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Sister and brother on fixed deals at the moment, but unless it comes down, not looking good in 3-5 years. Both have bought massive houses when there was low rates with 1/2 kids. Brother has business mortgage too - he's a dentist and he and business partner 'own' the business. Stress !
We're fixed at around 2.69ish until March-25, however we still owe the best part of £200k, i'm 50 so we can't stretch the terms indefinitely and have a bit of other debt so know we're probably not going to be eligible for the very best rates.
On the plus side, the house is worth in excess of £600k - so really good LTV numbers, and we've been overpaying by £100 a month since we fixed in March 2020 so that'll absorb a little of the blow.
We're aware we are going to get screwed on this - not helped by the fact i'm potentially changing jobs in the next 6-8 months which might involve a small pay cut.
Ultimate get out of jail card is to sell up and downsize, getting rid of the mortgage completely/reducing it to a minimal level.
Currently 7 year fixed at 1.something until 2025ish iirc.
Owe around 100k, went into negative equity and a drop in income around 2008 paid 4.99 % for forever whilst all around were getting low rates for years.
So I’ve not been bitten yet this time around but who knows in 2 years?
5yr fixed until july next year. until the last couple of weeks looked like we might get away with it and hit the downward trend.
Sister and brother on fixed deals at the moment, but unless it comes down, not looking good in 3-5 years. Both have bought massive houses when there was low rates with 1/2 kids. Brother has business mortgage too – he’s a dentist and he and business partner ‘own’ the business. Stress !
Maybe it is me living in the rarefied middle-class air of Dunblane, but it seems there are a reasonable number of people who have done the 'buy a big house based on cheap mortgage'...
I was listening to the radio on the way in - discussing help for mortgage payers...!? Like WTF - you have a house which you partly own and are wealthy enough to have both saved a deposit for and passed stress-tests. If we as a society decide to fund mortgage payers over those well off, then we are truly broken. I am glad Starmer said 'I would rather fund many other things for people and families than a mortgage....'
On a tracker.
Absolutely ****ing livid about it. Several hundred quid a month more for **** all.
If I'm ever within 50 yards of Kwasi Kwarteng or Liz Truss, I may well end up in trouble with the Po-Po.
I’m part of the 70% of the country who doesn’t have a mortgage, which lends weight to the argument that interest rates are a fairly blunt tool (as they only really affect 30% of us)
and given most people are on 2 year fixed rates, they have to wait 2 years to see what effect their rises have on residential mortgages...
Not only blunt, but massively delayed!
got 3.5 years left of a fixed at 2%
got offered a better rate for a 2 year fixed and so glad that I didn't take it
I am overpaying as well so should only have 2 or 3 years left on it when the fixed term is finished
and given most people are on 2 year fixed rates, they have to wait 2 years to see what effect their rises have on residential mortgages…
But not everyone is coming out of 2 year deals at the same time.
I'm in an 'interesting' situation as used my mortgage to lend money to my sister as it's a lot better than she could have got - 0.48% over BR tracker. She was doing well when rates were low but not things are a bit trickier, might have to switch her to interest only for a while
used my mortgage to lend money to my sister
Is that technically legal?
discussing help for mortgage payers…!? Like WTF
MIRAS used to be a thing
I am not a financial whizz, but had the foresight 12 years ago when we bought this house to do it well within our means.
...and to have been blessed with 12 years of VERY VERY low rates and house price increases which substantially changed the equity equations, facilitating even lower rates, thus enabling you to pay down your debt quicker. How might that have altered had your house price decreased and your interest rate almost trebled in the first 3 years?
That's the situation that many are facing now.
MIRAS used to be a thing
From Wiki about it:
"MIRAS was completely abolished in April 2000 by Gordon Brown, who argued it had become a middle class perk.[4]
Receiving MIRAS was one of the justifications given by mortgage advisers when selling endowment mortgages."
Aye, sounds a wonderful middle class and bankers tax perk...
I'm fine - I'm living in the house I bought 20 years ago on a significantly lower salary than I have now. A combination of overpayments over the years and a decent savings habits means that when my fix ends in September I'm just going to pay it off as my cash savings exceed the outstanding balance.
I'm glad I never got tempted by stretching myself for a bigger house than I actually need.
