Base rate to hit 7% by middle of next year?

coypondboy

SVR will be 10% if this happens having a fixed rate of 1% at the moment will be fooked if it does anyone else in the same position and what should we do?

propertyhunter

Tighten your belts now, saving as much as you can. Plan for the worst and hope for the best. If it's unaffordable, you may have to considering selling, but that's the last resort. Consider second jobs, overtime (if possible), in addition to cutting expenses. A lodger could help soften the blow as well. There are options. 

You could also consider looking at mortgage costs today, balance it against any ERC, and see whether you're happy with the costs and then take that option if it is affordable if you think interest rates are only going one way. 

Sarah1Mitty2

Start tightening now, get the highest savings rate you can get, or a money market fund, and the lodger idea is good financially if not so great for quality of life (unless you really get on well with them)

penners324

I doubt interest rates will go that high that quickly. Inflation has started to fall, so the imperative for higher interest rates is lessening.

There's is 1 big issue that is keeping Inflation up though, and another linked that will impact food prices. The Ukraine war and the devastation caused by the dam collapsing has wiped out a lot of farm land.

themanfromportobello

coypondboy said:

SVR will be 10% if this happens having a fixed rate of 1% at the moment will be fooked if it does anyone else in the same position and what should we do?

"SVR will be 10%".... well this may (or may not) get that high, but you will be able to fix lower than any SVR

ElwoodBlues

themanfromportobello said:

coypondboy said:

SVR will be 10% if this happens having a fixed rate of 1% at the moment will be fooked if it does anyone else in the same position and what should we do?

"SVR will be 10%".... well this may (or may not) get that high, but you will be able to fix lower than any SVR

Only a bit lower though - my lender is currently offering a fix of 6.24% and their SVR is 7.49%.

michaels

The markets (so best guess) are currently seeing the average rate for both the next 12 months and next 24 months as about 5.5%.

I know the BoE is 'independent' but we will see headline inflation fall due to reverses in energy and food prices which will take pressure off in the short term and electoral politics will mean the govt will want to play this up over core inflation which will not fall as much or as quickly.

Economics would say squeeze out core inflation now, politics would say leave it until after the next election....

themanfromportobello

ElwoodBlues said:

themanfromportobello said:

coypondboy said:

SVR will be 10% if this happens having a fixed rate of 1% at the moment will be fooked if it does anyone else in the same position and what should we do?

"SVR will be 10%".... well this may (or may not) get that high, but you will be able to fix lower than any SVR

Only a bit lower though - my lender is currently offering a fix of 6.24% and their SVR is 7.49%.

I'd hardly call a SVR of 2.51% below 10% a 'only a bit' that is 25.1% lower 

dunstonh

Historically, interest rates have had to go higher than the core inflation rate to work.   So, 7% is a possibility.  However, Monetary policy hasn't just been on interest rates.  It has also been on taxation with some significant tax increases.    

michaels

Pedant alert - that would be fiscal policy

ElwoodBlues

themanfromportobello said:

ElwoodBlues said:

themanfromportobello said:

coypondboy said:

SVR will be 10% if this happens having a fixed rate of 1% at the moment will be fooked if it does anyone else in the same position and what should we do?

"SVR will be 10%".... well this may (or may not) get that high, but you will be able to fix lower than any SVR

Only a bit lower though - my lender is currently offering a fix of 6.24% and their SVR is 7.49%.

I'd hardly call a SVR of 2.51% below 10% a 'only a bit' that is 25.1% lower 

My point is that currently offered fixed rates are only just over 1% cheaper the SVR. If the SVR goes up to 10% I'm pretty certain that fixed rates will increase too. Hopefully not by as much, but who knows for sure.