5 or 2 year fixed rate?

SpiderLegs

Hedgepigs said:

Crashy_Time said:

Lib Dems getting involved now.....

https://www.independent.co.uk/money/mortgage-interest-rates-rise-fix-variable-cheap-remortgage-b1949708.html

I don't understand those figures? Saying mortgage interest rates might hit 14+% then saying the increase would be about £600 A YEAR more on a £250k house? Without doing the sums, are they meaning intrest rates might rise BY 14% rather than TO 14%? Or is the year meant to be month?

My landlord wants to put my rent up by more than £600 a year on a house worth about £125k for no other reason than he feels like it. So that article reads like a lot of fuss over peanuts.

It might be the 'worst' time to buy, but think I'll carry on trying to climb on the property ladder thanks, because I can't see how it will end up worse than renting.

They are not saying Mortgage interest rates will hit 14%

They are saying the cost will increase by 14% in two years or so.
so a mortgage payment of 500 will become 570.

You’ve been suckered in by a sensationalist headline I’m afraid.

Let’s break it down a bit.
someone with a 250k mortgage may end up paying 600 extra a year.
so that would require a household income of about 60k in order to get that mortgage.

Fifty quid a month extra for a household bringing in 3500-4000 a month.

my god how will they cope!!!!!!

Sunsaru

SpiderLegs said:

Hedgepigs said:

Crashy_Time said:

Lib Dems getting involved now.....

https://www.independent.co.uk/money/mortgage-interest-rates-rise-fix-variable-cheap-remortgage-b1949708.html

I don't understand those figures? Saying mortgage interest rates might hit 14+% then saying the increase would be about £600 A YEAR more on a £250k house? Without doing the sums, are they meaning intrest rates might rise BY 14% rather than TO 14%? Or is the year meant to be month?

My landlord wants to put my rent up by more than £600 a year on a house worth about £125k for no other reason than he feels like it. So that article reads like a lot of fuss over peanuts.

It might be the 'worst' time to buy, but think I'll carry on trying to climb on the property ladder thanks, because I can't see how it will end up worse than renting.

They are not saying Mortgage interest rates will hit 14%

They are saying the cost will increase by 14% in two years or so.
so a mortgage payment of 500 will become 570.

You’ve been suckered in by a sensationalist headline I’m afraid.

Let’s break it down a bit.
someone with a 250k mortgage may end up paying 600 extra a year.
so that would require a household income of about 60k in order to get that mortgage.

Fifty quid a month extra for a household bringing in 3500-4000 a month.

my god how will they cope!!!!!!

They will cope by selling their house, going into a 'cheap' rental and then wait years for the prices to crash....

No, wait....

SpiderLegs

Sunsaru said:

SpiderLegs said:

Hedgepigs said:

Crashy_Time said:

Lib Dems getting involved now.....

https://www.independent.co.uk/money/mortgage-interest-rates-rise-fix-variable-cheap-remortgage-b1949708.html

I don't understand those figures? Saying mortgage interest rates might hit 14+% then saying the increase would be about £600 A YEAR more on a £250k house? Without doing the sums, are they meaning intrest rates might rise BY 14% rather than TO 14%? Or is the year meant to be month?

My landlord wants to put my rent up by more than £600 a year on a house worth about £125k for no other reason than he feels like it. So that article reads like a lot of fuss over peanuts.

It might be the 'worst' time to buy, but think I'll carry on trying to climb on the property ladder thanks, because I can't see how it will end up worse than renting.

They are not saying Mortgage interest rates will hit 14%

They are saying the cost will increase by 14% in two years or so.
so a mortgage payment of 500 will become 570.

You’ve been suckered in by a sensationalist headline I’m afraid.

Let’s break it down a bit.
someone with a 250k mortgage may end up paying 600 extra a year.
so that would require a household income of about 60k in order to get that mortgage.

Fifty quid a month extra for a household bringing in 3500-4000 a month.

my god how will they cope!!!!!!

They will cope by selling their house, going into a 'cheap' rental and then wait years for the prices to crash....

No, wait....

Surely no-one would do something so ridiculous.
🤦‍♀️

getmore4less

Hedgepigs said:

Crashy_Time said:

Lib Dems getting involved now.....

https://www.independent.co.uk/money/mortgage-interest-rates-rise-fix-variable-cheap-remortgage-b1949708.html

I don't understand those figures? Saying mortgage interest rates might hit 14+% then saying the increase would be about £600 A YEAR more on a £250k house? Without doing the sums, are they meaning interest rates might rise BY 14% rather than TO 14%? Or is the year meant to be month?

My landlord wants to put my rent up by more than £600 a year on a house worth about £125k for no other reason than he feels like it. So that article reads like a lot of fuss over peanuts.

It might be the 'worst' time to buy, but think I'll carry on trying to climb on the property ladder thanks, because I can't see how it will end up worse than renting.

