Should I wait for Mortgage Rates to drop?

getmore4less

Work out your own affordability %of income are nonsense.

Do a proper budget to work out what you are comfortable with.

Any rate changes down will be tiny so the change in payments will be tiny.

Put your numbers in a calculator and see what happens to the payment for various rates.

shortchanged_2

Veeee10 wrote: »

We could really do with any reduction in monthly payments.


Thanks for any advice.

I'm with Thrugelmir on this one. If you are that concerned about getting your monthly payment down as low as possible at this stage would you be able to afford an interest rate rise?

To have a mortgage 30% of your income when rates are rock bottom is not a good thing in my eyes.

This one definitely has the potential to end in tears.

Veeee10

Thanks. Sounds like we should let the dream house go and look for something a bit more modest.

Mr friend told me that if interest rates went up at the end of the 5 year fixed rate deal (which they doubtless will) and it got too expensive then we can always just remortgage but it doesn't sound that easy.

R_P_W

Veeee10 wrote: »

Thanks. Sounds like we should let the dream house go and look for something a bit more modest.

Mr friend told me that if interest rates went up at the end of the 5 year fixed rate deal (which they doubtless will) and it got too expensive then we can always just remortgage but it doesn't sound that easy.

When rates go up, every bodies rates will go up!

Thrugelmir

Veeee10 wrote: »

Mr friend told me that if interest rates went up at the end of the 5 year fixed rate deal (which they doubtless will) and it got too expensive then we can always just remortgage but it doesn't sound that easy.

Fine if you are a person who is happy to accept the risks involved and the downside. If you are unable to remortgage what's plan B?

gazfocus

The problem with the plan of remortgaging down the line is that if your lender increases their rates, chances are, everyone else will have done that too, so while you might save <0.5% by remortgaging, it's hardly going to make a big difference.

Then there's the possibility that you won't be able to remortgage and you will be stuck with deals offered by your current lender. What happens then?

I'm all for getting your dream home if it's affordable but as others have said, you need to do a real budget.

For us, my wife is currently not working and our mortgage is 40% of my income. We can just about manage but it's not ideal and if rates went up significantly, we'd be screwed.