How is everyone's situation regarding interest rates?

fleetingmind

london21 said:

fleetingmind said:

london21 said:

The recent  rate increases has come as a shock to many. 

The ERC can be a lot but all depends on the savings. 

Rates from the banks already 3%+ with tomorrow's increase will soon be 4-5%.

Difficult to cut costs with the increase in cost of everything from energy, food, petrol, mortgage etc. 

Increase pay will likely have to be the option for a lot of people and reliance on savings. 

Depending on how high people think the rate wil go in the next few years wil make remortgaging early a must. Shame I'm rubbish at the calculations if it is worth it or not. 

True, what makes it difficult is the fact that no one knows how high it will go for certain.

Also if less than a year the ERC is like 1% but if more than a year and large loan amount, it increases.

My rate expires in just over a year 31/08/2023 so will be higher ERC for a few more weeks but can I afford to wait?!

An agreed rate is usually valid for 6 months so could you agree on principal now, wait close to the 6 months then see how things look. Would save 6 months monthly increase, lower ERC if more than a year, see how much more the rate has increased and know a bit more how long it's going to last. 

london21

fleetingmind said:

london21 said:

fleetingmind said:

london21 said:

The recent  rate increases has come as a shock to many. 

The ERC can be a lot but all depends on the savings. 

Rates from the banks already 3%+ with tomorrow's increase will soon be 4-5%.

Difficult to cut costs with the increase in cost of everything from energy, food, petrol, mortgage etc. 

Increase pay will likely have to be the option for a lot of people and reliance on savings. 

Depending on how high people think the rate wil go in the next few years wil make remortgaging early a must. Shame I'm rubbish at the calculations if it is worth it or not. 

True, what makes it difficult is the fact that no one knows how high it will go for certain.

Also if less than a year the ERC is like 1% but if more than a year and large loan amount, it increases.

My rate expires in just over a year 31/08/2023 so will be higher ERC for a few more weeks but can I afford to wait?!

An agreed rate is usually valid for 6 months so could you agree on principal now, wait close to the 6 months then see how things look. Would save 6 months monthly increase, lower ERC if more than a year, see how much more the rate has increased and know a bit more how long it's going to last. 

I thought of that but if staying with the same lender they let you move a bit earlier to a new rate. Some 3 months, some 6 months etc.

If moving elsewhere then they do not let you leave early.

If staying with the same lender won't allow a new rate switch until the period you can switch without a fee or pay the ERC. 

RelievedSheff

We are currently just over a year into a 5 year fixed rate at 2.3%. Our fixed rate expires at the end of May 31st 2026.

We are hoping that by then interest rates will have settled down somewhat and the economic outlook might be a bit clearer.

Our current rate is by far the cheapest we have been on in 16 years of having mortgages. Our previous rates have all been around 5% so the current rising interest rates are of no great surprise too us.

We will only have 10 years left on our term by the time this fixed rate is finished. We really dont want to extend that and we had hoped to fix for the remaining 10 years so that we know what our payments are for the rest of the mortgage. Depending what rates are and what the trend is at that point will determine what route we take.

Linton

What situation regarding interest rates?  3% fixed for life on my retirement mortgage.

yessuz

My 2 year fix with Santander was due to end on 3rd of December 2022.
was on ~75% LTV @2.69 %

Switched to new deal on 2nd of August (earliest I could with Santander). Fixed for 5 years, at 3.44%. And I feel lucky that I managed to get it in time.

I am not sure what will be in 5 years though

aoleks

we're on 1.9% until Nov 2023, we'll wait and see what happens. yes, monthly payments might go up, but we're investing tens of thousands in the property to add as much value as possible, hence that LTV will have to come down significantly. even with some increases, which we can afford, btw, we'll be paying less than what we used to pay for a rental years ago, so in reality still cheap.

I haven't had a proper pay rise either, so will be looking to increase income from £70k to about £90k/year.

SusieT

I was very lucky and got a long term (15yr) fixed last year, so can ride out this bumpy time. I do  have an ex rental that is on the market, hopefully it will sell as it would be nice if it went to a family, but otherwise I will let it again and sell to an investor when one comes along. that will cover the mortgage interest and save me paying council tax as well for now.
Just spoken to a friend who was caught up in the NR to NRAM change, their house price has not properly recovered after the 2010 crash, and they do not have 20 or 25% equity to get a remortgage for landlord, so will be on i think they said about 6.5% interest. I suggested selling and have a feeling that is what will happen. 

Wanderers

Thankfully a few weeks ago I managed to grab a 2.6% 5 years fixed rate with Virgin.

My current 1.5% is due to finish in Novemeber so was glad they wrote to me with the offer as otherwise I'd have done nothing until closer then and would be looking at least 3.5% plus

RobHT

tony3619 said:

Hello, 

Just curious how people are finding the current situation and the potential Interest rate rises? Have most of you planned for these types of hiked by saving/getting better paid jobs etc? 

