Is it a good time to buy a house and fix the interest rate for as long as you can?

SpiderLegs

Crashy_Time said:

If you think rates are going to go up, and you therefore should fix, why not just wait for the inevitable price drops that will follow mortgage rate rises?

I know someone who has been waiting for mortgage rate rises for about twelve years now. They never shut up about them. They are also waiting for these inevitable price drops too.

they have paid thousands off their landlords mortgage in that time and as every day ticks by they get further and further away from breaking even. they will need prices to drop by at least 60% to be anywhere near.

One day though they will be ‘right’ and they will be very happy. However, being right will have cost them a fortune. Everybody else will of course be ‘wrong’ at that point, but will have so much equity in their own properties that they will neither notice nor care.

ccbrowning

RelievedSheff said:

We remortgaged 6 months ago and opted for the longer 5 year fixed rate. We have no plans to move and the difference in rate between the 2 year fix and the 5 year fix was negligible so for us it made more sense to opt for the longer fix.

A similar product with our lender (Halifax) is now a higher rate than the one we are currently on, so their rates at least do seem to be heading higher, which I can't say is a huge surprise. 

We are hoping that by the end of our 5 year fix in May 2026 that we will be under 50% LTV so will be eligible for the best rates available at the time. A bit of movement with house prices either way shouldn't really bother us either way.

We just missed that deal! Had the DIP and quotes and then the rates increased last week before we got an official offer. Still a good deal, though, and thinking the same as you. 

Snookie12cat

ccbrowning said:

RelievedSheff said:

We remortgaged 6 months ago and opted for the longer 5 year fixed rate. We have no plans to move and the difference in rate between the 2 year fix and the 5 year fix was negligible so for us it made more sense to opt for the longer fix.

A similar product with our lender (Halifax) is now a higher rate than the one we are currently on, so their rates at least do seem to be heading higher, which I can't say is a huge surprise. 

We are hoping that by the end of our 5 year fix in May 2026 that we will be under 50% LTV so will be eligible for the best rates available at the time. A bit of movement with house prices either way shouldn't really bother us either way.

We just missed that deal! Had the DIP and quotes and then the rates increased last week before we got an official offer. Still a good deal, though, and thinking the same as you. 

I missed a great deal by a week as my buyer pulled out and I couldnt apply A week last its  0.22% higher. I really wanted my sub 1 rate...

Crashy_Time

nicknameless said:

Crashy_Time said:

https://www.mortgagestrategy.co.uk/news/weekly-rate-watch-two-year-fix-climbs-4-basis-points/

Thanks for linking to the rate cuts for larger LTVs detailed in that piece.  Much appreciated.

Unfortunately it won`t be appreciated by a large number of would be buyers, as the SDH showed us.

Crashy_Time

SpiderLegs said:

Crashy_Time said:

If you think rates are going to go up, and you therefore should fix, why not just wait for the inevitable price drops that will follow mortgage rate rises?

I know someone who has been waiting for mortgage rate rises for about twelve years now. They never shut up about them. They are also waiting for these inevitable price drops too.

they have paid thousands off their landlords mortgage in that time and as every day ticks by they get further and further away from breaking even. they will need prices to drop by at least 60% to be anywhere near.

One day though they will be ‘right’ and they will be very happy. However, being right will have cost them a fortune. Everybody else will of course be ‘wrong’ at that point, but will have so much equity in their own properties that they will neither notice nor care.

I doubt recent buyers will have much equity left TBH, others might start to care when they try to sell their house?

RelievedSheff

Crashy_Time said:

SpiderLegs said:

Crashy_Time said:

If you think rates are going to go up, and you therefore should fix, why not just wait for the inevitable price drops that will follow mortgage rate rises?

I know someone who has been waiting for mortgage rate rises for about twelve years now. They never shut up about them. They are also waiting for these inevitable price drops too.

they have paid thousands off their landlords mortgage in that time and as every day ticks by they get further and further away from breaking even. they will need prices to drop by at least 60% to be anywhere near.

One day though they will be ‘right’ and they will be very happy. However, being right will have cost them a fortune. Everybody else will of course be ‘wrong’ at that point, but will have so much equity in their own properties that they will neither notice nor care.

I doubt recent buyers will have much equity left TBH, others might start to care when they try to sell their house?

