporary period of being what we think will be down at target. We want to get it down and keep it down.”

https://www.ft.com/content/96fd7e8c-1940-4d41-94b8-d557efa5ea51

Bailey is part of the reason we are where we are. He ‘saw through’ the ‘transient inflation’ at the beginning, then had to rapidly play catch up.
He’ll do what the markets dictate. Watch what America does. Wild cards this year are the elections, the two ongoing wars, and most of Europe in a recession.

'Watch what America does'
Yes, they will just follow The Fed.
Lots of potential geopolitical events which could upend things, never mind the economic situation!

Bailey consistently and impressively gets every single decision wrong. He is constantly saying how things aren’t how he anticipated or how surprised he is and I am constantly shouting at the telly “it’s your JOB to know these things. why are you surprised? Because you are USELESS!”

The chatter now on financial media is more rate hikes from the U.S, people with loads of debt just cannot be smug in that scenario?

People who have just secured a new fixed rate deal won’t be affected by rate hikes in the US though - or China or Japan or any other country?

I don't understand why you are talking about anyone being "smug" @crashytime, everyone is just trying to do the best they can to house themselves, surely?

Crashy doesn't have the best opinion of homeowners, we're all "debt junkies" with "vested interests" in promoting lies about the property market etc. Sometimes he is quite kind to people in the process of buying, however.

Which makes me wonder at exactly what point we turn from decent people looking for a home into smug debt junkies🙃

I can't speak for Crashy, but I have very low opinions of anybody who says "my house is my pension", "you can't lose on houses", "my house earnt more than me last year", etc.

A house is a home - not an asset unless you're a professional landlord. If you think it's an asset then I'm happy for your "investment" to crash like any other asset can do.