Bank of England Interest rate increase Aug 18?

[peterb]

So, my phone packed in yesterday. Thought I'd further all you lucky house-owners high-horse-man-ship and show you this.

Great notch!

(Pity about the date though)

[badass]

yeah you did, you little monkey...


can't have your cake and eat it ...wel you can..but you might need to stop moaning about having a bad stomach ache

I've got a house..............
And I drive a piece of junk 12 year old Golf.

That's the thing about these company cars. The car rich get richer and the car poor get poorer.
In fact the car rich seem to be the phone rich now as well!

[Dashers]

So FWIW, I've just applied for 2.49% fixed for ten years with no repayment restrictions after five. With a bit of fair wind and some luck, this should do me for the remainder of this mortgage (assuming I don't move).

I'm gambling on interest rates going up by a percent relatively quickly. If in five years they haven't, I will have lost out.

Rise to 0.75% confirmed.

Typical that rates would rise just after I get my first mortgage. Luckily I didn't stretch myself at all, so even a rise of 2% wouldn't be an issue for me. Still annoying for people like me who missed out on house price increases while paying high rents and paying back student loans.

Don't get too annoyed by it. It's ups and downs. I missed the early 2000s property price boom and brought fairly high up. I landed up with a pretty naff property that needed a lot of work - but flash forward now, I've got a pretty nice home and interest rates are low so mortgage repayments are low. There will always be ups and downs, and in twenty years new home buyers will be envious of something favourable that happened to you - which you'll probably hardly notice!

[Saracen]

So FWIW, I've just applied for 2.49% fixed for ten years with no repayment restrictions after five. With a bit of fair wind and some luck, this should do me for the remainder of this mortgage (assuming I don't move).

I'm gambling on interest rates going up by a percent relatively quickly. If in five years they haven't, I will have lost out.



....

Lost out? Not necessarily. It depends on your definition.

For sure, it might have cost you a bit more than you could, with the benefit of 20:20 hindsight, have achieved .... but it could have cost you less.

But either way you have the benefit of security in knowing the worst-case, which is your "fixed" rste.

A little story. Ages ago (say, 50+ -ish years) my parents bought a house (for approx £4300, nice 3-bed semi, Hertfordshire on tnd London border .- now more like £750k, but that's not my point). They had a 25-yearr fixed mortgage ... and yes, they used to exist .... at 4.25%.

Several neighbours all opted for 3.9% variable, and couldn't understand why M&D opted to pzy more. Well, a few years later when that 3.9% was varying around the 8-9% mark, they worked out why.

I remember Dad's comment. At 4.25% they knew, from the start, what the costs would be, and that they could afford it. The peace of mind was worth the prrmium rate, even if the variable rate stayed low. And if it didn't ....


Current BofE opinion is that rates will rise slowly but steadily over the next few years, stabilising at a new 'normal' of 2-3%. That makes your 2.5% look a tad high BUT .... they could be wrong. We have increasing globalisation, potential Trumpian trade wars and, oh yeah, Brexit uncertainty, all in our near future. It's certainly conceivable that 2-3% could be wrong, and either it stays lower than that, or peaks much higher.

Either way, you know what you're committed to.

Looks to me like a smart move.

[TheAnimus]

Yeah I've been "losing out" because I fixed at 1.89% however I've still got almost 3 more years at that rate.

However, given current projections are showing around 3% borrow costs by then, in all honesty I doubt I'll notice the change.

[Zak33]

So FWIW, I've just applied for 2.49% fixed for ten years with no repayment restrictions after five. With a bit of fair wind and some luck, this should do me for the remainder of this mortgage (assuming I don't move).

I'm gambling on interest rates going up by a percent relatively quickly. If in five years they haven't, I will have lost out.



Don't get too annoyed by it. It's ups and downs. I missed the early 2000s property price boom and brought fairly high up. I landed up with a pretty naff property that needed a lot of work - but flash forward now, I've got a pretty nice home and interest rates are low so mortgage repayments are low. There will always be ups and downs, and in twenty years new home buyers will be envious of something favourable that happened to you - which you'll probably hardly notice!

this works IF you don't move

the mortgage company COUNTS on your moving and needing to repay early and therefore pay the fine.

Play their fiddle to your on tune and you win

[TheAnimus]

this works IF you don't move

the mortgage company COUNTS on your moving and needing to repay early and therefore pay the fine.

Play their fiddle to your on tune and you win

I found a clause in my contract that would let me side step that. This was about 10 years back mind.

Basically it was allowed if either person moved out, as it was against two names, might be worth checking if they are two of you. The other was if we both moved out but started renting it out, they would immediately move us to the commercial mortgage at only double the interest rate! Woo, however it had no penalty clause to break.

[Dashers]

A 2-3% normal base rate still needs mortgage lenders putting their profit on top. We've been looking at about a 1.25% mark up minimum on the base rate. So a 2% base rate would be a > 3% mortgage, making a 2.5% quids in. Well that's my reasoning anyway.

With regards to moving property, it's only an issue if you're downsizing etc. You can port your mortgage to a new property. If you need additional money then that's fine, you get a second mortgage to cover the difference. It has to be with the same lender normally due to who owns the equity and has first rights on defaulting etc. I think this particular mortgage would let you down size it during a move too without penalty, which is nice, but not something I'm expecting to do in the next five years, fifty maybe.

[Saracen]

Rise to 0.75% confirmed.

Typical that rates would rise just after I get my first mortgage. Luckily I didn't stretch myself at all, so even a rise of 2% wouldn't be an issue for me. Still annoying for people like me who missed out on house price increases while paying high rents and paying back student loans.

If you want to worry, don't worry about this rate rise .... worry about house prices crashing.

I'm NOT predicting it, but it does happen.

I bought a house in '87 for about £63k, at around 7%. 18 months later it was £120k. Great, thinks I.

2 years after that, interest was 15% ( actually peaked briefly at 17%) , my repayments had more or less doubled and market value had dropped to £70k .... which thankfully was still up on what I'd paid.

But a mate bought about 18 months after I did, only to find repayments hit a level he simply couldn't afford, and his property promptly halved to about half what he paid.


This is why I always advise that property ownership as speculation is a dangerous game, and fortunes can be made but also lost.

And yes, I know you're not speculating. You're buying a home. That's why this rate rise doesn't really matter, in the scheme of things. House ownership always means tsking the rough with the smooth, but ignore the bumps, hunker down and keep your eyes kn the prize .... which in what now seems like the djm and distant future is a monthly budget involving neither rent nor mortgage payments. It'll come sooner thzn you think, especially if you focus on (mortgage deal permitting) ovdrpaying every month. And believe me it's a nice feeling when it does.