Should I wait for Mortgage Rates to drop?

Veeee10

We have accepted an offer on our house to upsize to a larger house and have our mortgage agreed in principle (for a 5 yr fixed mortgage).


Now I hear that Mortgage Rates are likely to fall in the next few months.


We've been advised that we can easily re-sell our house for around the same amount (as it is an ideal first time buyers house and therefore sought after in our area).


So should we wait (6-12 months) for mortgage rates to come down? House prices may also possible drop in our area, meaning a proportionate saving for us...We could really do with any reduction in monthly payments.


We have seen a house we like and know they don't come up very often so this is a dilemma for us!


Thanks for any advice.

amnblog

Veeee10 wrote: »

Now I hear that Mortgage Rates are likely to fall in the next few months.

From where?

kingstreet

You have an agreement in principle for a mortgage amount. You have not reserved a rate unless your lender operates a booking system and you've paid any required fee.

At the moment, lenders are trying to hit their last quarter targets and many are using up FLS money and are cutting margin to achieve their objective.

I don't see rates getting any lower, TBH.

amnblog

kingstreet wrote: »

I don't see rates getting any lower, TBH.

I suspect the lender's IT systems might need to be completely re-coded if we go any lower!

somethingcorporate

If they go much lower banks will be paying us interest!

Make sure you have a decent product reserved before waiting for rates to drop further (just in case they don't!).

If they drop through the application process usually you can move on to a lower rate, depending on the lender.

Veeee10

It was an article on the online Telegraph Mortgage section (31st Oct but it won't let me post the link on here as I am a new user)


but I would image there are many articles like this, advising one thing or another and not particularly founded..


Thanks

JimmyTheWig

Veeee10 wrote: »

We have accepted an offer on our house
...
We have seen a house we like and know they don't come up very often

Rates might go down... or they might go up.
Prices might go down... or they might go up.

Waiting is a pretty big gamble to throw away an acceptable offer on your house and a chance of a house that you like.


Though if by

We could really do with any reduction in monthly payments.

you mean that you can't actually afford it then you might need to rethink your plans.

stator

Well the base rate isn't going any lower, so I'd like to know why they think banks will reduce their rates?
Personally in the last month I saw a few rates go up by 0.1%

I wouldn't bother waiting, just get on with it

Thrugelmir

Veeee10 wrote: »

We could really do with any reduction in monthly payments.

Then upsizing to a larger house is the last thing you should be considering. Instead your focus should be on repaying debt. Less debt owed equals less interest to pay.

Rising interest rates will have an inverse impact on house prices. Patience maybe a virtue given the current economic climate.

Veeee10

Thanks.


We would just be in the officially recommended 30% of household monthly gross income going on mortgage repayments.


..bit concerned for after the 5 years fixed rate though as we could be paying a lot more.


This is the first repayment mortgage we would have though as we've previously had an interest only (will be a bit of a jump in monthly outgoings for us), so please excuse my ignorance!

Thrugelmir

Veeee10 wrote: »

We would just be in the officially recommended 30% of household monthly income going on mortgage repayments.

And if rates hit 7% or 8% in 6 years time?

Don't confuse cthe availability of cheap money with the wider concerns expressed by the BOE in particular. There's an enormous complacancy with regards to interest rates. They are low for good reason.