The reality is that interest rates need to rise even further to combat inflation
Inflation is 10% and wages are up 6%. Yes, interest rates are rising but most people with big mortgages are seeing their debt deflate. Short term it might be hard but if you can hold on, medium to long term, their mortgages are being paid off.
With inflation the level it is, most will look back and laugh at the level of debt in a decade. The same way you hear about how your parents had a £18k mortgage.
Some comments in the thread about returning to historic rates. That’s fair enough and a reasonable expectation… As long as house prices drop in the same manner
Does anyone forsee this?
The other issue is if you fix you are financially screwed too if you want to move during the period. Of course you think you won’t but what if you get ill, new job offer, family reasons, awful neighbours. It’s a gamble. Did a three year fix started in April and feels like such lucky timing. Will this be normal by 2025?!
I fixed at 4.14% for a decade six days before Kwarti crashed the pound and I still have nightmares about it because at the time I had to strongly fight my ADHD “eh I’ll do it next week” impulse and booked the appointment with my advisor on a whim. :S
And I was called an idiot for getting a 10 year fix 🙂
It seems like everyone in this thread is ignoring the obvious primary cause of inflation: externalities. Worldwide, inflation is driving up costs and raising interest rates, changing fiscal policy, or doing really anything has nearly zero effect. There are about 15 things driving up costs right now, but the end of globalization is the primary one. Then you have Brexit, Russia, the isolation of Belarus (and their worldwide supply of potash), food shortage, and climate change putting pressure on food supply.
The Tories, Labour, and political forces have no control over this. The US inflation rate is a little higher (10.1 I think), Canadian is higher, Germany, China, Japan, etc.
Do you honestly think that any political party can do any thing to prevent 10% inflation or even move the needle a little? This is the new norm peeps. And the UK just has to weather the storm.. it cannot influence or change it at all.
As someone who recently got a letter for my bank about my mortgage, yeah they’re about right.
I got so lucky here, I fixed at 1.69% for 5 years, That was just under a year ago, And if I overpay I can pay off the balance by the time the fixed rate ends.
​
I have been looking at moving though but just now it seems like house prices are crazy and mortgages are really high, So will wait and reassess every 6 months or so.
​
To me it now looks more or less impossible for an ordinary young person to buy. How long can it go on really ?
Mine is up about 250, despite 2 years of equity built up from repayments + a £4.5k lump sum we put in when we remortgaged to get a better deal.
We have way more equity than we did 2 years ago, but are paying a lot more. We’re fortunate that both my wife and I earn enough that we can handle that extra cost, but we are going to hit a wall soon of people whose fixed term deals are ending who either have to take on monthly payments they can barely afford that put them right on the limit of being homeless if they lose their jobs or have unexpected costs, or in the worst case, we’re going to see people who can’t afford the remortgage deals available and also can’t afford their current mortgages after the fixed rate period ends, and that’s when the shit is really going to hit the fan, like the US in 2008.
At that point there’ll be a feedback loop of clamping down lending criteria to avoid giving mortgages to people who might not be able to afford them in the face of rising rates, and there’ll be a huge spike in the number of people who can’t buy (on top of the already catastrophic situation for gen z who are largely already in that situation)
Is there a way to increase supply to meet demand so that the inflation comes down?
My mortgage is £370 a month, I’ve got 3.5 years left until my deal expires, then it rises to about £530 I think if I don’t get a new deal.
Would higher interest rates mean that £530 might increase? Or would it always stay the same.
Interesting. The mortgage rates were already touching 5% before the disastrous mini-budget
It’s not an exclusively Tory thing. This is a trend across the globe in many countries. In every continent we’re seeing the same thing.
Doesn’t matter which political views they have.
Fuck this Gov, but interest rates can’t stay at 0% forever lol
Don’t leverage debt that you can’t afford a rate hike on
so, labour has announced plans to build houses at the rate needed to house people?
Why does the USA have the same inflation rates? With mortgages at the same rate?
Did they crash their economy in line with ours?
Enough is enough.
This Tory party have ruined the country.