Luckily mortgage free, but still got 2 adult kids at home who are finding it very difficult to rent let alone afford a mortgage, increased interest rates will help our savings but doesn't help sell my friends house that went on the market 10 days ago - hoping someone downsizing will take the plunge ☹️
were fixed at 1.95% until MARCH 2025
Id like to think rates will be lower then, but I seriously doubt it!
Remortgaged early in '22 at a cost of £2,000. It stung at the time but I'm risk adverse so went for it despite push back from the bank & wife. I got 10 years (+6 months) at 2.04% which I'm now happy with.
We really want to move to a bigger house, but fully aware our energy prices, food and general cost of living has shot up. I think we'll just stay and do a few bits to the house we've been meaning to do for sometime and hopefully live within comfort..
I'll most likely see what happens once the full extent of the changes are felt by the market. We live in a 3 bed semi, so probably the sort of size people would be willing to downsize to. I guess we'll take a wash on our house value though, but at a smaller proportion than the big houses. Could be a good time to move after all?
Just checked- they are even offering 10 year fixed now at 4.79% at our bank. Seems reasonable to me for peace of mind! It's lower than 2 year fixed (5.64%) & 5 year fixed (5.09%) too..
My mortgage is up at the end of the month. We are going on to a interest only 2 year discounted tracker mortgage and our repayments will go up by about £200pcm. If rates don't go down by enough in 2 years then i foresee us having to downsize.
Personally i dont agree with raising interest rates as i see inflation being governed by external factors, which have now reduced in price (oil, LNG), along with corporate greed; if supermarket costs goes up by 50% and their price goes up by 50% then they've also added 50% onto their margin and they should be held accountable for this IMO. It will also hinder businesses lending which will also hinder growth, which is what the country needs so desperately right now.
Also if you are making enough money in your savings from interest rates alone then you've already got enough cash in the bank.
Fixed about 7 years ago at 3pc. Felt like I'd made a bad decision but at the time I thought the interest rate couldn't possibly go any lower and only likely to go one way ( I was wrong). Can't remember what the base rate was back then. But I'm naturally risk averse. And when I first bought a house the base rate was 4.5pc so that felt more normal to me. Hoping to pay it off next year and I'm getting some return on savings now at least. I feel lucky, but feel I've overpaid over the years due to my over cautiousness, but I figured with a long term fixed rate it would always be affordable for me. I've massively overpaid though to complete before the fixed rate ends.
Our three year fix at 2%ish is up next April so that should be fun! Luckily we were about to pull the trigger on an extension when lovely Liz decided to shat all our pants so dodged adding any more debt hoping to be able to look again when the mortgage needs renegotiating next year as rates were predicted to have fallen back by then. Doesn't look like that will happen so plans will change. We have been in our house for 10 years and not added to the mortgage in that time so our LTV is pretty low and outstanding debt not bonkers so hopefully will be able to suck up any increase by cutting back on other things.
It's all very well people saying low rates were always going to rise at some point but I don't think anyone could have predicted such a quick jump, on top of huge increases in virtually every other everyday cost, coming after years of wage stagnation! Slower changes are easier to adapt to but this is something else and lots of people will pay the price through no fault of their own. Saying that, I often wonder how people get accepted for some of the whopping great mortgages they seem to.
Been mortgage free for 8 years, but having cashed-out and down-sized the interest on savings until recently have been derisory, the Truss-Kwasi effect on my pension means that’s decreased/flat-lined whilst all other expenses have increased. I still think there’s a few more bumps in the road for the UK economy until we see the return of a sensible government that encourages the right kind of investment that will increase productivity and GDP.
What kind of "productivity" are you seeking? GDP growth in the UK and other Western nations over the last 25y is inextricably linked to debt and the creation of new money by banks in the form of debt to the tune of 85%+. The more people save, the less new money is created through debt and the smaller the economy gets.
It's not people and their aspirations, it's banks incentivising debt as they're the eventual winners and there's no regulation.
Two parts to our mortgage, both fixed for 5 years 2 or 3 years ago. Cant remember exactly what the rates were but lowish.
They're up for renewal late 25 and late 26.
At the moment, I'm still not sure whether that will be OK, or an ever bigger shock to the system than it would be now.
Looking to increase our overpayments in the interim, to provide what mitigation we can.
Another one in the doing fine camp. Like Jamesoz we got done over stuck on an SVR tracker post 2008 and Chorley BS would not reduce the SVR inline with the market. We kicked them in to touch as soon as we could. We have since lucked out on electricity fixes etc. although that deal ends next month.
