Mortgages over the next couple of months?

tony3619

Hello, 

I'm looking to stay with my current mortgage provider (personal reasons) and after the lasted base rate increase they have dropped there 2 year fixed rate from 6.49% to 5.39%

My question is where do people think mortgages will be after the next base rate Increase? I can fix early at the end of march without an early repayment charge so am hoping mortgage rates stay under 6% upto that point. Would most rates now factor in the "peak" of 4.5%? 

It seems rates are still dropping slowly even when the base rate is predicted to keep rising. 

TheJP

I'm in the same predicament, my current lender has offered a fix for 5 years at just under 5% however i feel the fixed rates will start to drop in 12 months time. I've decided to go on their freedom tracker rate .6% above BOE and ride it out, i can jump onto one of their fixed products at anytime without incurring a ERC. My fear is that i lock in for 5 years and the rates look more favourable in 1-2 years. Its a risk but i have the flexibility to get on a fix if needs be.

gih

Definitely reckon a peak of (at least) 4.5% is factored in (although I'm not 100% convinced 4.5% will be the peak myself).

We're moving start of Feb, but have decided to delay going onto a fixed rate for now. Since our first mortgage offer in October, rates for a 5-year fix (with Nationwide) have fallen from 5.64% to currently 4.59%. Obviously happy about this, but I feel like they could fall (a bit) further. Like @TheJP, we've also opted for a fee-free tracker, with a view to switching to a fix when the time feels right, hopefully after another fall or two. In the meantime, keeping an eye on the latest inflation figures announced each month, and each BoE interest rate decision, just in case there are any nasty surprises. If there are, I'll probably switch at that point. Keeping an eye on the 2-year and 3-year fixes as well obviously.

JustDavid

Stabilisation is expected at around 4%, although inflation coming down will be the biggest deciding factor. Pretty much all lenders will have factored in the next couple of increases already when rates come out. Realistically though if you are being offered 4 point something % you are probably on the best you are going to get. Mortgage rates will (nearly) always be higher than the base rate, so if the BoE rate increase up to 4%, all rates will be higher than that, equally if they hit 4.5% expect rates of 5% and above. (Obviously your LTV factors into rate as well). All we are seeing now is a return to normal, baring in mind from a financial view point we haven't been in a normal world since 2008. typically the base rate always floats around 5% with tweaks to increase or decrease inflation as required.

coypondboy

If labour win the next election which is highly likely in 2 yrs time I think bond markets will take fright and a run on the pound will force bofe from reducing rates so I would fix for 5 yrs in a few months time but not for more than 5%.

IAMIAM

coypondboy said:

If labour win the next election which is highly likely in 2 yrs time I think bond markets will take fright and a run on the pound will force bofe from reducing rates so I would fix for 5 yrs in a few months time but not for more than 5%.

Highly likely...I am still unsure they will! 
That being said, if they do, then is that a good 5 years of BOE around 4.5-5% starting now.....suely not?!

mi-key

coypondboy said:

If labour win the next election which is highly likely in 2 yrs time I think bond markets will take fright and a run on the pound will force bofe from reducing rates so I would fix for 5 yrs in a few months time but not for more than 5%.

Never underestimate the stupidity if British voters.... some people vote tory whatever happens

IAMIAM

Most people!!!

Letsgetmoving

When we first applied for our mortgage in November it was 5.39% in December it went to 5.09% and as of today is 4.59%

Thankfully we’re able to update our offer saving us £90p/m.

it looks like the banks had a massive knee jerk reaction to the mini budget and things are still settling down. I wouldn’t expect rates to drop too much lower though as interest rates are almost guaranteed to keep rising. 

tony3619

Letsgetmoving said:

When we first applied for our mortgage in November it was 5.39% in December it went to 5.09% and as of today is 4.59%

Thankfully we’re able to update our offer saving us £90p/m.

it looks like the banks had a massive knee jerk reaction to the mini budget and things are still settling down. I wouldn’t expect rates to drop too much lower though as interest rates are almost guaranteed to keep rising. 

So it seems everyone is in agreement mortgage rates are likely to be around the 4.5-6% range unless the BOE does something unexpected?

If you would of offered me a 5.39% rate 4 months ago during the short reign of Truss I would of bitten your hand off. 

Back then I was planning for 8-9% new fix and trying to save anything I could while still on my current 1.69%

sjaeagle5

I know no-one has a crystal ball but I'm having trouble justifying fixing for 5 years at something around 5% thinking that rates may come down(?).
However, if I fix for 10 years at 4.04%, I run the risk of paying above the odds in the future, or do I..?
I really don't know what to do at the moment, though luckily I don't have to make a decision for about 6 months.
Any thoughts?

[Currently fixed at 2.19% until Sep23 and making overpayments to ensure we come under the 60% LTV threshold]