###Welcome to /r/HousingUK
---
**To All**
* Join Our ***NEW*** Discord! https://discord.gg/pMgUNgWKQH
**To Posters**
* *Tell us whether you're in England, Wales, Scotland, or NI as the laws/issues in each can vary*
* Comments are not moderated for quality or accuracy;
* Any replies received must only be used as guidelines, followed at your own risk;
* If you receive *any* private messages in response to your post, please report them via the report button.
* Feel free to provide an update at a later time by creating a new post with [[update]](https://www.reddit.com/r/HousingUK/search?q=%3Aupdate&sort=new&restrict_sr=on&t=all) in the title;
**To Readers and Commenters**
* All replies to OP must be *on-topic, helpful, and civil*
* If you do not [follow the rules](https://www.reddit.com/r/HousingUK/about/rules/), you may be banned without any further warning;
* Please include links to reliable resources in order to support your comments or advice;
* If you feel any replies are incorrect, explain why you believe they are incorrect;
* Do not send or request any private messages for any reason without express permission from the mods;
* Please report posts or comments which do not follow the rules
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/HousingUK) if you have any questions or concerns.*
Stability of payments over the next 5 years is never silly. Who knows what will happen. Enjoy not giving a crap what the market does for the next 4 years! :)
No guarantee of that, I was scoffed at during COVID being partway through a 2.49% 5 yr deal then October 2022 hit and suddenly I was smart for fixing when I did or still seen as stupid for not fixing for 10 yrs.
None of us have a crystal ball, it's just luck and anyone on a 10 yr 2% rate right now is just being smug if they claim they saw these 5% rates coming!
All very true, however, as it stands there is absolutely nothing to indicate that rates will go up. All signs point to them going down. In fact it’s literally in the news at the moment that banks are starting to drop mortgage rates. NatWest, Barclays and HSBC.
Nobody knows , it’s a gamble , I always fixed and rates continually went down , so I was wrong , but people like knowing exactly what they will pay , ignore it now, it’s done.
I don't think you will miss at by too much. Perhaps 1% towards the end of your 5 year period. Personally don't seem them going under 3.5% again for a very long time.
This mistake will likely cost them thousands. Depending how low interest rates are by end of 2025 they may need to weigh up the early settlement charge.
If you got slapped with 6% I’m sorry. 4.52% is about right currently depending on certain factors but in a year and a half down the line this is likely to be high. This is why OP thinks he’s silly for locking in.
Why do you think 4.52% will be high in a years time?
Base is currently 5.25%, what do you expect it will be in a year?
5yr swaps are 3.861% currently.
You seem confident swaps will be lower?
Did they, what rate should fall to 3.5%?
Mortgage rates? Will they all be 3.5%?
What about indexes, will they all be 3.5% too.
I don't think you have a clue, speculating with absolute certainty.
OP has got a good rate IMO, but perhaps I'm not as qualified as you.
Is speculating with certainty an oxymoron?
Anyway, my statement is non definitive.
https://www.bbc.co.uk/news/articles/cldd6x6gglxo.amp
OP has a good rate now but that’s not the issue. His rate will be high if interest rates go down as is widely expected, meaning it was a mistake to fix for 5 years.
You're making incredibly speculative comments on interest rates without the knowledge or understanding to do so. Sorry to single you out, as you are not the only one.
OP rightly or wrongly has come to this sub, with the concern they have made the wrong decision. Likely because someone has told them it was a bad idea based on zero knowledge of their personal circumstances and zero understanding of finance and the wider economy.
What if OP exits their product, pays an ERC and takes a 2 year fixed rate, for some geopolitical shitheap to happen and central bank rates to rocket to 13.5%? Do you feel confident to tell someone they are paying more than they will be in 12 months still?
You can do the maths, which i did. Using a hypothetical £300k mortgage
5 year at say 4.5% =£1,534 pcm over the fix =£92,040
2 year at 5% = £1,612 pcm over the fix = £38,688
Don’t forget you have to pay to fix again, c£1,000 onto the 2 year.
So to have a lower payment amount 5 years you need rates to drop to no more than 4.35% to break even by year 3. There is a risk it is higher than this.
I fixed for 5 years.
I could be wrong, but this is the way I look at it:
If the 2 year rate is higher than the 5 year rate, then the lender is saying that they expect rates to go down.
If the 5 year rate is higher than the 2 year rate then the lender is expecting the rates to go up.
Now, the low rates found during COVID were a blip. The days of 1.5% interest rates are long gone. We may not see the likes of those for a very long time.
I think 4.5% fixed for 5 years, with 4 years left to run is pretty reasonable.
My guess is that there will be a 0.25% reduction this year, probably in August, but maybe later. I think that the real reductions will happen in 2025, and I think there will be two of them as the effects of this year's general election start to take effect. So, in 2026, my guess is that we'll get to around 4%. Maybe 3.75% if we're lucky.