Currently fixed for the remaining 3.5 years of the mortgage.
The general thought is that it'll be 2027 before rates drop back below 4.5%. That's a reasonable amount of time to have to suck it up.
Just starting to try and sell my mothers house to pay for her care bills. EAs reckon prices down 7% and a general nervousness. Not tge best time to need to sell but it is what it is.
We were "Lucky" in that the penalty free option for our next fix with our existing lender came up in April, nobody was offering anything better so we took their best offer of a 5 years at 4%, we were previously on 2%, the deal actually kicks in from August when it will cost us ~£300 a month extra, far from ideal but we're being somewhat circumspect about it, we can afford it others can't.
That deal has, of course, since been pulled...
A mate of mine managed to pull off a 1.99% offer that had been made prior to Liz And Kwazi's helpful input, they had a smaller LTV than most. otherwise almost everyone else I know is watching with growing trepidation as their own fixed rate finish date approaches.
While I have sympathy for most people’s circumstances, I do know some people who have clearly thrown caution to the wind and bought expensive properties with no calculation of what a change in circumstances will mean. I struggle to feel too much sympathy for them.
I think the problem is that in many parts of the country, pretty much all property is now "expensive" It's not a case of people "throwing caution to the wind" and buying unaffordable properties, most property has just become relatively unaffordable/overvalued to service various expectations of ever growing equity. Don't forget a reasonable proportion of domestic property isn't actually owned by private individuals but property investment funds and the like looking for minimal costs and maximum ROI.
Renters (a chunk of whom would like to buy) are still slaves to the same forces, having their rents pushed up by current "market value" and having to cover their landlord's mortgage (plus any other overheads on top).
There is I'm afraid a bit of a 'Boomercentric' POV with all of this, simultaneously telling younger generations they've over burdened themselves with debt, whilst being the one's most benefiting from that situation (presumably their pensions and savings are doing better from the BoE base rate?)...
There is a nice old bubble of inter-generational wealth and asset inequality just sat their waiting to burst, those smugly pointing out to those of us saddled with more debt as punishment for the sin of not being born a few decades earlier could at least reflect a little on how fortunate they have been over the years.
we’re 1 year into a 5 year fixed on a BIIIG mortgage (big house in Hove.. blended family = too many kids!!).. fixed at 1.19 ish %…
Would be another few K on our mortgage per month at today’s rate.. eek~! Should have fixed for 10 years!!!
DrP
This illustrates the problem, perfectly people needing housing and taking what should be a financially responsible decision, only to be be penalised down the line for choices taken by a select few, allegedly to fight inflation, but epically failing to do that as well. The best most of us being forced on to higher fixes than we expected can hope for is that these Base rate hikes, level off and then drop back to a sustainable level within the next 24-36 months(?)...
Best of luck Dr P...
I'm certainly interested in house price changes. It's likely we'll be downsizing (maybe relocating) a couple of years from now and I'd hoped there would be enough cash released to (part) fund a small motorhome.
Mortgage free after downsizing a few years ago, happy with my 2 bed ex council house and 12 year old Skoda. Am definitely not feeling smug, seeing my daughter struggling to find anywhere affordable to rent, and the hoops she has to jump through just to be able to have the basic necessity of a roof over your head makes me sick. This country’s housing situation is absolutely disgusting, friends on the continent can’t comprehend our rental market, it’s been decades of failed policies that have got us here. I can only see a major shake up turning this around… although getting the self serving bunch of grifters we call a government out would be a good place to start
I have 2 years left on a 5 year fixed @1.7%.
Hoping to sell by then and get a place with my partner and 2 kids will be finishing Uni by then too so hopefully savings there that will offset the increase plus my mortgage isn’t that big.
Due to renew next year and not looking forward to it. House also needs some work doing and we’ll need to move to a three bed within the next three years as the kids are currently sharing a room. I think it’s more likes that me and Mrs F will end up setting up a bed in the living room. The jump in price from an affordable two bed to a three around here is just plain ridiculous.
When we offered on this house back in October 2021 I assumed we’d upsize in 10 years or so to get my daughters their own bedrooms. These days I’m thinking they’ll be sharing until they move out.