How can you possibly tell how much equity someone has in their home by how recently they bought it?

SpiderLegs

Crashy_Time said:

SpiderLegs said:

Crashy_Time said:

If you think rates are going to go up, and you therefore should fix, why not just wait for the inevitable price drops that will follow mortgage rate rises?

I know someone who has been waiting for mortgage rate rises for about twelve years now. They never shut up about them. They are also waiting for these inevitable price drops too.

they have paid thousands off their landlords mortgage in that time and as every day ticks by they get further and further away from breaking even. they will need prices to drop by at least 60% to be anywhere near.

One day though they will be ‘right’ and they will be very happy. However, being right will have cost them a fortune. Everybody else will of course be ‘wrong’ at that point, but will have so much equity in their own properties that they will neither notice nor care.

I doubt recent buyers will have much equity left TBH, others might start to care when they try to sell their house?

Well one would hazard a guess that these poor unfortunates will simply not try to sell their house. Given that they’ve more than likely locked their mortgage rate in and have certainty of their payments for the foreseeable I’m sure they are more than content to just wait it out.

unlike my poor old mate in his grotty bedsit who has no equity at all, limited security, and has to live with his 1980s kitchen because his landlord thinks it’s perfectly fine.

rexmedorum

Crashy_Time said:

SpiderLegs said:

Crashy_Time said:

If you think rates are going to go up, and you therefore should fix, why not just wait for the inevitable price drops that will follow mortgage rate rises?

I know someone who has been waiting for mortgage rate rises for about twelve years now. They never shut up about them. They are also waiting for these inevitable price drops too.

they have paid thousands off their landlords mortgage in that time and as every day ticks by they get further and further away from breaking even. they will need prices to drop by at least 60% to be anywhere near.

One day though they will be ‘right’ and they will be very happy. However, being right will have cost them a fortune. Everybody else will of course be ‘wrong’ at that point, but will have so much equity in their own properties that they will neither notice nor care.

I doubt recent buyers will have much equity left TBH, others might start to care when they try to sell their house?

I would certainly expect a good chunk of equity after 12 years, unless you're doing something wrong!

Thrugelmir

rexmedorum said:

Crashy_Time said:

SpiderLegs said:

Crashy_Time said:

If you think rates are going to go up, and you therefore should fix, why not just wait for the inevitable price drops that will follow mortgage rate rises?

I know someone who has been waiting for mortgage rate rises for about twelve years now. They never shut up about them. They are also waiting for these inevitable price drops too.

they have paid thousands off their landlords mortgage in that time and as every day ticks by they get further and further away from breaking even. they will need prices to drop by at least 60% to be anywhere near.

One day though they will be ‘right’ and they will be very happy. However, being right will have cost them a fortune. Everybody else will of course be ‘wrong’ at that point, but will have so much equity in their own properties that they will neither notice nor care.

I doubt recent buyers will have much equity left TBH, others might start to care when they try to sell their house?

I would certainly expect a good chunk of equity after 12 years, unless you're doing something wrong!

On a 30 plus year mortgage term. Many people are surprised how little capital they've repaid after 12 years. Mortgages are backloaded to the last few years. 

RelievedSheff

Thrugelmir said:

rexmedorum said:

Crashy_Time said:

SpiderLegs said:

Crashy_Time said:

If you think rates are going to go up, and you therefore should fix, why not just wait for the inevitable price drops that will follow mortgage rate rises?

I know someone who has been waiting for mortgage rate rises for about twelve years now. They never shut up about them. They are also waiting for these inevitable price drops too.

they have paid thousands off their landlords mortgage in that time and as every day ticks by they get further and further away from breaking even. they will need prices to drop by at least 60% to be anywhere near.

One day though they will be ‘right’ and they will be very happy. However, being right will have cost them a fortune. Everybody else will of course be ‘wrong’ at that point, but will have so much equity in their own properties that they will neither notice nor care.

I doubt recent buyers will have much equity left TBH, others might start to care when they try to sell their house?

I would certainly expect a good chunk of equity after 12 years, unless you're doing something wrong!

On a 30 plus year mortgage term. Many people are surprised how little capital they've repaid after 12 years. Mortgages are backloaded to the last few years. 

How many people keep the same mortgage for 30 years? None I suspect. 

People tend to shop around and remortgage for better rates, often knocking years off their mortgage term as they do so.