A bit worried about rate rises.

Amanda_Cm

Everyone expects another 0.25% rise soon because of the inflation and rise of 1-2% by 2022.
I am starting to worry. I know we can afford the mortgage even if the rate rase but what if rases more than predicted?
Am I the only one who feels unsafe.
Btw we are waiting to exchange contract for our first property. A house with small annex we can rent in case something goes bad.

Mortgage_Adviser

You do realise that if the monthly mortgage payments increase because of the higher base rate, the landlords will pass the increase to the tenants, so tenants will be affected teh same way as home owners.
You either take a risk or live for free with your parents if you have such option.

Spangled

If rate rises worry you, you can get a fixed-rate mortgage for 5 years, 10 years or possibly even longer. You'll pay a premium to fix for longer but it would give you peace of mind.

PasturesNew

Rates have never been so low. They are this low for the first time ever/since the 1600s.

Historically mortgage rates have been closer to 5-8%. When I bought my house in 2000 the figure bandied about for "can you afford this" was to check how much it'd cost you at 8-12% interest rates.

I'd suggest that if you can afford, as your first property, something that has an annexe on it that you're not short of a bob or two and squeaking at the sides for pennies ....and that your fears are unfounded.

Just buy the house you've chosen. You have to live somewhere. Rates WILL rise, because that's how the world works - but, as an owner occupier, you are in control of where you live just by paying the mortgage each month ... which, in 10 years' time, will look laughably tiny.

Don't worry what will happen in the future. You've chosen a sensible house with wriggle-room. Just do it and get on with living life in the house you chose, that nobody can turf you out of on a whim ....

Glover1862

PasturesNew wrote: »

Rates have never been so low. They are this low for the first time ever/since the 1600s.

Historically mortgage rates have been closer to 5-8%. When I bought my house in 2000 the figure bandied about for "can you afford this" was to check how much it'd cost you at 8-12% interest rates.

I'd suggest that if you can afford, as your first property, something that has an annexe on it that you're not short of a bob or two and squeaking at the sides for pennies ....and that your fears are unfounded.

Just buy the house you've chosen. You have to live somewhere. Rates WILL rise, because that's how the world works - but, as an owner occupier, you are in control of where you live just by paying the mortgage each month ... which, in 10 years' time, will look laughably tiny.

Don't worry what will happen in the future. You've chosen a sensible house with wriggle-room. Just do it and get on with living life in the house you chose, that nobody can turf you out of on a whim ....

Japan has had ultra low rates for best part of 30 years, we are a third of the way there already.

This gives another perspective

https://www.standard.co.uk/news/politics/interest-rate-rise-less-likely-after-growth-downgrade-gives-philip-hammond-a-headache-a3773286.html

brit1234

Mortgage_Adviser wrote: »

You do realise that if the monthly mortgage payments increase because of the higher base rate, the landlords will pass the increase to the tenants, so tenants will be affected teh same way as home owners.
You either take a risk or live for free with your parents if you have such option.

Landlords didn't pass on the big interest rate cuts a few years ago. Also many landlords charge the maximum they can get away with already, rising the rents will simply mean more void periods for landlords.

owen_money

Ah 15% interest rates of the early 90's, you kids dont know how easy you got it these days (except for the fact you need to save thousands for a deposit -in the 90's they almost paid you to get your own house )

Seriously, I'm also worried, if it goes up .25 percent my mortgage will go up £23 per month

FIRSTTIMER

I agree with the previous posts - rates will eventually rise back to 0.5 then further up - I got on the property ladder last year and my house value has already gone up by 5k. I am happy I took the plunge but will more than likely fix with a 5yr deal when I renew at the end of this year.....

Edi81

Rates are already back st 0.5% !

Thrugelmir

Amanda_Cm wrote: »

I am starting to worry. I know we can afford the mortgage even if the rate rase but what if rases more than predicted?

Opt for a fixed rate product and overpay. Little point in worrying about events outside of your control. Focus on things you can control.

Lenders affordability criteria ensures that you'll manage fine in the medium term. Days of overborrowing on mortgages are well past.

ACG

If you have concerns about interest rates while they are artificially low, then you should be considering a longer term fixed rate. IT will cost you more in the short term, but in the longer term it will mean you are not worried about rate rises.