My situation is im currently on 1.69% fixed until May next year. I'm probably looking at 5-7% rates by the time I get there. Luckily my LTV is the lowest bracket and the loan value is only about 70 grand. It is shared ownership though so I'm expecting a big rent increase as it's tied to RPI which could be like 15% by that time. It's worrying times but I have savings that will prop up my wage in the short term for a number of years. 

I just don't see how this is sustainable in the longer term for most people. It's gonna get really bad out there...

Why do you think is gonna increase also the rent and up to 15%???
Are you talking about only the scam of shared ownership?

If I were you, I'd sell the house, take the equity before the crash, so you avoid the big increase of interest rates and the responsability of fixing everything inside that shared ownership house...

Reason why I don't buy, and one video is able to explain it very well, even a kid can understand: https://youtu.be/q9Golcxjpi8
Beyond this video, you can easily calculate it by yourself with more effort.

As I discussed in this forum a while ago (which generated a big discussion), it takes me 16 and more years to give a sense to buy something, if the interest rates grow at this speed, it could delay also other 10 years, at that point I'll be almost retired, and yes, no equity but no issues at all, I'll be able to pay rent anyway, otherwise it means that the entire economy crashed completely and so, also the mortgages would be extremely expensive for an almost retired person.
NOTE: it's already in this way since decades if you didn't manage your investments and pension scheme during your lifetime, NOTHING NEW.

As I predicted a long time ago, mortgages became more expensive than renting (YES, RIGHT NOW), but the truth is that it was already like that since years, but people are always searching for pigs flying.
The media always factored the prices WITHOUT the interests on top, that's one of the main reasons everyone is worried now...

In my situation, mortgages have been always 50-55% more the rent price, now it's even worst, up to 65% already...

Up to you what to do, you have the video for kids, plus some numbers here, it shouldn't take long for you to understand what to do and in what kind of trouble you've put yourself into.
Don't be too scared though, out there everyone that has a mortgage didn't understand a damn thing about economy, unfortunately arithmetic wasn't a thing for them.

In your situation, I'd be worried about the scheme though, rather then the increase, the main scam is there.

ACG

RobHT said:

tony3619 said:

Hello, 

Just curious how people are finding the current situation and the potential Interest rate rises? Have most of you planned for these types of hiked by saving/getting better paid jobs etc? 

My situation is im currently on 1.69% fixed until May next year. I'm probably looking at 5-7% rates by the time I get there. Luckily my LTV is the lowest bracket and the loan value is only about 70 grand. It is shared ownership though so I'm expecting a big rent increase as it's tied to RPI which could be like 15% by that time. It's worrying times but I have savings that will prop up my wage in the short term for a number of years. 

I just don't see how this is sustainable in the longer term for most people. It's gonna get really bad out there...

Why do you think is gonna increase also the rent and up to 15%???
Are you talking about only the scam of shared ownership?

If I were you, I'd sell the house, take the equity before the crash, so you avoid the big increase of interest rates and the responsability of fixing everything inside that shared ownership house...

Reason why I don't buy, and one video is able to explain it very well, even a kid can understand: https://youtu.be/q9Golcxjpi8
Beyond this video, you can easily calculate it by yourself with more effort.

As I discussed in this forum a while ago (which generated a big discussion), it takes me 16 and more years to give a sense to buy something, if the interest rates grow at this speed, it could delay also other 10 years, at that point I'll be almost retired, and yes, no equity but no issues at all, I'll be able to pay rent anyway, otherwise it means that the entire economy crashed completely and so, also the mortgages would be extremely expensive for an almost retired person.
NOTE: it's already in this way since decades if you didn't manage your investments and pension scheme during your lifetime, NOTHING NEW.

As I predicted a long time ago, mortgages became more expensive than renting (YES, RIGHT NOW), but the truth is that it was already like that since years, but people are always searching for pigs flying.
The media always factored the prices WITHOUT the interests on top, that's one of the main reasons everyone is worried now...

In my situation, mortgages have been always 50-55% more the rent price, now it's even worst, up to 65% already...

Up to you what to do, you have the video for kids, plus some numbers here, it shouldn't take long for you to understand what to do and in what kind of trouble you've put yourself into.
Don't be too scared though, out there everyone that has a mortgage didn't understand a damn thing about economy, unfortunately arithmetic wasn't a thing for them.

In your situation, I'd be worried about the scheme though, rather then the increase, the main scam is there.

What absolute rubbish. 
I did write a big post with my personal story, but whats the point. 
Ultimately since I bought my first home, my mortgage has been around 50% of what it would cost to rent the same place. 
My home has increased that much in 5 years that even if it lost 20% of its value, I would still be quids in.

Ultimately if rates keep going up, it will increase rent - it will have to as landlords become accustomed to certain profit margins and the rent needs to be x% above the mortgage repayments otherwise they lose money and will struggle to remortgage to competitive rates.