Whether that be from the extreme Austerity countries such as the US warned against, the self inflicted wound of Brexit drastically reducing our economic output or the recent give away of money to their Billionaires mates which has again crippled the economy.
And now, whilst people are worried about energy cuts, cost of feeding themselves and their kids, the ambulance waiting times, their mortgage payments what are the Tory party doing??
Deciding on which clown to inflict on us with another leadership election…
Enough is enough.
No one voted for Liz, no one has voted for whatever scumbag they will inflict on us next week.
Enough is enough.
We need a general election now. 2 years is too long to let this bunch of clowns ruin the country any more.
Any advice on how to organise a March on London is welcome.
Not far off, my remortgage at current % due in 2 years is £300 more
This is exactly my experience, how horrible to be the average man or woman on the street 😕
thankfully locked in till 2026. Will try pay as much as I can by then but genuinely worried about when the fixed rate ends
There goes any chance of me ever owning my own home
I wish Labour would not do stuff like this.
Its based on the average house price.
So yeah base don the average house price its gone up.
What i’d like to know is from folk who have a mortage around the £700 pound a month mark is did it really jump to £1300 per month?
My rent just doubled…. I’m a single parent and I earn more than average, but I do two jobs, have to pay for two london rooms (child in secondary school) and the only way to make this cheaper is move away from everything I know. Only bright side to this is landlord was going to sell his house so we were going to be evicted, but now the mortgage rates have gone up no one wants to buy. So at least we still get to live here… at twice the price *cries
My rent just doubled…. I’m a single parent and I earn more than average, but I do two jobs, have to pay for two london rooms (child in secondary school) and the only way to make this cheaper is move away from everything I know. Only bright side to this is landlord was going to sell his house so we were going to be evicted, but now the mortgage rates have gone up no one wants to buy. So at least we still get to live here… at twice the price *cries. – a single parent gets benefits if they don’t work. But shouldn’t they get a tax break seeing as they have to look after and pay for twice the rent as their children grow? Just like single people get a council tax break? I guess not, just the rich then.
25 comments
The reality is that interest rates need to rise even further to combat inflation
Inflation is 10% and wages are up 6%. Yes, interest rates are rising but most people with big mortgages are seeing their debt deflate. Short term it might be hard but if you can hold on, medium to long term, their mortgages are being paid off.
With inflation the level it is, most will look back and laugh at the level of debt in a decade. The same way you hear about how your parents had a £18k mortgage.
Some comments in the thread about returning to historic rates. That’s fair enough and a reasonable expectation… As long as house prices drop in the same manner
Does anyone forsee this?
The other issue is if you fix you are financially screwed too if you want to move during the period. Of course you think you won’t but what if you get ill, new job offer, family reasons, awful neighbours. It’s a gamble. Did a three year fix started in April and feels like such lucky timing. Will this be normal by 2025?!
I fixed at 4.14% for a decade six days before Kwarti crashed the pound and I still have nightmares about it because at the time I had to strongly fight my ADHD “eh I’ll do it next week” impulse and booked the appointment with my advisor on a whim. :S
And I was called an idiot for getting a 10 year fix 🙂
It seems like everyone in this thread is ignoring the obvious primary cause of inflation: externalities. Worldwide, inflation is driving up costs and raising interest rates, changing fiscal policy, or doing really anything has nearly zero effect. There are about 15 things driving up costs right now, but the end of globalization is the primary one. Then you have Brexit, Russia, the isolation of Belarus (and their worldwide supply of potash), food shortage, and climate change putting pressure on food supply.
The Tories, Labour, and political forces have no control over this. The US inflation rate is a little higher (10.1 I think), Canadian is higher, Germany, China, Japan, etc.
Do you honestly think that any political party can do any thing to prevent 10% inflation or even move the needle a little? This is the new norm peeps. And the UK just has to weather the storm.. it cannot influence or change it at all.
As someone who recently got a letter for my bank about my mortgage, yeah they’re about right.
I got so lucky here, I fixed at 1.69% for 5 years, That was just under a year ago, And if I overpay I can pay off the balance by the time the fixed rate ends.
