Mortgage deal ending

Kompany Car said:
Only two things will cause interest rates to fall in the next year.

1. Inflation drops to nearer the target value of 2.5%.

2. The country enters a recession and cheap money is needed to stimulate the economy.
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What’s your prediction for interest rates say .. August this year and March next year
 
BlueHammer85 said:
Phew.


Mortgage lenders and Chancellor Jeremy Hunt have agreed that people should be given a 12-month break before repossession proceedings start amid soaring interest rates.

After the rise of the base rate to 5%, Mr Hunt met with leaders of financial institutions including Lloyds, NatWest, Barclays and Virgin Money.


They agreed that the repossession break should be introduced.
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Also allowing interest only for 6m which is a no brainer if you are struggling financially.
 
BlueHammer85 said:
What’s your prediction for interest rates say .. August this year and March next year
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According to the FT the money markets are predicting 6% by the end of the year and maintained at that level until June 2024. To me that sounds like a bit too much and an over correction.

The impact on consumer spending lags changes in interest rates by up to 6 months. So if they do it until June 2024. I can see the interest rate falling quite rapidly after that to stop the economy stalling, but as I said before the new normal will be 3-4% for the following few years.

The forecasts in the FT are a softer fall to that new normal as shown below.

IMG_2371.jpeg
 
My sympathies go out to all who are struggling in the present situation. At present I would be risking staying on the variable rate as rates do appear to be coming to the top of the cycle. Tying into a fix almost certainly guarantees a high(ish) rate for at least 2 years. I wonder though, how many people over the last few years of cheap money, have not upped their mortgage for the new consumer things that most of us love, but at the same time risking the roof over their heads as rates rise.
 
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MCFC Wirral said:
I have two properties. A one off subscription to Netflix so I can watch a film and anything else that takes my fancy isn’t going to break the bank.
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The operative sentence was the first one.
The operative words were “have” and “two.”
The issue is those people for whom the operative words are “have not” and “one.”

There used to be a mindset that said “I will forgo A today so that I might have B tomorrow. Once I get A, I should also be able to have B the day after.

“Delayed gratification” appears to be a four letter word today, in the era of fake nails, fake tan, trout pout lips, tattooed eyebrows, a gym membership, Fri-Sun on the lash and fancy motors…for people who really have zero long term assets or a current pot to piss in once they’ve paid off everything they’ve bought on credit!

It makes no sense, but “Hey Ho, FOMO is real and I ain’t missing out on anyfink!”
 
Once the volatility settles down mortgage rates can still come down without the base rate moving.

Seems to be a trend of paying a much higher product fee for a better rate.

Some buy to let mortgages have 3% product fees!
 
BlueHammer85 said:
So if first time buyers … don’t buy … because of interest rates

Then interest rates would be forced to drop?
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No house prices would just drop to they become affordable or wage inflation catches up and puts them on a more affordable mulitplier (wages to house price ratio)
 
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