Where are mortgage rates going?

michaels

Purely personal relevance, do people think market leading 5 year fixed rate mortgages will be higher in 2 years time and if so by how much?

I have an ERC if I want to remortgage now but it might be worth paying if rates are 1% higher in 2 years time.....

mwpt

Early redemption clause? When does your current fix end? Surely if you have an ERC you'd just watch the market and make a move at the first sign of a rise?

Also, the poll doesn't have an option for "lower than now".

Before Trump got elected, I would have said my bet is for same as now withing a margin of 0.5%. So basically down to 1.3% up to 2.3% (if we're basing it on your figure of 1.8%). Governments and central banks don't know any other way at this point and it was always going to take some unusual event or the market finally asserting itself to kind things up a bit. But Trump... I have no idea what his policies will be.

Thrugelmir

Less than 1% higher - up to 2.85%

Another US rate rise (albeit small) next month will set the tone going forward.

Lenders have to utilise any remaining funds under the Mortgage Funding for Lending Scheme now. Repayments to the BOE start towards the backend of 2018. So lenders access to cheap money will be gone.

GreatApe

I've heard of what goes up must come down but I haven't heard of what goes down must come up

Real rates will be negative for prime borrowers for all of our lifetimes imo

michaels

How long is a piece of string?

GreatApe wrote: »

I've heard of what goes up must come down but I haven't heard of what goes down must come up

Real rates will be negative for prime borrowers for all of our lifetimes imo

US rates are climbing, I wonder where they will top out - we know the uk economy is probably extremely interest rate sensitive but is the US so bad?

I think the gbp devaluation inflation can probably be ignored by the boe as a one off but the new govt I suspect may be more old fashioned about 'sound money' and normal interest rates

Thrugelmir

Less than 1% higher - up to 2.85%

michaels wrote: »

US rates are climbing, I wonder where they will top out

Take a long time to normalise. The effect will be to raise borrowing rates elsewhere around the globe. Irrespective of what Central Banks do locally.

michaels

How long is a piece of string?

Thrugelmir wrote: »

Take a long time to normalise. The effect will be to raise borrowing rates elsewhere around the globe. Irrespective of what Central Banks do locally.

What is the mechanism for that?

wotsthat

How long is a piece of string?

I'm looking at October/ November 2018 too for fixes ending.

Starting to think about paying them off. A couple of years ago the mortgage rate was easy to beat but it's starting to take more headspace than I'm willing to allocate.

I'm with the how long is a piece of string answer and will let them run until the end and see what's about at the time. If rates are very low I'll let them run but, if not, I'll change focus and prioritise overpayments.

Thrugelmir

Less than 1% higher - up to 2.85%

michaels wrote: »

What is the mechanism for that?

The rate that investors will demand for their money. Trumps win immediately sparked a reaction in Government debt yields across Europe.

padington

Less than 1% higher - up to 2.85%

The markets offering 2.48% on a ten year fix.

That says it all. Interest rates one day might get to 2.5% but don't expect much more than that any time soon.

https://www.uswitch.com/mortgages/remortgaging/?mortgage_search%5Brepayment_method%5D=capital_repayment&mortgage_search%5Bmortgage_type%5D=fixed&mortgage_search%5Binitial_period%5D=120&ref=guide~15704

gfplux

More than 1% higher - 2.85%+

Purely anecdotal. I was told this story today.
Luxembourg. Meeting three weeks ago (before Trump election) mortgage discussed in a general way. 2nd meeting this week getting down to specific details. Bank manager "the rates (we are offering) have risen since the American election"