Will mortgage rates increase or stabilize/ should we make this house move?!

mi-key

Sarah1Mitty2 said:

mi-key said:

Rates seem to have stabilised, so barring any great disasters, they will probably stay around the level they are for the next 5 years. Interest rates probably aren't going to rise by much, or drop back to what they were before for a good while, so a long term fix would be a good plan.

Speak to a broker and give them your figures and see how the affordability for borrowing works out

Very unlikely that this can be predicted with any degree of accuracy to be honest, but if the OP still has a house to sell they are jumping too many steps ahead at the moment anyway.

You can be fairly certain, as I said, unless there is some big disaster then they aren't going to raise interest rates much more than they are now, and lenders have already priced in a larger increase than we have had into their rates, so would be no reason for them to go up much more unless people are on trackers.

If someone can afford a  5 year fix at the rate it is now, it's highly unlikey in 5 years time when it ends interest rates are going to be lots higher than they are now.

Of course none of us have a crystal ball, but it is easy enough to minimise risks. 

mi-key

FrugalCat said:

mi-key said:

Rates seem to have stabilised, so barring any great disasters, they will probably stay around the level they are for the next 5 years. Interest rates probably aren't going to rise by much, or drop back to what they were before for a good while, so a long term fix would be a good plan.

Whatever compelled this statement, ignore it. The governor of the Bank of England couldn't make this assumption with any reasonable degree of certainty.

To answer your question: Only you can work out how much you can afford to risk.

Go through some scenarios. What if... your mortgage is X% more? you lose your job? someone becomes long term sick/ dies? 

Work out where your limits of affordability are & what would stretch you beyond the limit. And then decide if you're willing to take the risk or not, based on how likely it is (or perhaps decide to negate the risk via insurance?).

Whatever happens, it's your responsibility to make the decision and live with the consequences.

If everyone did this then nobody would ever buy a house. 

dunstonh

You can be fairly certain, as I said, unless there is some big disaster then they aren't going to raise interest rates much more than they are now, 

Are you sure?    Historically, in the majority of periods of high inflation, interest rates had to rise above the level of inflation.

However, I personally believe this occasion won't be one of those.   However, the next occasion may do and with a long term mortgage and the end of globalisation and the peace dividend, the next negative event is likely to be closer and more in line with 90s or earlier.

Interest rates today, are still cheaper than the long term average.  So, anyone taking on a mortgage at current rates and pushing it to the limit is going to be at increased risk when interest rates rise again [at whatever point in time in the future].   

They are expected to fall back a little but they are not going back to where they were and in the long term, they are going to look to get them back to historic norms whenever it is possible for the economies of the world to handle it.

Predicting when or how much is pretty much impossible.

If everyone did this then nobody would ever buy a house. 

Why?
Sick or die is covered by insurance.   Most people have some sort of insurane
unemployment can be covered by insurance.   
Everyone should be budgeting on higher interest rates.   £7pm for every £1,000 borrowed gets you closer to the long term average on a traditional 25 year repayment mortgage.

unclebobsleigh

mi-key said:

Rates seem to have stabilised, so barring any great disasters, they will probably stay around the level they are for the next 5 years. Interest rates probably aren't going to rise by much, or drop back to what they were before for a good while, so a long term fix would be a good plan.

Speak to a broker and give them your figures and see how the affordability for borrowing works out

Bank of England continues to increase interest rates (9th time in a row?). Not sure there are any signs of stabilisation. 

mi-key

unclebobsleigh said:

mi-key said:

Rates seem to have stabilised, so barring any great disasters, they will probably stay around the level they are for the next 5 years. Interest rates probably aren't going to rise by much, or drop back to what they were before for a good while, so a long term fix would be a good plan.

Speak to a broker and give them your figures and see how the affordability for borrowing works out

Bank of England continues to increase interest rates (9th time in a row?). Not sure there are any signs of stabilisation. 

This is predicted to be the last ( small ) increase for a while, with possible small drops towards the end of the year. Lending rates are pretty stable now and won't see any huge increases if that is the case

TonyTeacake

unclebobsleigh said:

mi-key said:

Rates seem to have stabilised, so barring any great disasters, they will probably stay around the level they are for the next 5 years. Interest rates probably aren't going to rise by much, or drop back to what they were before for a good while, so a long term fix would be a good plan.

Speak to a broker and give them your figures and see how the affordability for borrowing works out

Bank of England continues to increase interest rates (9th time in a row?). Not sure there are any signs of stabilisation. 

unclebobsleigh said:

mi-key said:

Rates seem to have stabilised, so barring any great disasters, they will probably stay around the level they are for the next 5 years. Interest rates probably aren't going to rise by much, or drop back to what they were before for a good while, so a long term fix would be a good plan.