Divorced in 2019, original mortgage from 1997 wasnt paid off but I did have the money saved to pay it because the original amount was so small and I'd managed to save the difference. Remortgaged for 18 years on a tracker for two years at low rates so I could buy the ex wife out, then fixed at 1.22% for five years. Three and a half years to go and large overpayments will hopefully mean I have 3 to 4 years left when I exit the fixed rate, by then it won't be too large and I might pay it off with savings or take a loan. On the whole I've made right decisions every time I've needed to, be it fixing, variable or tracker. Now, when it comes to energy deals I'm next to useless!
My numbers are assuming the rate will be 6.5-7%, but there are still quite a few trackers available for 4.75, so hopefully, I can get something closer to 5.5% come March. I'm just going to stick it on a 3y tracker and see what state we're in come 2027. I'm 42 and have 20y left on the mortgage.
Paid it off about 4-5 months ago. Came off a fix, had some savings helped by a decent compo pay out after a bad accident. We were a bit nervous at committing what was a pretty big chunk of cash into the property, but I'm pleased we did. Fortunate to be in this position.
Certainly feel far from smug. I just about managed to hang on to my first property in the early 90s. Know a lot of people who handed their keys back, county court judgements etc. I got stuck in negative equity for a decade. It was a pretty miserable experience and I really pray we aren't going to see a repeat of those times.
C
For those with a few years of a fixed rate left, are you overpaying the mortgage (if circumstances allow), or specifically saving elsewhere with a view to paying a chunk off at the end of the fixed rate, as savings rates have improved?
Just wondering how others are using the time cushion, in case things don't come down fast. Not sure which approach looks the better bet, but doing neither seems a risk right now.
I had planned to overpay when our rate went up slightly last year (on a 5 year fix) however energy prices + general cost of living have largely put paid to that plan.
This country’s housing situation is absolutely disgusting, friends on the continent can’t comprehend our rental market, it’s been decades of failed policies that have got us here. I can only see a major shake up turning this around… although getting the self serving bunch of grifters we call a government out would be a good place to start
It's not much better in some of Europe, I have friends in Hamburg, Munich and Paris and they're all looking an now need €1m+ to get a dooer upper in a decent(ish) area and are currently spending €€€€ a month on rent. They're only saving grace is cheaper childcare, stable rent once in and cheap public transport/good infrastructure.
Our government seems to only focus on directly comparable numbers without looking at the bigger picture.
But not everyone is coming out of 2 year deals at the same time.
No, but given that a 2 year fixed is the most popular option, there is still a lag (mean value probably around 1 year) for interest rate hikes to have the desired affect.
Which probably means they go up too high before they start dampening the economy...
We have 2 amounts on our mortgage, the smaller loft conversion amount is happily fixed for another 4 years,but the main bit will come off the fixed rate in July next year.
We bought the house 8 years ago when we were both fairly junior at work and have had promotions and payrises since and resisted the temptation to buy a big expensive house in favour of doing this one up. I guess that risk mgmt will pay off in a year when we can still afford the increased payments.
Will continue to make overpayments in the mean time so when the actual payments go up we can drop the overpayment and it will feel the same from a monthly cash flow perspective.
You are right that not everyone is about to come off a 2 year fixed deal, but there will be a peak of numbers as 2 years back there was a big uptake due to the help / scheme the Govt. Introduced to help during COVID.
Personally ok - 4 years into a 10 year fix at low 2s. Overpaying and should be done well ahead of maturity.
Professionally concerned - work in finance for large SMEs / corporate borrowers and I think there will be a lot of pain here. Like in the resi mortgage market, many businesses have borrowed on variable rates having never seen anything other than near zero base rates. Banks will always stress test loans but doubtful that’s been sufficiently rigorous for the current environment given the other inflationary pressures. Already seeing clients cut back on investment and in some cases headcount, which will have ripple effects into the supply chain and wider economy. Challenging year / years ahead.
I really feel for those caught by the big interest rate hikes on top of energy price rises and the overall cost of living.
I keep banging the drum but the biggest factor in all this is a lack of afffordable social housing by all flavours of government, which has driven the private rented sector, increased housing benefit costs, and pushed prices to crazy levels.
That and a lack of financial education in schools which seems to have impacted both birrowers and lenders.
- used my mortgage to lend money to my sister
Is that technically legal?
Why not?
4 yrs left at just under 2%.
Over paying an extra 30% of monthly payment too.
Should be able to wipe out a reasonable amount of any remaining mortgage in 2027