Mortgage Crisis 2022-23

[XiJ]

I am on a 2 year fix (1.4%) due to end with 10 years left, I have been advised to remortage (currently 6%) and take out 2 year fix but extend morgage to (25 or even 30years) this way still paying the same / similar for next 2 years and then when rates fall again reduce term again.

 

I’m currently moving from ‘saving’ for a car (when I paid of mine I kept paying the same I to a savings account) to over paying my mortgage

 

I hope when our five year fixed ends next year things will be better. Not convinced. Think we’ll try and extend the length to try and keep paying a similar amount as now as the above poster.

[Andrew_C]

For anyone thinking of changing their arrangements - I would strongly suggest talking to an INDEPENDENT advisor. Normally paid by the lender, but even if you pay up front, they should more than save you their fee.

 

You might also get advice on other financial issues if you choose the right one.

[BOOT]

That puts my mortgage interest rate well into double-digits now. Time to get a third job.

[BOOT]

75k @ 13.62% As a mortgage prisoner, I'm screwed.

[Ditto]

75k @ 13.62% As a mortgage prisoner, I'm screwed.

If you don't mind sharing, what is it about your circumstances that lead to such a high rate? Have you taken independent advice as recommended above - at that rate I would hope a good advisor would be able to help.

[Ditto]

 

Whilst it is easy to see political side here, please stick to the facts and avoid political statements.

I'm not an expert in these matters, but swap rates rocketed but have dropped back recently. Mortgage offers historically lag behind other interest rates.

In summary, whilst finances are seriously tough right now, it's not all doom and gloom.

[XiJ]

For anyone thinking of changing their arrangements - I would strongly suggest talking to an INDEPENDENT advisor. Normally paid by the lender, but even if you pay up front, they should more than save you their fee.

 

You might also get advice on other financial issues if you choose the right one.

 

My advisor said do nothing now and pray lol. He wasn’t really wrong tbh.

[supportman]

Just got our remortgage quote from Halifax ours from 1.74% to 5.49%. £600 increase on a 400k mortgage!

 

Ouch

 

Having said that I've been around long enough to know that the last 10 years have seen insanely low interest rates and that bubble was always going to burst.

 

No complaints really. Just a little shock to the system.

Edited November 4, 2022 by supportman

[BOOT]

If you don't mind sharing, what is it about your circumstances that lead to such a high rate? Have you taken independent advice as recommended above - at that rate I would hope a good advisor would be able to help.

It's an endowment mortgage.

Those still exist for people who's income has been so low that they can't switch mortgages.

[Simcfc73]

Our 'independant' advisor badgered me to get it sorted last week and I just thought he was being naggy... the deals now been pulled so I am on variable for a while.

 

The fixed rate was over £300 a month more than we were paying but like what's been said before... the rates were always going to rise at some point.

[Ditto]

It's an endowment mortgage.

Those still exist for people who's income has been so low that they can't switch mortgages.

I intended this to come across as constructive and I apologise in advance it it does show the right level of empathy. I had prepared a lengthy reply that reflected on 30 years of mortgage experience, including the full saga that @elsiegee40 expressed earlier in the thread. Then I reviewed some of your earlier posts to try to get a better picture of your circumstances.

 

To me, it seems clear that you need to change job and get a better salary that reflects your skill levels, which are clear from your Edugeek posts. That might be brutally blunt, and I know we can get emotional connected with our schools, but I think it needs to be said.

 

On the face of it, it's a win-win as it'll increase your income and should allow you to access a much better mortgage deal. Is their anything preventing from trying to secure that new job? As I say from the outset, that comment is meant to be constructive.

 

I can see your circumstances are very tough, but to pinch from another Edugeeker's earlier post, if you need to PM, please do. My inbox is always open and I'll help wherever I can.

Edited November 4, 2022 by Ditto

[Ditto]

Got a letter from Barclays today, although it is dated 3rd Nov. It's saying they are dropping there Standard Variable Rate (SVR) from 4.49% to 3.49% above above the BofE base rate. I was initially bemused by them sending to me as I'm on a tracker rate, but it's because it's the rate they charge if I borrow against the property as Mortgage Current Account Reserve - which I don't.

