Mortgages early next year?

tony3619

Hello, 

I can secure a new fix rate in march as my deal ends in May. 

At the moment I'm opting to save a large proportion of the difference Instead of getting out of my current deal and paying an ERC and hope rates are not as bad as feared when it comes time to get a new deal. 

Im looking at the current rates and wondering if many already factor in Boe base rate hikes in Nov + Dec. With rates being 6% that is way over the base rate.

Would you expect fixed rates to be higher than 8% come February/March? 

smipsy

Up until today, I wouldn't have expected anything near 8% as it would imply things have gone seriously wrong. Looking at what is happening to the gilt market today/tonight, I'm starting not to be so sure about it...

PK_London

Do we have any more opinions on this given the current turmoil in the bond markets?

biscan25

So all the upcoming policy announcements from BoE are priced into the fixed mortgage rates in theory.
So the rates available shouldn't change much from their current position, if the market is 'right' about what the BoE should do.
There's a huge amount of uncertainty about the above. The labour market data released today is diabolical, with the NHS crisis moving from a health crisis to an economic one. This will make it much more difficult to raise rates further,

There's probably a bit of supply/demand factors playing into swap prices currently, so in theory the rates could come down slightly, as the demand for new fixed mortgages subsides.
In practice, the government keeps opening it's mouth heaping worry onto the bond markets. Also, Credit Suisse could go either way.

In conclusion, who knows? If you are set on not fixing again until March there's precious little point in worrying too much until then.

As an aside, some lenders now let you lock in rates up to 6 months before rather than 3.

simon_or

I wouldn't wait to March. With a fix ending in May I would lock in a high street rate now. You could reserve a rate with Nationwide for 3 months, followed by an offer valid for 6 months so that will comfortably take you beyond May.

When you get a rate switch offer from your current bank in March, you can compare and decide what to do.

Who knows where rates will end up, there are so many triggers that could make things worse - the boe ending its gilts bailout the end of this week, the fiscal statement by the government at the end of the month (and anything else they do/say in the meantime), the fed rate rise early Nov, etc.

tony3619 said:

Hello, 

I can secure a new fix rate in march as my deal ends in May. 

At the moment I'm opting to save a large proportion of the difference Instead of getting out of my current deal and paying an ERC and hope rates are not as bad as feared when it comes time to get a new deal. 

Im looking at the current rates and wondering if many already factor in Boe base rate hikes in Nov + Dec. With rates being 6% that is way over the base rate.

Would you expect fixed rates to be higher than 8% come February/March?