Did anyone recently fix at 6% or above and are you still happy with your decision

PK_London

I recall in the days after the mini-budget there was a lot of panic as mortgage rates seems to be rising incessantly on a daily basis.

It looks like with the new government and promises of public sector cuts and tax rises, interest and mortgage rates may not end up being as high as some had predicted.

Did any of you fix at or close to 6% and if so are you still happy with your decision? Where do you think mortgage rates will be by summer 2023?

housebuyer143

Nope. Stuck with the tracker and pleased I did. Couldn't bring myself to fix that high. 

diystarter7

There may be more panic as often the straw that breaks the camel's back comes out of the blue in an already dire situation.
Think back to black wed and friday.

Most of us know why truss got in and most of us knew that Truss was a walking time bomb. Had it not been for HM's death truss would have been out sooner. I also feared Truss getting us in direct conflict with russia.  Even a 1 year old child could have easily done a better job than her.

One of our kids whos several hundred k mortgage 5 year fix was coming to an end next July and   paid a penalty to live the fixed rate and moved to 3.7 for 5 years I thin - he is happy with that as are we as its a bit of certainty in these uncertain times.

Truss and her ministers have a lot to answer for.

dunstonh

I wasnt going to buy my current deal out and go onto a higher long term fix.  Didn't seem any logic in it.
My deal ends in Dec 23.  By that time, it should have peaked and levelled and even possibly fallling back again.

Truss and her ministers have a lot to answer for.

It is easy to blame here for everything but we must remember that gilts had already suffered massively before she was in power.  They started to go into decline in November 2021.    The budget was a silly error but there is something else at play here.  Even if you take the cost of her error into account, the financial differences do not add up.  

Most of us know why truss got in and most of us knew that Truss was a walking time bomb. 

Indeed.  It looked like Rishi was going to have an easy ride but his mistakes in his campaigning were highly damaging.   And Truss somehow managed to put across a better campaign than anyone expected.  She actually sounded like a Conservative and it's been a long time since a Conservative MP has done that. She played to the audience.  Shame she didn't have the competency to go with it.   

simon_or

PK_London said:

I recall in the days after the mini-budget there was a lot of panic as mortgage rates seems to be rising incessantly on a daily basis.

It looks like with the new government and promises of public sector cuts and tax rises, interest and mortgage rates may not end up being as high as some had predicted.

Did any of you fix at or close to 6% and if so are you still happy with your decision? Where do you think mortgage rates will be by summer 2023?

Equally, it could all go t*ts up if the govt aren't able to get their plans through parliament, or there's unexpected political volatility, or a number of other unknown unknowns.

No one knows. Hence if fixing at 6% or thereabouts was the right decision for an individual 4 weeks ago, it's unlikely to be any different today. Every household's circumstances and every mortgage is different and there are plenty of scenarios in which the right decision for some might be fixing for 5 years at a high rate rather than leaving themselves exposed to rate changes.

And similarly in the other direction for people for whom a tracker or discounted variable rate was the right decision.

The eventual outcome may or may not be in your favour (as it largely depends on things outside your control) but that doesn't make the decision wrong.

PK_London

diystarter7 said:

There may be more panic as often the straw that breaks the camel's back comes out of the blue in an already dire situation.
Think back to black wed and friday.

Most of us know why truss got in and most of us knew that Truss was a walking time bomb. Had it not been for HM's death truss would have been out sooner. I also feared Truss getting us in direct conflict with russia.  Even a 1 year old child could have easily done a better job than her.

One of our kids whos several hundred k mortgage 5 year fix was coming to an end next July and   paid a penalty to live the fixed rate and moved to 3.7 for 5 years I thin - he is happy with that as are we as its a bit of certainty in these uncertain times.

Truss and her ministers have a lot to answer for.

With CPI inflation being 11.1% and food inflation being over 16% a 3.7% for 5yrs is a very lucky deal indeed!