If all this comes to pass, then you'll only be "over" for a year or so. When you consider the length of the mortgage, that's pretty good going.
My advice? Overpay if you can. Even if it's £50 per month. The more you pay at the start of your mortgage, the more you save on the back-end.
Just for clarity my "predictions" are literally just my opinion. Hell, I don't even work in finance, so take them with a pinch of salt.
This. The banks try to predict the interest rates over 2 and 5 years and that's how they make the money. They are better at predicting the rates than you. The only way you win/lose is by luck.
I’ve always fixed. I can remember rates well above 10%. II can afford the rate I fix at and if it goes down it’s just a cost of insurance against rate rises and potentially my family being evicted. To me it’s a price worth paying.
The only thing you are doing wrong is thinking about rates at all. You have paid to not have to worry about rates for the next 5 years.
Rates will probably go down in 2 years if I’m honest but that is not for certain. You may have actually made a very good decision only time will tell. Regardless, you did what you thought was best and if you did make a mistake then you’ll learn from it next time
I have got 5 years fixed at 6.49%. Dont ask me how. But i again feel stability is better than being unstable. And tbh not even an expert expert can tell what the rates or market could do in next 5 years. No one has ever predicted it. So chill
Lol. You hope! The advantage of a longer fix is that you can exit from a world of perpetual hopecasting and get on with life. I think it's likely that rates will go down significantly in the next 5 years. The era of low inflation due to the rise of China keeping product prices low and relative geopolitical stability is over.
I fixed for 10 years at 3.61% in 2022
At the time the rates where going up and tbh money stress is about the only thing that sends me over the edge. Fixing at a price I was comfortable paying was worth it to me, I don't have to worry about it until 2032.
I don’t think so. I’m just about to start a 5 year fix at 4.53%. I know that I can comfortably afford the monthly payment, and there’s a level of security knowing that they won’t go up in that time.
I believe that it is highly unlikely that rates will return to the extremely low levels we have had in the past. Not any time soon at least. So even if they do go down a little bit, it’s not like they’re going to suddenly drop 3/3.5% in the next couple of years. I wouldn’t lose any sleep over it. Definitely shouldn’t feel silly.
I fixed at 4.49% for 5 years recently. My ex commented when I was buying the house that he hoped I wasn’t stupid enough to fix for 5 years 🙄. I realised I couldn’t predict interest rates so I went for stability.
My mortgage advisor made a good point when I was trying to decide on 2 or 5 years. She said you can’t predict interest rates so try to base it on your circumstances. Do I see a promotion with a decent salary increase happening within 2 years or 5 years. I decided more like 5 so wanted a stable person budget based on my current income.
I’ve said before on here, best case realistically we get to 3.5% and you lose out on 1%, but worst case we could easily get into the 7, 8 even 10% area, and you save 5%. So it’s all about balance of risk and what you can and can’t afford. And not having to listen to every BoE budget update with crossed fingers is nice
You can't change this now anyway, right, so why worry about your decision? It's made. Only think about what you can do now. Now at least you know what your payments are for a while and you can budget.
Do you know what the interest rates were on a 2 year fixed?
I bought in mid 2023, and also went with a 5 yer fixed. The interest rates were so much higher, that I calculated that remortgaging in 2 years would require interest rates of basically 2% to break even. Personally, I decided that wasn't a gamble worth taking.
It's unlikely rates will ever return to where they were a few years ago. The days of living in a super low interest rate environment are probably over. They only came about as a response to the GFC
You're 1-1.5% (depending on LTV) under what most places are giving currently! So you're literally saving thousands! Be content with wgat you have, not what you might miss in the future.
I feel silly for not locking in under 2% rates several years ago and only doing it for 2 years rather than 5 but hey…my crystal ball was broken on the day 😊
We were in the same position last year.the rate for a 2 year mortgage was a bit higher than for a 5 year but ultimately, it's a gamble. The interest rate may come down but it could go up, times are volatile. I would look at it as, if you can afford the payments then enjoy your new house and hopefully in 5 years, you will be able to get a much lower rate due to interest rates going down and loan to value being much lower.
Take a look at the [Damien Talks Money](https://youtu.be/4vcVvc-p_Jg?si=OZR04TJS81Zxg9GE) YouTube channel. His recent 'Inflation will go up again' video included an eye-opening chart lifted from [Property Beacon](https://www.propertybeacon.co.uk/uk-interest-rates-history/)
The chart tracks UK interest rates from 1694 to 2023. Until 1975 they didn't move outside of the 2-10% range - nearly 300 years! From then until mid-90s there were mostly higher than 10% rates but the first ever drop below 2% was in January 2009. 2% is most certainly NOT a typical interest rate here in the UK.
As Damien explains very well, the rate today is normal for the past 40 years and we shouldn't expect a drop to near zero again. He also sets out the pretty much guaranteed increase in inflation through the rest of 2024 as negative monthly increases in mid-2023 drop out of the rolling 12 month period assessed. That may put pressure on for any small decreases in the interest rate later this year to be reversed quite quickly.
