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.

Mortgage rates could dip below 4 per cent by next summer

Hopes are rising the property market may be past the peak of rising rates, giving fresh hope to homeowners due to re-mortgage or get on the property ladder.
Several brokers have told i that they expect some lenders to have to cut their rates on five-year mortgages to below 4 per cent in a bit to gain customers in a flagging housing market.

The growing optimism comes as the Bank of England MPC committee prepares to decide whether to maintain the base rate of interest, currently at 5.25 per cent, on Thursday this week, or increase it.
Several experts claimed mortgage rates will fall regardless of whether the base rate remains at the same level, as it’s expected to, due to the need for lenders to attract buyers, assuming the Israel-Hamas war does not escalate further, spooking financial markets.

https://inews.co.uk/inews-lifestyle/money/property-and-mortgages/mortgage-rates-drop-below-4-summer-saving-700-2714310?ito=push-notification&ci=plHAM7EpLG&cri=oWWuPTedvD&si=cssdIvAnxCT_&xi=56861e79-4094-4d03-8095-220d61ca36ad&ai=2714310

That sounds very positive @Twiglets1 maybe it's peaked sooner than we thought

Maybe ... we do have to wait to see what happens with the Israel-Hamas war though.

It does look as though the base rate will stick at 5.25% at the next BoE meeting anyway.

We could do with some below 4% rates when we come to remortgage. I think I have become a bit obsessive with mortgage rates and trying to save to overpay when we come off our current rate.
Having looked at various scenarios with interest rates has really made me appreciate how quickly things can become scary.

Just checking in with you lot as looking for a better deal for the next 5 years. I do wish BOE would hurry up and meet!!

Another one obsessively reading about rates too. Hurry up Thursday! Although it seems like we are looking at BoE rates being held, I guess this is better than rising.

Negative for mortgage rates:

https://www.bbc.co.uk/news/business-67262339

We don't often talk about average mortgage rates on these threads, more often focussing on how high or low rates could go. But it's interesting to note (at the end of this article) that "In the UK, the rate on an average five-year fixed residential mortgage was 5.87% as of 31 October, down slightly from levels seen earlier in 2023 but still high compared with a few years ago"

https://www.bbc.co.uk/news/business-67282657

That's quite sucky for homeowners. That's around the figures % we are expecting as FTBs with 95% LTV (I checked with our broker two weeks ago).

One thing that has been painful to watch is how much existing homeowners with decent equity are being absolutely slammed by lenders this year. I was naively under the impression that the more equity you have in a home, the better rates you get. Looks like that gap is really pretty small these days.

It will be interesting to see what the Fed do with their base rate today. Most commentators seem to think it won't budge.

I would have expected it to be slightly lower for a 5 year fix tbh. Still, at least the rate has come down since earlier in 2023. I guess It's not too awful for existing homeowners considering it's an average so takes into account everyone including people with poor credit rating paying exceptionally high rates.

We've seen on this thread and the previous one that people with a higher LTV are able to secure better 5 year fixed rates than 5.87%.

Quite a few posters with higher LTVs have reported being able to get rates of about 5.5% or lower, even down to rates starting with a 4.

Blimey. You know times are getting tough when fund managers are having these discussions in the pub instead of wine bars.

5.39% best 2 year rate with a big high Street lender
4.92% best 5 year rate
If you are remortgaging anytime in the next 2 years I can't see rates getting much better than this tbh unfortunately

It varies depending on how much deposit people have @Alexalee and whether they are paying an arrangement fee upfront.

For example, Santander have a 5 year fix for 4.64% with a £999 arrangement fee (40% deposit).

Or 4.74% with a 25% deposit or 5.15% with a 10% deposit.

Haha. Well spotted!

Fed holds US interest rate:

https://www.bbc.co.uk/news/business-67290817

Market expectations are at 93% that the BoE base rate will remain at 5.25% today, according to Sky news. We’ll find out for sure at midday.

According to the same article (can’t link as I’m on my mobile), markets expect the rate to stay at that level until September or possibly November 24 before starting to fall.

Interest rates seem to be about right atm. Nicely slowing the labour market, where I think our main problem is, but I’m not at all sure we are going to see any meaningful reductions in rates.
Economists can’t see more than a few months ahead and that’s without external shocks to the system
And I wouldn’t be at all surprised if a “run on the pound” isn’t manufactured by the City on the more and more likely change of Government.

I think that the conspricay theories are a bit fanciful. The idea that they are interested in affecting the political outcome is nuts. They just want to make money any way they can. And the City is only a tiny part of the international market.

🙏

No chance of a change today
Will be interesting to see how they all vote again though
Last time it was 5 hold 4 raise
I can see 7 2 this time
Maybe with an outlier of 1 voting to cut

They may cut rates because they are panicking about the upcoming recession.

The may raise rates because they know that hey need to get ahead of the Fed in order to protect the currency.

They will probably act like rabbits in the glare of the headlights.

For the second meeting running, the Bank’s Monetary Policy Committee has decided to leave interest rates unchanged at 5.25%, a 15-year high.

The move suggests the MPC is sticking with the ‘Table Mountain’ approach to fighting inflation – leaving borrowing costs at their current high levels until it is confident that inflation will fall back on a sustainable basis to its 2% target.

The Bank of England’s policymakers were split 6-3 on today’s decision.
The majority, who wanted to leave interest rates unchanged, were governor Andrew Bailey, deputy governors Sarah Breeden, Ben Broadbent, and Dave Ramsden, chief economist Huw Pill and external committee member Swati Dhingra.

https://www.theguardian.com/business/live/2023/nov/02/bank-of-england-interest-rates-decision-15-year-high-inflation-growth-business-live

Always nailed on.

They are following the Fed, who I think suggested some time ago 1 more rise before the end of year.

Since there is only one meeting left, then there will be a rise at the next one. Of course unless US economic data predicts otherwise.

I think the more interesting info is that the BOE are expecting rates to remain higher for longer. "Waiting next year until the market picks up" is looking like less and less of an option.

The BoE is giving a press conference at which Andrew Bailey tells the press conference that inflation is forecast to drop to just below 5% in October, down from 6.7% in September.

That fall will be driven by the drop in energy bills last month, due to the drop in Ofgem’s price cap at the start of October.

Inflation is expected to stay around that level for the rest of the year, Bailey predicts.

https://www.theguardian.com/business/live/2023/nov/02/bank-of-england-interest-rates-decision-15-year-high-inflation-growth-business-live#top-of-blog