February Mortgage Rates?

ACG

This week I have had 2 lenders send emails with them increasing rates - one of them was nationwide who have been one of the cheapest for a while. 

I cant work out if it is because demand has increased and they are busy or we have bottomed out on rates - time will tell I suppose but I think we might be close to the bottom if not already there. 

Hoenir

ACG said:

This week I have had 2 lenders send emails with them increasing rates - one of them was nationwide who have been one of the cheapest for a while. 

I cant work out if it is because demand has increased and they are busy or we have bottomed out on rates - time will tell I suppose but I think we might be close to the bottom if not already there. 

Many mortgage rates are still sitting below BOE base.  Suggests that there's a long way to go before this inverse relationship is corrected. A return to the pre 2008 era.

A higher base rate in itself constrains what lenders can advance. As increased capital reserves need to be maintained. Month by month existing fixed term products have to be refinanced. Said that it takes 18 months for a change in base rate to hit the real economy. Perhaps the very first signs that the ice is cracking. 

SH88

Thank you all for your responses and experiences.

I've decided to go with the 10-year Fixed Rate at 4.86%.
I have a 70.55 LTV and will be paying £1088 per month.

It's more than what I was paying coming from a 1.4%, but I've learned my lesson with fixing for only 2 years.

My personal take from this is I have discovered I prefer security over gambling.
The rates will likely only come down 1%.. but with worldwide crisis' and the unpredictablilty of what's next for our Government, the rates could very well increase much more than 1% in the future...

So I'm feeling good, and relieved that the renewal is over.
Thank you for all your help. 

ACG

Hoenir said:

ACG said:

This week I have had 2 lenders send emails with them increasing rates - one of them was nationwide who have been one of the cheapest for a while. 

I cant work out if it is because demand has increased and they are busy or we have bottomed out on rates - time will tell I suppose but I think we might be close to the bottom if not already there. 

Many mortgage rates are still sitting below BOE base.  Suggests that there's a long way to go before this inverse relationship is corrected. A return to the pre 2008 era.

A higher base rate in itself constrains what lenders can advance. As increased capital reserves need to be maintained. Month by month existing fixed term products have to be refinanced. Said that it takes 18 months for a change in base rate to hit the real economy. Perhaps the very first signs that the ice is cracking. 

I wont even pretend to be smart enough to understand it all. I have a couple of financial advice exams they qualify me in no way at all to be an economist. 

But my sort of thinking is that as it is typically the 5 year fixed rates that are better priced, it suggests that banks think within the longer term rates will drop. Whilst they might be losing out now, they are banking on benefitting at the latter end of the deal. 

It seems like the base rate is expected to be at least .5% lower by the end of the year than it is now, some people have suggested .75%, the governer said yesterday that the next rate change is more likely to be a drop than a rise. Everything is suggesting the base rate will come down, which sort of suggests the gap will close. 

Altior

ACG, the so called highly qualified experts, on mighty six figure salaries (so high they don't know exactly how much it is) don't actually understand it either. The BoE have perfected the art of selling assets at the bottom price. Back in 2021 they were confident that UK inflation was 'transitory'. 

Inflation rise will be temporary, says Bank governor Bailey

The recent surge in consumer prices will be a temporary phenomenon as the UK emerges from the pandemic, the Bank of England's governor has insisted.

Andrew Bailey told the BBC the jump in inflation was understandable given the "bumpy" economic recovery.

On Thursday, the Bank warned inflation will hit 4% this year, higher than previously forecast and double the 2% rate it aims for.

But policymakers decided to leave interest rates unchanged at 0.1%.

We are far better off using our own instincts in my view.

Hoenir

Altior said:

ACG, the so called highly qualified experts, on mighty six figure salaries (so high they don't know exactly how much it is) don't actually understand it either. The BoE have perfected the art of selling assets at the bottom price. Back in 2021 they were confident that UK inflation was 'transitory'. 

Are you suggesting that they should have foreseen the Ukraine/Russia conflict?  Forecasting is a rolling exercise. Updated every month as the future unfolds. Data driven.  Hindsight is of course an exact science. Unarguable. 

