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.

The major reason that the US economy is showing 'resilience' is because of all the fiscal and monetary stimulus and debt. Without that, no growth and a recession already. Also, US private sector including households are better protected than Europe with longer term, fixed rates on their borrowing. This will change at some point, maybe this year and, yes, I think political pressure will definitely play a part in decision making too.
Totally agree with you that the 'talking heads' will try to talk everything up, the MSM is heavily politically influenced and vice versa. As @Alexalee, Economists are very frequently wrong, especially those who subscribe to rather outdated ways of thinking and are politically influenced.

"Surprise surprise!" It is always "unexpected" or "surprising" isn"t it? Good to see a deeper level of discussion here though as opposed to the usual press releases from VI"s.

lol - you’ve never quite explained how I have VI when I’m just someone living in my own home but ok 😂

You are confusing "The Fed" (worth paying attention to) with "U.S analysts" (worth ignoring or doing the opposite of what they say) don"t you know about Enron, Global Crossing, World.Com etc.? Analysts were still promoting these companies right up until they went bust, U.K, U.S, elsewhere they are all VI"s who work for banks, banks are heavily invested in every scam that they promote! It isn"t the geographical source of the information that I am talking about, it is whether or not the writer is paid or influenced to create a certain narrative i.e "Rates must go back down - keep borrowing!"

The press releases you constantly post have a VI, you may have a VI in prices staying high I don"t know, but as other posters have said you need to take a wider view of what is going on to be taken seriously.

I love it when you tell me what I need to do Crashy

Only three pages to go and you can shut this down, LOL, this is turning into a very enlightening conversation about the realities of debt and interest rates, probably not what you had in mind for the thread when you started it?

I reckon there’s a budding underlying mumsnet romance in the wings…

Funny to think when I started this thread you thought it should be named 7% mortgage rates but of course everyone has been posting about their fixed rate deals starting with a 4% or 5% not one 7% I don’t believe? And rates have gone down since the start of this thread so the next one will be lower than 6%.

Only between you & Crashy.

You basically have no idea where rates are going, all I am saying is that there are indications that inflation is still very much around and people thinking about new mortgage debt need to think at a deeper level than some VI piece saying they should just keep borrowing like mindless sheep.

See I get what you're saying in principle @CrashyTime and the bigger picture but why so crabby about people needing a home?
We just bought, we needed a house for our family and had equity/deposit of £145k, no homes for that round here so borrowed £230 to buy at 375k.

Mortgage payment is 14% of income which is comfortable, we like the house and area and don't care what prices do as we plan to stay forever and see the monthly repayment as the price of a roof over kids heads. We're not mindless sheep but we need somewhere to live.

It would have been mindless and daft to spend £1k a month on private rent taking a gamble prices might drop or we might get a slightly better mortgage rate next year (having spent £££ on rent and moving costs) your comments just don't translate on an individual level when you're slagging off people needing a place to live

Without speaking for Crashy, what he is alluding to, is that just because of your unique set of circumstances (large deposit/salary) that doesn’t equate for the rest of the nation when the average salary is £35k and the house/earnings ratio is 8.3.

That’s why that ratio will naturally fall to mean reversion, just like it always has through time. That may not effect you (house is home rather than investment etc) but will have a devastating effect on those who have over leveraged themselves and who may not get out of negative equity for a long time.

Unfortunately around London the only way to buy is to get the max mortgage you can. I guess with the hope that your salary will rise quite quickly over time.
Worked in the past when you could buy early on in your career. Doesn't look as good when you are buying your first house in your 40s and are near your peak wage though.
Gifted deposits from family are the norm around our part of London which keeps prices high and unaffordable.
Genuinely can't see it ever getting back to when a couple of professionals can buy a family home without maxing mortgage and getting help with deposit.
3 bed semis are 750k even with 2 people on 50k borrowing 5x earnings need 300k deposit to buy with fees etc

It's always darkest before the dawn. This phrase sums it up really. Desperation then breakthrough.

You can get on the housing ladder in London for a lot less than £750K for a 3 bed. It just means you have to go out to zone 4 and those places are getting livelier due to the influx of young people who can't afford further in. Yes, it means a short train ride in rather than the tube. For example, New Eltham to London Bridge fastest trains take 14 minutes, Kidbrooke about 12 minutes or look along the Thameslink or Elizabeth lines. Frequent trains on these lines.

www.rightmove.co.uk/properties/86466339

An example, short bus ride to two stations.

Lovely house @Turmerictolly but it isn’t really London. It’s a suburb of London which isn’t quite the same thing so no wonder prices are cheaper there.

Picking your next fight!! 😆I'm not a Londoner (my Dad was. He was a proper Londoner - a Cockney!). But Sidcup is as close to London (RM definition) as Wembley and Kingston-on-Thames. Anyone outside London would call that..... London. I'll sit this out now!

I agree Twiglets but still a London Borough nonetheless and more affordable if you need a house but still easy to reach the trendier places. Even these suburbs are rising in price quickly so sensible young people have hard decisions to make.

Back in the day Zones 1-3 were affordable for younger people (in fact you couldn't give flats away in places like the East end or Brixton) but now, in my experience, they're having to look further out or accept paying half a million or more for a poky flat.

I think the well worn path these days is to have a great time in your 20's renting more centrally but settling further out in your 30's+, particularly when kids come along. Unless of course you have very high salaries (quite common in London) or inheritance/help from parents.

A slight diversion from interest rates (as is the London prices conversation!) but this is in from Rightmove. Asking prices surge to 10 month high.

https://www.mpamag.com/uk/mortgage-types/residential/asking-house-prices-surge-to-10-month-high-rightmove/481506?hsmemberId=1942651&tu=&utm_campaign=&utm_medium=20240318&_hsmi=298643996&_hsenc=p2ANqtz-8e0QdaKArU018uuSwD6DlWwBS-ADRr8otMiqQ-WxIWlsvsrcXel545bPyRfbsrsB2j-l9JdzX6OfUcNiOPJRa0-t0zQA&utm_content=&utm_source=

I’m glad we agree it’s a London suburb & totally agree places like this are a good option for many sensible young people who can’t or won’t pay the crazy prices for living more centrally.

We bought in Stoke Newington as our starter flat back in the day (on 2 junior public sector salaries!) but that area is so expensive now and Brixton even more so as very trendy according to my daughter.

Zones 1-3 are completely unaffordable these days without (as you say) exceptionally high salaries or significant help from parents.

Someone tell Rightmove that asking prices are not sold prices.

"Surging" house prices could be because would-be sellers are optimistic, or delusional, or because they think "If we pitch the asking price higher and accept a lower offer, we'll get the sum we actually wanted, tee hee".

Just to keep the RM article relevant to the thread, it says

"Rightmove also noted a shift in the landscape of mortgage rates, adding another layer of complexity for potential buyers. The average rate for a five-year mortgage has increased from 4.64% to 4.84% in just five weeks, signalling a move towards higher borrowing costs."

But treat the RM index as a curiosity at best. It's INITIAL asking prices. Its ARITHMETIC means. It probably does little to weight against many sellers trying to exit at the top end (downsizing). Some bright statistician will have probably done a correlation between the RM index and proper stats like the old ONS index. That would tell us how much credence to give the RM index.

Thank you for bringing us back on track @XVGN

As the average rate for a 5 year fixed rate mortgage is currently 4.84% according to that link and the average rate for a 2 year fixed rate is 5.22%, I hope people will agree on the title 5% mortgage rates (again) for the next thread.

Obviously many people have secured fixed rates below 5% as we have repeatedly seen on this thread, but others will be higher so 5% sounds fair to me?