But

a) I'm not sure of their rates are in line with the market,

b) whether it's because rates are higher generally or

c) whether it indicates pressure on higher raised is easing.

 

In they letter they say the reduction is to help customers with rising living costs, so perhaps I should take that at face value.

[XiJ]

The cynic in me would say it allows them to say they’re wonderful human beings and have dropped their rates. I mean, what’s 1.5% when the rates are gonna be 10% + anyway ?!

 

I’m just switching current accounts to nationwide (free £200 - why not?). I notice then 10 year fixes are relatively good - and better than their 2 or 5 year rates. Because rates are high and they’d love everyone locking them in for 10 years.

[Ditto]

The cynic in me would say it allows them to say they’re wonderful human beings and have dropped their rates. I mean, what’s 1.5% when the rates are gonna be 10% + anyway ?!

 

I’m just switching current accounts to nationwide (free £200 - why not?). I notice then 10 year fixes are relatively good - and better than their 2 or 5 year rates. Because rates are high and they’d love everyone locking them in for 10 years.

I managed, unusually, to avoid a cynical comment, especially when you see the impact of recent rate increases on their profits. But historically those rises are countered by an increase in saver rates, and I haven't checked those. Martin Lewis would support a switch for a free £200. As for rates, not sure if Nationwide are any better at predicting future rates than anyone else, but if rates rose and stayed at higher levels, signing up for the 10 year deal would prove a good move. The additional benefit you get is stability and predictability. If rates dropped significantly in the 10 year period, it's worth knowing the costs of exiting the 10 year deal. As there 2-5 year rates are higher than the 10, it would suggest they think the higher levels are for the mid term period, but not at those levels for a decade.

[XiJ]

It’s fair to say saver rates are increasing - although still dwarfed by mortgage rates. I wasn’t particularly moving to nationwide for a remortgage - but I had a look while there. To me it’s a positive if 10 year fixed are lower than 5 years - to me it signifies that, at least, they aren’t confident they’ll stay high.

 

But if I could predict 10 year mortgage rates, I wouldn’t have to worry about my finances [emoji2]

[supportman]

Savers rates have nothing to do with mortgage rates these days, There is no link really.

 

It's all about the swap rates that banks charge each other to lend money.

 

Luckily swap rates have been coming down as there are little signs that inflation may have peaked worlwide.

[BOOT]

Another rate hike

14%

That's me done.

[Sonic007]

So would people say now is the time to fix or shoul we wait until the new year?

[supportman]

So would people say now is the time to fix or shoul we wait until the new year?

 

I've literally just fixed today after searching high and low. Just managed to get a 5 year fix at 4.5% which I'm very happy with.

 

I think its very marginal the decision to wait or fix now. I don't think it will matter much.

 

It sounds to me like rates may have peaked or at least be reaching a peak soon.

[Dos_Box]

So would people say now is the time to fix or shoul we wait until the new year?

 

TBH, with the way it is going you'd need a crystal ball. On one hand you run the risk of being stuck at a high rate if you fix now, and on the other you may just have to accept an even higher rate in the near future.

I have no idea how far this will go and I do sympathise with your position.

I'm sure others here can probably point you in the right direction of mortgage advice sites which may have a much more professional long term view.

[Andrew_C]

I'd not go to a mortgage site; if you are struggling, talk to an IFA.

[Simcfc73]

Mine has gone to variable as my fixed rate has finished. I'm going to stick it out for 12 months and see as the new fixed is hardly any difference to what I am paying.. unless it goes up another percentage.

[Roberto]

I'd not go to a mortgage site; if you are struggling, talk to an IFA.

 

Agree with this so much. I’ve used the same independent mortgage advisor for years and she is incredible. A good one will be able to look across the whole market, will find deals you never knew existed, will ask you about and understand your needs and save you a great deal of time. Oh, and money.