Altior

Hoenir said:

Altior said:

ACG, the so called highly qualified experts, on mighty six figure salaries (so high they don't know exactly how much it is) don't actually understand it either. The BoE have perfected the art of selling assets at the bottom price. Back in 2021 they were confident that UK inflation was 'transitory'. 

Are you suggesting that they should have foreseen the Ukraine/Russia conflict?  Forecasting is a rolling exercise. Updated every month as the future unfolds. Data driven.  Hindsight is of course an exact science. Unarguable. 

Are you saying that the Ukraine/Russia conflict caused the huge global inflation spike? And not countries around the world 'printing' money and handing a lot of it out directly to the population when there wasn't an awful lot to spend it on, and economies re-opening broadly at the same time after unprecedented economic lockdowns causing a massive demand/supply mismatch? I can't believe some people are still buying into the propaganda that it was Russia wot dun it.

ACG

Altior said:

Hoenir said:

Altior said:

ACG, the so called highly qualified experts, on mighty six figure salaries (so high they don't know exactly how much it is) don't actually understand it either. The BoE have perfected the art of selling assets at the bottom price. Back in 2021 they were confident that UK inflation was 'transitory'. 

Are you suggesting that they should have foreseen the Ukraine/Russia conflict?  Forecasting is a rolling exercise. Updated every month as the future unfolds. Data driven.  Hindsight is of course an exact science. Unarguable. 

Are you saying that the Ukraine/Russia conflict caused the huge global inflation spike? And not countries around the world 'printing' money and handing a lot of it out directly to the population when there wasn't an awful lot to spend it on, and economies re-opening broadly at the same time after unprecedented economic lockdowns causing a massive demand/supply mismatch? I can't believe some people are still buying into the propaganda that it was Russia wot dun it.

The price of oil and gas jumped after the invasion of Ukraine. 
Again, not qualified but to me the war did cause the huge global inflation spike or at the very least played a large part in it. 

Also Russia and Belarus account for around a third of global nitrogen supplies. 

Between those 2 things, food production and production in general caused a spike in manufacturing costs which has a knock on effect on everything. 

cymruchris

ACG said:

Altior said:

Hoenir said:

Altior said:

ACG, the so called highly qualified experts, on mighty six figure salaries (so high they don't know exactly how much it is) don't actually understand it either. The BoE have perfected the art of selling assets at the bottom price. Back in 2021 they were confident that UK inflation was 'transitory'. 

Are you suggesting that they should have foreseen the Ukraine/Russia conflict?  Forecasting is a rolling exercise. Updated every month as the future unfolds. Data driven.  Hindsight is of course an exact science. Unarguable. 

Are you saying that the Ukraine/Russia conflict caused the huge global inflation spike? And not countries around the world 'printing' money and handing a lot of it out directly to the population when there wasn't an awful lot to spend it on, and economies re-opening broadly at the same time after unprecedented economic lockdowns causing a massive demand/supply mismatch? I can't believe some people are still buying into the propaganda that it was Russia wot dun it.

The price of oil and gas jumped after the invasion of Ukraine. 
Again, not qualified but to me the war did cause the huge global inflation spike or at the very least played a large part in it. 

Also Russia and Belarus account for around a third of global nitrogen supplies. 

Between those 2 things, food production and production in general caused a spike in manufacturing costs which has a knock on effect on everything. 

Are we allowed to say 'Liz Truss'?

sevenhills

ACG said:

The price of oil and gas jumped after the invasion of Ukraine. 
Again, not qualified but to me the war did cause the huge global inflation spike or at the very least played a large part in it. 

Also Russia and Belarus account for around a third of global nitrogen supplies. 

Between those 2 things, food production and production in general caused a spike in manufacturing costs which has a knock on effect on everything. 

Since every country has different inflation rates, perhaps the factors causing inflation are many and varied.

UK M1 money supply peaked in mid-2022, once it was on its way down inflation was certain to fall.