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.

do you think? personally, I don't see it.

I do at a push the one after. The economy really isn't doing well and I suspect it will only get worse. I work in public affairs and there is definitely a sense of wanting from politicians and lobbyists for interest rates to start falling.

Yeh, I wouldn't be surprised if there's a bit or nudging and bribing going on behind closed doors just to make it appear that interest rates are falling. 2024 is a bit of a "false" year because politicians will do anything and say anything right now. Even Jeremy Hunt came out with absolute rubbish and most people think his budget changes will be overturned if a different party win. Apparently, taxes usually rise after a gen election based on historical data. I wouldn't take 2024 as a year of truth in anyway. I agree, things will probably get worse.

Sadly for the politicians and the public the boe really don't have a say in when interest rates fall or rise anymore
Lowering rates out of step with america will be suicidal for the UK economy

I don’t agree that banks are doing what they want irrespective of the BoE base rate. Sure, some lenders have higher mortgage rates than others depending on whether they are trying to win new business or not. And some have raised rates again lately having previously dropped them because the BoE are taking longer to reduce the base rate than previously expected, but lenders do take account of the base rate. When the BoE does eventually reduce the base rate (now expected to be in the summer)then we will see mortgage rates falling as a result. In the same way that when the BoE was increasing the base rate at every meeting, mortgage rates were increasing as a result.

@qpmum123

"And since you don't seem to be buying or selling, and probably live in your parents' basement, why does it matter so much to you"

Nail. On. Head

🤣🤣🤣🤣🤣🙌🏻👏🏻 👏🏻👏🏻👏🏻

"When the BoE does eventually reduce the base rate (now expected to be in the summer)then we will see mortgage rates falling as a result"

That's not necessarily true. As you know from this thread, fixed rate products are based on SONIA swap rates. Whilst these are influenced by the BoE rate they also take account of market expectations of future rates. I have previously illustrated how those SWAP rates have been increasing at the same time as the BoE held rates.

Market expectations are still that the BoE base rate will fall several times during 2024 and therefore I think it’s fair to say that mortgage rates will fall this year too.

I’m not saying there is an absolute correlation between the base rate falling and mortgage rates immediately falling too, but there is a strong correlation between the two things. The base rate is forecast to fall by about a point (maybe 0.75 of a point) by the end of the year and that will obviously have an impact on mortgage rates.

Even that is not true. If BoE rate has been fixed but SONIA Swaps increase then how does that demonstrate strong correlation?

There is some correlation. The BoE is one factor. Market expectations have to take a view far beyond the BoE forecasts horizon.

I’m surprised if you don’t think that mortgage rates will be falling by the end of the year following BoE reductions to the base rate. But time will tell I guess & personally I’m pretty sure that the title of the next of these threads will be lower than this one (& not because of me cheating!)

I have no idea where rates will be in 6 or 12 months. That is why I do not like it when people are told rates will be falling or rising.

To me, assuming that rates will fall and everything will be just fine over the terms of a 25/30/35 year mortgage is a dangerous assumption to make. It is an assumption that is being made by lots of people at present.

I do think that mortgage rates are most likely (nothing is ever 100%) to fall somewhat in the second half of the year as the central banks cut base rates. However, I do not think that we are done with inflation at all. I strongly suspect that we will see more of it over the next few years, even decades and rises in yields and base rates again, possibly much higher ones. That's why I keep suggesting caution in terms of debt because lots of people could really be stung by higher rates in the future.

We could always have another bet for the end of 2024 say?

We could but I really don't have much interest in the rates themselves. They will be what the market needs them to be and they will fluctuate pretty wildly. Sometimes up, sometimes down. I'm more interested in people understanding the effect that rates have on their mortgage - for example illustrating how a short term mortgage is quite insensitive to rates whereas a long term mortgage is very sensitive. My fear is for those people taking out 30/35/40 year mortgages, to get the lowest repayment possible, then finding prices drop, their LTV evaporates potentially to zero, and then being stuck paying the most horrendous SVR's going because they cannot remortgage to anyone else.

sure you're not just worried about losing another bet?

Fighting talk Twiggers. Fighting talk. No, I'm confident in our existing bet. There's still a long way to go to assess that one and I don't like humiliating anyone by constantly beating them. 😆

Okayyy 😂

https://uk.finance.yahoo.com/news/halifax-becomes-fourth-major-lender-153550782.html#:~:text=Halifax's%20increase%20will%20come%20into,much%20as%200.2%20percentage%20points.

It all comes as such a ‘shock’ yawn…

Over five times your salary for a shitbox or a skybox is a large red flag, when will the public wake up from their slumber?

Why have sales volumes fallen so much?

“This is a bitter blow to borrowers, "

Yes, I"m sure millions of people are devastated that they won"t get the chance to go into negative equity, LOL.

There's a rental crisis in London I have the means to buy I'd rather build equity then pay a landlord to build equity

Answer the what to do in retirement question @CrashyTime and I would be more convinced. You aren’t wrong that banks are making a lot out of this but people need homes.

"There's a rental crisis in London"

Yes, people who piled into BTL and AirBnB with borrowed money are about to get their arses handed to them.

This ^