A uncertain week ahead - (rate increase)

dfarry

Early next week, I should be exchanging on the house we are buying.... we had to fight hard for this house - the price is high and we had to bid against another buyer, in the end our offer was accepted at £4K below the asking price which was always very optimistic I felt.

Likewise we got the full asking price on our house, again it is over priced for what it is but then it is still much much lower in price than the new place we are getting...so any potential drop in price due to the intrest rate increase is likely to be less...I must admit I was shocked when I heard about the rate rise especially as we are due to exchange next week.

We have not overstretched ourselves I feel but the rate increase is still going to hit us quite hard - I must admit it sows a seed of caution in my mind especially with exchange so close. We will live in the new house for many years, but at the same time I wonder if we could have got something better or cheaper in the new rate increasing house market.....but then we would likely have to sell our current home for less so we would only gain through lower stamp duty.

The other thing is the other people in my chain.... how will they react to the rate increase, have they overstretched themselves... whats to say, they might feel like me... worse still they may decide to cut their losses and run, or negotiate down the purchase price....

hmmm I feel like it is going to be an uncertain week for us.

dfarry

Sorry for the "LUMP" of text... it's the browser settings on this machine that I can't seem to change

danrees

Don't worry about it.

Read any financial newspaper such as the FT and you will see that the markets expect the base rate to rise by 1% within the next few years.

If there is a panic within the housing market it will happen over the short-term and as you say, the only effect on your transaction of a small market downturn would be a neglible impact on stamp duty.

As long as you can afford higher interest rates then there is nothing for you to worry about going forward that you wouldn't have been aware of before the rate increase... and if you can't afford a .25% increase then you really have stretched yourself!!!

hethmar

Dont Panic!! Try to take it easy, I doubt very much that a .25% hike will shatter your chain. More than likely everyone has opted for a fix rate anyway.

Calm down, enjoy the new house - its for nesting, not investing - you liked it enough to buy it, you will be happy with it.

Good luck

dfarry

My broker has confirmed that my mortgage on my new tracker mortgage will increase by £20.

We will feel the increase, really just because everything else seems to be increasing in price....oh except my motorbike insurance (moving out of London I am due a £122 refund on that)

I feel a little uneasy just because... new mortgage/house, new pension payments/more council tax etc... but from the budgetting we have done a 3-4% increase in rates would be manageable - 5% and we would start to struggle then.

I was always expecting the rise and we need to move for "nesting" purposes...swings and roundabouts but I wish this had of happened about 6 weeks ago when I might have had a better bargaining position.