PK_London

dunstonh said:

I wasnt going to buy my current deal out and go onto a higher long term fix.  Didn't seem any logic in it.
My deal ends in Dec 23.  By that time, it should have peaked and levelled and even possibly fallling back again.

Truss and her ministers have a lot to answer for.

It is easy to blame here for everything but we must remember that gilts had already suffered massively before she was in power.  They started to go into decline in November 2021.    The budget was a silly error but there is something else at play here.  Even if you take the cost of her error into account, the financial differences do not add up.  

Most of us know why truss got in and most of us knew that Truss was a walking time bomb. 

Indeed.  It looked like Rishi was going to have an easy ride but his mistakes in his campaigning were highly damaging.   And Truss somehow managed to put across a better campaign than anyone expected.  She actually sounded like a Conservative and it's been a long time since a Conservative MP has done that. She played to the audience.  Shame she didn't have the competency to go with it.   

You have got to look at the macro-economics. UK economic policies are tied to the US. Their 30yr mortgage rates were over 6% this summer and we soon followed. The mini-budget only accelerated the inevitable. The current average US mortgage rate happens to be 7.14% and their inflation rate is just over 7% compared to our 11.1%

simon_or

Genuine question PK, why do you say that UK economic policies are tied to the US rather than say the Eurozone?

UK mortgage rates (2-5yr fixes) will go with US rates and (say) not with Eurozone mortgage rates which are much lower and have the same (if not higher) inflation than us?

I don't think the US and UK (or Germany and UK) mortgage rates can be compared on an apples to apples basis.

PK_London

simon_or said:

Genuine question PK, why do you say that UK economic policies are tied to the US rather than say the Eurozone?

UK mortgage rates (2-5yr fixes) will go with US rates and (say) not with Eurozone mortgage rates which are much lower and have the same (if not higher) inflation than us?

I don't think the US and UK (or Germany and UK) mortgage rates can be compared on an apples to apples basis.

UK and Euro policies are loosely tied to the US. IMO the main issue is the strength of Sterling. Energy prices and most imports are measured in USD so if the pound weakens then imports and energy become more expensive = inflation. Its more critical that the pound stays strong because in the US they're less sensitive to rate rises and are energy independent. Hence why US inflation is 7% while ours is 11%. On the plus side for mortgages, we now see gilt and swap rates are more important in determining UK mortgage rates so even if base rates rise, mortgage rates might not follow. Its not even that Sterling is weak, its that the whole world is buying into the USD so other currencies are weakening. However, being simplistic, the UK does seem to follow the US so the fact that their inflation is dropping might mean ours has too. The big factor will be in April when the energy price cap is dropped and some people may be forced to pay market rates. Our big inflation component is energy which the US is not really effected by

junglist_matty

I paid a £3500 Early Repayment Charge in Dec last year in order to leave my fixed deal 16months early and switch to a new 5 yr fixed at 0.94% that runs till Dec 2027.... I'm so glad I did that, the deals on the table now mean that decision has saved me tens of thousands had I waited till now for my old deal to end to avoid the ERC.

[Deleted User]

dunstonh said:

I wasnt going to buy my current deal out and go onto a higher long term fix.  Didn't seem any logic in it.
My deal ends in Dec 23.  By that time, it should have peaked and levelled and even possibly fallling back again.

Truss and her ministers have a lot to answer for.

It is easy to blame here for everything but we must remember that gilts had already suffered massively before she was in power.  They started to go into decline in November 2021.    The budget was a silly error but there is something else at play here.  Even if you take the cost of her error into account, the financial differences do not add up.  

Most of us know why truss got in and most of us knew that Truss was a walking time bomb. 

Indeed.  It looked like Rishi was going to have an easy ride but his mistakes in his campaigning were highly damaging.   And Truss somehow managed to put across a better campaign than anyone expected.  She actually sounded like a Conservative and it's been a long time since a Conservative MP has done that. She played to the audience.  Shame she didn't have the competency to go with it.   

I could not agree more.