I think someone did not do the sums.

let take that £250k over 25y repayment and interest only with  a generous 2%(plenty under that)

rate	fees	payment	add fees	interest only	IO +F
2.00%	£0.00	£1,059.64	£1,059.64	£416.67	£416.67
14.00%	£0.00	£3,009.40	£3,009.40	£2,916.67	£2,916.67
16.00%	£0.00	£3,397.22	£3,397.22	£3,333.33	£3,333.33

that's £2k- £3k a month difference


£600py or £50pm  would be 
0.41% rise from 2%.

rate	fees	payment
2.00%	£0.00	£1,059.64
2.41%	£0.00	£1,110.24

0.44 rise for those the bottom ~1%.

rate	fees	payment
1.00%	£0.00	£942.18
1.44%	£0.00	£992.81

a 2.5% rise from 1% would be ~£310pm

rate	fees	payment
1.00%	£0.00	£942.18
3.50%	£0.00	£1,251.56

  

Hedgepigs

SpiderLegs said:

Hedgepigs said:

Crashy_Time said:

Lib Dems getting involved now.....

https://www.independent.co.uk/money/mortgage-interest-rates-rise-fix-variable-cheap-remortgage-b1949708.html

I don't understand those figures? Saying mortgage interest rates might hit 14+% then saying the increase would be about £600 A YEAR more on a £250k house? Without doing the sums, are they meaning intrest rates might rise BY 14% rather than TO 14%? Or is the year meant to be month?

My landlord wants to put my rent up by more than £600 a year on a house worth about £125k for no other reason than he feels like it. So that article reads like a lot of fuss over peanuts.

It might be the 'worst' time to buy, but think I'll carry on trying to climb on the property ladder thanks, because I can't see how it will end up worse than renting.

They are not saying Mortgage interest rates will hit 14%

They are saying the cost will increase by 14% in two years or so.
so a mortgage payment of 500 will become 570.

You’ve been suckered in by a sensationalist headline I’m afraid.

Let’s break it down a bit.
someone with a 250k mortgage may end up paying 600 extra a year.
so that would require a household income of about 60k in order to get that mortgage.

Fifty quid a month extra for a household bringing in 3500-4000 a month.

my god how will they cope!!!!!!

The article said "...expects the interest rate on UK mortgages to hit 14.8 per cent by the second quarter of 2023."

Which read to me like they expected the average interest rate on mortgages to be 14.8%. Which sounds ridiculous on a number of accounts. To increase BY 14.8% (so an interest rate of 1% becomes 1.148% ) makes a lot more sense and is nothing in the grand scheme of things, since rates are low to start with. I thought the article must have been poorly worded as it didn't add up!

Sunsaru

It's only after I read this that it made it clear to me...

https://www.mortgagesolutions.co.uk/news/2021/10/28/obr-warns-mortgage-costs-to-rise-13-per-cent-by-2023/

"The OBR’s forecast shows that following a fall in interest costs for most of this year they will begin to gradually rise in the first half of 2022 before speeding up in quarter three, rising 7.4 per cent before hitting 11.4 per cent by the end of the year. An average rise of five per cent in mortgage costs is anticipated for the year.

By quarter two of 2023, the OBR predicts mortgage cost rises will peak at 14.8 per cent before beginning to fall to 10 per cent in Q4."

So yea, they are forecasting that it will go up 'by' not to... Most sensible people would have factored these extra costs in anyway. Those who haven't may have to tighten their belts a little.

Getting_greyer

14% not 14 percentage points. 

jimbog

MandyMcG said:

Crashy_Time said:

Lib Dems getting involved now.....

https://www.independent.co.uk/money/mortgage-interest-rates-rise-fix-variable-cheap-remortgage-b1949708.html

The LibDems are on the case? Phew, we are all saved now!

^^post of the day!

Crashy_Time

What fix did you decide on OP?

Crashy_Time

getmore4less said:

MobileSaver said:

Crashy_Time said:

MobileSaver said:

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?

You agree though that walking a way from a tenancy is much much easier than walking away from a large mortgage debt? That was the point being made.

Well, yes, often but not always, walking away from a tenancy will be easier than walking away from a mortgage.

You would hope there was at least one upside to paying off your landlord's mortgage instead of your own for years on end!

Most smart  people that are walking away from a tenancy are BUYING somewhere.

That doesn`t always work out so well though, just "buying" anything isn`t the way to create financial stability as many have found out....this might be an extreme example, or maybe not?

https://www.thetimes.co.uk/article/cladding-scandal-i-paid-180-000-for-my-flat-then-got-a-101-000-bill-to-fix-it-kv5ts8ml5

Buying flats now is certainly a minefield and needs to be treated with caution IMO, at least when you rent the landlord picks up the tab.