Mortgage rates in the future
November 16, 2022 at 14:33 #177493PaulParticipant
I’m in the lucky position that I’ve been able to freeze my mortgage rate until 2024, but I’m really nervous about what happens then.
Do you think the interest rates will have gone down, or should I be saving in advance knowing that a big hike is coming. Would appreciate all your thoughts.November 16, 2022 at 14:36 #177494MaureenParticipant
Your lucky to have it frozen that long. My fix runs out next year. Would be interested to hear what Jasmine and the team think because it does keep me up at night…November 16, 2022 at 14:59 #177503AndreParticipant
I hope it works out for you, Paul.
For years people have been moaning about banks having too high a threshold for mortgages and saying if someone can pay higher rent, then why can’t they pay a lower mortgage.
Well, I think this is the wake-up call. When interest rates go up it’s a different ball-game. Suddenly renting don’t seem so bad anymore.November 16, 2022 at 15:00 #177504JulesParticipant
Oh yeah, because rent prices won’t go up, I’m sure…..November 16, 2022 at 15:08 #177509AndreParticipant
Oh yeah, because rent prices won’t go up, I’m sure…..
Difference is, it’s not really the same kind of commitment. Once you come to the end of the contract you can get out of there. With a house you’ve paid a massive upfront deposit which you now stand to lose – home repossession is a nasty business!November 16, 2022 at 15:12 #177510JulesParticipant
Difference is, it’s not really the same kind of commitment. Once you come to the end of the contract you can get out of there. With a house you’ve paid a massive upfront deposit which you now stand to lose – home repossession is a nasty business!
Don’t want to be rude but I feel like you probably are a homeowner? Renting when the prices are sky high is awful. And they’re always rising. I’m not saying that interest rates aren’t going to be a challenge for homeowners but I would love the kind of energy spent worrying about homeowners focused back on Generation Rent.November 17, 2022 at 16:02 #177549Jasmine BirtlesKeymaster
It is really difficult to know what will happen with mortgage rates at any time but particularly now. Without a crystal ball no one knows what mortgage rates will be next year or the year after.
However, if I were you I would prepare for the worst and start putting money aside from now on each month, if you can, so that when you need to switch mortgage you will have some cash to fall back on. Of course, if you’re able to pay off a lump of the mortgage when you come to remortgage you will have less to pay off so, even if rates have gone up, you won’t have to pay so much extra each month as you will be paying off a lower principle.
Do be aware, too, that if things are really tough for you when you come to remortgage, you could still extend the term of your loan (depending on your age). So even if you have been paying it for five years, say, you don’t have to go for a 20-year repayment term. You could potentially have another 25-year one which would mean you would pay less per month. It’s not ideal. the better way is to pay it off quicker rather than over a longer term, but if things are really tough it’s one way of keeping costs down in the short-term.November 17, 2022 at 16:25 #177559PaulParticipant
Thanks so much for replying Jasmine, I really appreciate it!
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