Speak to a broker and give them your figures and see how the affordability for borrowing works out

Bank of England continues to increase interest rates (9th time in a row?). Not sure there are any signs of stabilisation. 

I have to agree as I think they will be lots of ups and downs as inflation is now embedded into our economy. Expect to see at least a 0.5% hike today but don't be surprised if we see 0.75% base rate hike.

mi-key

TonyTeacake said:

unclebobsleigh said:

mi-key said:

Rates seem to have stabilised, so barring any great disasters, they will probably stay around the level they are for the next 5 years. Interest rates probably aren't going to rise by much, or drop back to what they were before for a good while, so a long term fix would be a good plan.

Speak to a broker and give them your figures and see how the affordability for borrowing works out

Bank of England continues to increase interest rates (9th time in a row?). Not sure there are any signs of stabilisation. 

unclebobsleigh said:

mi-key said:

Rates seem to have stabilised, so barring any great disasters, they will probably stay around the level they are for the next 5 years. Interest rates probably aren't going to rise by much, or drop back to what they were before for a good while, so a long term fix would be a good plan.

Speak to a broker and give them your figures and see how the affordability for borrowing works out

Bank of England continues to increase interest rates (9th time in a row?). Not sure there are any signs of stabilisation. 

I have to agree as I think they will be lots of ups and downs as inflation is now embedded into our economy. Expect to see at least a 0.5% hike today but don't be surprised if we see 0.75% base rate hike.

Everyone is predicting 0.5% which I expect they would do. Of course it would help if companies like Shell weren't profiteering and pushing inflation higher !

GalaxyGirl90

Just to update: we viewed the house yesterday afternoon.
It was just not for us, and especially with the price tag (for us!) 
Back to the drawing board for a property hopefully £50k cheaper
I think I am just getting frustrated with the lack of choice....! 

FrugalCat

mi-key said:

Sarah1Mitty2 said:

mi-key said:

Rates seem to have stabilised, so barring any great disasters, they will probably stay around the level they are for the next 5 years. Interest rates probably aren't going to rise by much, or drop back to what they were before for a good while, so a long term fix would be a good plan.

Speak to a broker and give them your figures and see how the affordability for borrowing works out

Very unlikely that this can be predicted with any degree of accuracy to be honest, but if the OP still has a house to sell they are jumping too many steps ahead at the moment anyway.

You can be fairly certain, as I said, unless there is some big disaster then they aren't going to raise interest rates much more than they are now, and lenders have already priced in a larger increase than we have had into their rates, so would be no reason for them to go up much more unless people are on trackers.

If someone can afford a  5 year fix at the rate it is now, it's highly unlikey in 5 years time when it ends interest rates are going to be lots higher than they are now.

Of course none of us have a crystal ball, but it is easy enough to minimise risks. 

None of us have a crystal ball - therefore the only thing you can be fairly certain about is that you are overconfident in your own opinion.

"The days of ultra low interest rates are behind us" according to Michael Saunders, someone who does this as a job.

mi-key said:

FrugalCat said:

mi-key said:

Rates seem to have stabilised, so barring any great disasters, they will probably stay around the level they are for the next 5 years. Interest rates probably aren't going to rise by much, or drop back to what they were before for a good while, so a long term fix would be a good plan.

Whatever compelled this statement, ignore it. The governor of the Bank of England couldn't make this assumption with any reasonable degree of certainty.

To answer your question: Only you can work out how much you can afford to risk.

Go through some scenarios. What if... your mortgage is X% more? you lose your job? someone becomes long term sick/ dies? 

Work out where your limits of affordability are & what would stretch you beyond the limit. And then decide if you're willing to take the risk or not, based on how likely it is (or perhaps decide to negate the risk via insurance?).

Whatever happens, it's your responsibility to make the decision and live with the consequences.

If everyone did this then nobody would ever buy a house. 

No, if everybody did this, we'd have more stable and normal house prices and avoid boom-bust cycles.

It's common sense to avoid too much risk. Unfortunately common sense isn't very common.

And the majority of people are bad with their own money, never mind that of banks.

TonyTeacake

GalaxyGirl90 said:

Just to update: we viewed the house yesterday afternoon.
It was just not for us, and especially with the price tag (for us!) 
Back to the drawing board for a property hopefully £50k cheaper
I think I am just getting frustrated with the lack of choice....! 

At least you know now it is not for you after your viewing. Good luck with your house hunt. I am predicting prices will fall substantially over the next couple of years.