5 or 2 year fixed rate?

MobileSaver

Crashy_Time said:

 if prices drop due to rate rises people could be in negative equity?

Typical HPC scaremongering by focusing on a worst case scenario.

Firstly, official forecasts predict that house prices will rise every year for at least the next five years.

Secondly, even if prices did drop, the number of people who would end up in negative equity in five years time would most likely be all but zero.

sheramber

Negative equity only matters if you want to sell.

 

getmore4less

sheramber said:

Negative equity only matters if you want to sell.

 

It can also impact mortgage choices renewal time.

very few lenders if any  offer new business  at 100%+ LTV.(some have specialist 100% products)

your existing lender may not have a fix option over 95%, stuck with SVR
Some do over 100% but may have an upper limit  

Crashy_Time

Hedgepigs said:

Crashy_Time said:

https://www.express.co.uk/finance/personalfinance/1515417/mortgages-mortgage-rates-base-rates-Bank-of-England-interest-rates-inflation-property

Is it actually good advice to fix now though, because if prices drop due to rate rises people could be in negative equity?

And? If you think prices might drop surely you might as well be in negative equity paying it off at a lower interest rate? Surely less risk than a 2 year and being stuck paying a even higher variable rate if you can't then remortgage? And if prices did drop chances are you'd be out of negative equity again after 5 years anyway.

I was referring to people who have not yet purchased their property.

Crashy_Time

Looks like the market isn`t really following the BOE anyway?

https://www.ft.com/content/42299ac9-cb5b-47cb-8d9e-016f3c7c5c7b

Getting_greyer

Don't worry mate, they'll be down again next within a fortnight.

jimbog

Any increase in interest rates will sting some, but more and more posts on here from tenants complaining about continual rises in rents really causing real angst. No one is immune 

Crashy_Time

jimbog said:

Any increase in interest rates will sting some, but more and more posts on here from tenants complaining about continual rises in rents really causing real angst. No one is immune 

I think I have seen one thread on that...? It is much easier to leave a tenancy though than it is to leave a large mortgage debt, that`s for sure.

Crashy_Time

For example the Clapham thread, the last person in to that kind of shocking lack of value will be badly hurt if mortgage rates rise, and unlike the renter probably stuck for a long time.

MobileSaver

Crashy_Time said:

For example the Clapham thread, the last person in to that kind of shocking lack of value will be badly hurt if mortgage rates rise, and unlike the renter probably stuck for a long time.

Oh the irony! How many years have you been stuck renting while you wait for houses to become "better value" in your eyes?

It must be at least 15 or 16 years now or is it even longer?