Rate predictions

[Deleted User]

HWBY said:

With Halifax? We submitted our application for that rate today, fingers crossed!

Yes, that's the one! Wishing you the best with your application, sounds like you got it in just in time!

sevenhills

No one can predict interest rates further than twelve months ahead, even a month ago bo one knew the government would have a mini budget that pushed up rates.

ElwoodBlues

No, it's very unlikely that rates will ever go back down to <2% in the next 10 years, if ever in the life of your mortgage. Make the most of the rate you have and overpay to soften the blow when that fix expires.

I do think that the boe is over reacting with these rapid rate rises, and I'm mildly optimistic that they'll peak and start falling (a bit) before the end of 2023. But I'm just some idiot on the internet!

Sub 1% rates were exceptionally low, although I know a few people who's tracker rate went negative after the 2008 crash so stranger things have happened.

PK_London

It's unlikely inflation will be tamed unless interest rates are higher than inflation and we're a long way from that. I expect 5yrs of high rates and if we're lucky they will gently fall back to where they are today over the next 5. Inflation is a difficult genie to put back in the bottle. In the US, their mortgage rates are averaging 7% and they still have a few rate rises to go.

Edi81

Interest rates aren’t going to come down any time soon. 

Market expectation at the moment is for base rate between 4 and 5% for the next few years. 

The days of sub 1% are long gone!

fewcloudy

sevenhills said:

No one can predict interest rates further than twelve months ahead, even a month ago bo one knew the government would have a mini budget that pushed up rates.

Agree with that.
Whenever there's been unexpected rises and falls, the point is they are unexpected. No-one saw it coming (well there's always some will say they did) so talk of No Chance, and Never, are just wrong IMO.
You do what you think, based on your own thoughts.
The macro-level issues affecting the economy, and IMO it's a big list, well some of them could be gone soon, or not!
Post-pandemic recovery. War in Ukraine. Very high energy prices. Climate change.Unexpected global weather events. Unstable /unpredictable UK economics. Not all are unrelated either. On the whole they they cause uncertainty in the markets, but they could in fact change rapidly.
No-one making mortgage decision 3 years ago thinking about a War in Europe for goodness sake.

Cheesy77

PK_London said:

It's unlikely inflation will be tamed unless interest rates are higher than inflation and we're a long way from that. I expect 5yrs of high rates and if we're lucky they will gently fall back to where they are today over the next 5. Inflation is a difficult genie to put back in the bottle. In the US, their mortgage rates are averaging 7% and they still have a few rate rises to go.

I'm not sure I agree with this. Some of the recent figures suggest Inflation may have already now peaked and be starting to decrease very slightly. 

The BOE predictions are that it'll have reduced significantly by 2024 much more in line with 2% target. This is why some tory mp's have (wrongly) suggested interest rates shouldn't go up further. 

My view is they will peak and then decrease again, but not to under 1% as they had been.

With a likely recession and a government banging the drum for growth growth growth, it would not make any sense to keep interest rates that high for any longer than was absolutely needed to reduce inflation 

Aberdeenangarse

Cheesy77 said:

PK_London said:

It's unlikely inflation will be tamed unless interest rates are higher than inflation and we're a long way from that. I expect 5yrs of high rates and if we're lucky they will gently fall back to where they are today over the next 5. Inflation is a difficult genie to put back in the bottle. In the US, their mortgage rates are averaging 7% and they still have a few rate rises to go.

With a likely recession and a government banging the drum for growth growth growth, it would not make any sense to keep interest rates that high for any longer than was absolutely needed to reduce inflation 

BOE / Government target for inflation is 2% We won’t be seeing that again for a long time. I’d be surprised if mortgage rates dropped much below 5% in the next few years. 

Bobbych

I am in a similar position, and cannot decide the best way to go

My Fixed 2.24% ends in Feb 23.  
Current offers from my lender are

5Yr Fixed 5.29% - £999 Fee and ERC of £600

or

2 Yr Fixed TRACKER - 0.79% above Base, currently 3.04% (same £999 Fee and ERC £600)


so I am in a quandry, do I bite the bullet and re-fix, and if so, which one (fees are the same)

or

wait until Nov 2nd, when my ERC is Zero, still Same Fees

or

Wait until my current deal ends, Feb 23, and see what is around?

 I really cannot decide

Cheesy77

Aberdeenangarse said:

Cheesy77 said:

PK_London said:

It's unlikely inflation will be tamed unless interest rates are higher than inflation and we're a long way from that. I expect 5yrs of high rates and if we're lucky they will gently fall back to where they are today over the next 5. Inflation is a difficult genie to put back in the bottle. In the US, their mortgage rates are averaging 7% and they still have a few rate rises to go.

With a likely recession and a government banging the drum for growth growth growth, it would not make any sense to keep interest rates that high for any longer than was absolutely needed to reduce inflation 

BOE / Government target for inflation is 2% We won’t be seeing that again for a long time. I’d be surprised if mortgage rates dropped much below 5% in the next few years. 

Really? You clearly know something the Bank of England doesn't. 

This is an article on their website published just a week ago: https://www.bankofengland.co.uk/knowledgebank/will-inflation-in-the-uk-keep-rising

Direct quote from article "We expect inflation to start to fall next year. We have a target of 2% for inflation. We expect inflation to be close to that target in around two years."