​
I have been looking at moving though but just now it seems like house prices are crazy and mortgages are really high, So will wait and reassess every 6 months or so.
​
To me it now looks more or less impossible for an ordinary young person to buy. How long can it go on really ?
Mine is up about 250, despite 2 years of equity built up from repayments + a £4.5k lump sum we put in when we remortgaged to get a better deal.
We have way more equity than we did 2 years ago, but are paying a lot more. We’re fortunate that both my wife and I earn enough that we can handle that extra cost, but we are going to hit a wall soon of people whose fixed term deals are ending who either have to take on monthly payments they can barely afford that put them right on the limit of being homeless if they lose their jobs or have unexpected costs, or in the worst case, we’re going to see people who can’t afford the remortgage deals available and also can’t afford their current mortgages after the fixed rate period ends, and that’s when the shit is really going to hit the fan, like the US in 2008.
At that point there’ll be a feedback loop of clamping down lending criteria to avoid giving mortgages to people who might not be able to afford them in the face of rising rates, and there’ll be a huge spike in the number of people who can’t buy (on top of the already catastrophic situation for gen z who are largely already in that situation)
Is there a way to increase supply to meet demand so that the inflation comes down?
My mortgage is £370 a month, I’ve got 3.5 years left until my deal expires, then it rises to about £530 I think if I don’t get a new deal.
Would higher interest rates mean that £530 might increase? Or would it always stay the same.
Interesting. The mortgage rates were already touching 5% before the disastrous mini-budget
It’s not an exclusively Tory thing. This is a trend across the globe in many countries. In every continent we’re seeing the same thing.
Doesn’t matter which political views they have.
Fuck this Gov, but interest rates can’t stay at 0% forever lol
Don’t leverage debt that you can’t afford a rate hike on
so, labour has announced plans to build houses at the rate needed to house people?
Why does the USA have the same inflation rates? With mortgages at the same rate?
Did they crash their economy in line with ours?
Enough is enough.
This Tory party have ruined the country.
Whether that be from the extreme Austerity countries such as the US warned against, the self inflicted wound of Brexit drastically reducing our economic output or the recent give away of money to their Billionaires mates which has again crippled the economy.
And now, whilst people are worried about energy cuts, cost of feeding themselves and their kids, the ambulance waiting times, their mortgage payments what are the Tory party doing??
Deciding on which clown to inflict on us with another leadership election…
Enough is enough.
No one voted for Liz, no one has voted for whatever scumbag they will inflict on us next week.
Enough is enough.
We need a general election now. 2 years is too long to let this bunch of clowns ruin the country any more.
Any advice on how to organise a March on London is welcome.
Not far off, my remortgage at current % due in 2 years is £300 more
This is exactly my experience, how horrible to be the average man or woman on the street 😕
thankfully locked in till 2026. Will try pay as much as I can by then but genuinely worried about when the fixed rate ends
There goes any chance of me ever owning my own home
I wish Labour would not do stuff like this.
Its based on the average house price.
So yeah base don the average house price its gone up.
What i’d like to know is from folk who have a mortage around the £700 pound a month mark is did it really jump to £1300 per month?
My rent just doubled…. I’m a single parent and I earn more than average, but I do two jobs, have to pay for two london rooms (child in secondary school) and the only way to make this cheaper is move away from everything I know. Only bright side to this is landlord was going to sell his house so we were going to be evicted, but now the mortgage rates have gone up no one wants to buy. So at least we still get to live here… at twice the price *cries
My rent just doubled…. I’m a single parent and I earn more than average, but I do two jobs, have to pay for two london rooms (child in secondary school) and the only way to make this cheaper is move away from everything I know. Only bright side to this is landlord was going to sell his house so we were going to be evicted, but now the mortgage rates have gone up no one wants to buy. So at least we still get to live here… at twice the price *cries. – a single parent gets benefits if they don’t work. But shouldn’t they get a tax break seeing as they have to look after and pay for twice the rent as their children grow? Just like single people get a council tax break? I guess not, just the rich then.