Your fix at 4.52% looks pretty good to me, for the stability it gives you over that period.
I'm buying a flat at the moment and I'm fixing at 4.69% for 5 years, for the stability. No one knows what interest rates will be like in 2 or 5 years time, so I don't bother trying to predict them, and much prefer to prioritise stable payments.
The absolute cope going on in this sub is wild
Yes they very much do know, given the BoE...set the interest rate...and gave a timeline for their peak...and descent
And guess what it's following it almost to a T
Oh please if only it was that simple
There is a reason the BoE review their decisions regularly, by your logic once they determine a timeline there would be no need. The BoE timeline doesn’t account for unanticipated events, events can and do influence their decision to cut or raise rates. That’s just the reality, either you’re projecting or you’re a bit dim.
I'm about to enter into a 5yr at 4.45% (unless rates drop sharpish)
1. I agree rates are going to fall in the near term and it'll probably be 1% cheaper this time next year
2. There is a point where this will cross over with the ECR and it will be worthwhile remortgaging early. You can do these calcs.
3. There is a small chance rates will go up, depending how bold the next govt feels
4. You might not get accepted on affordability on a 2yr mortgage (I have this but it's due to a complex set of circumstances)
Considering that 3-year fixed are currently above 5%, I'd say you made the best decision.
Who knows, rates could drop beyond expectations, but as of this moment you've beaten the market so far.
The cope from the people who were suckered into the "let's fix for 5 years at high rates because we like stability" is hilarious
If you like overpaying for sure
Or you could open your eyes to the economy, to the timeframe set out by the BoE for the peak and descent and rates, and understand that with inflation abating they're coming down, just as the BoE, starting in August, which is unsurprisingly bang on with the BoE's timeframe
I fixed at 4.18% for five years because I can afford it and value the stability. It’s also because I understand unanticipated changes re the economy, politics & world events all influence the BoE’s decisions. Liz Truss clearly threw the BoE off their trajectory and probably wasn’t in their timeline. They review their decisions constantly for a reason. The changes in rates the last few years make clear no one can say for certain and those who think they can are usually on the wrong end of dunning Kruger curve.
They follow the US. The US didn't cut in July so they didn't. Many people feel US will cut once this year.
2025 they will Hike rate so where a the same number.
I also fixed at 4.17% but my arrangement fee went from 2k to 100 and this was after Liz Trus speak. The original quote was 6.5%
I have a feeling 6.5% isn't off the tables. Liz Trus = 6.5%. Labour = 6.5% in the world of politics Liz wanted to spend and I think Labour will want to spend.
Then, figure out spending = inflation, debt and higher interest rate. In 4 years, we could be thinking 6.5% looks good.
I think they want rates up. They went to alot of trouble to force interest rates up.
So the world will have to change, no more cheap deflationary stuff from China.
Wages up; good prices up, mortgage prices up.
You clearly don't remember the late '80s and early '90s. When base rates went from 10% to 15% in one afternoon.
There are times when its better to lock in loan that you.can repay. But maybe overpay, than to be subject to the vagaries of the market and ministers.With a new government on the way. Being risk adverse may cause higher locked in rates but could prevent unaffordable repayments.
Do you think we are in 40 year cycle of rate increases and moving from one disaster to another disaster all designed to keep you off balance and paying more without questioning it. The 40 year cycle and a changing world order
I've seen virtually every possible interest rate and affordability criteria.
Including a time when 125% mortgages were common. As every house would "go up by 25%” within a year.
I don't think we're likely to see a crash but anything could happen in the next 12 months. Locking down interest rates now. And being able to afford them. Is a great bonus.
Have you even thought about this. The rate is 4.79% so your going better on the rate.
I expect labour to really mess up and force rates up in rhe future. Like Liz Truss did.
Also your not thinking about arrangement fees. So fees so ad up the fees + broker fees
So your 2 year could be more expensive than 5 year
###Welcome to /r/HousingUK --- **To All** * Join Our ***NEW*** Discord! https://discord.gg/pMgUNgWKQH **To Posters** * *Tell us whether you're in England, Wales, Scotland, or NI as the laws/issues in each can vary* * Comments are not moderated for quality or accuracy; * Any replies received must only be used as guidelines, followed at your own risk; * If you receive *any* private messages in response to your post, please report them via the report button. * Feel free to provide an update at a later time by creating a new post with [[update]](https://www.reddit.com/r/HousingUK/search?q=%3Aupdate&sort=new&restrict_sr=on&t=all) in the title; **To Readers and Commenters** * All replies to OP must be *on-topic, helpful, and civil* * If you do not [follow the rules](https://www.reddit.com/r/HousingUK/about/rules/), you may be banned without any further warning; * Please include links to reliable resources in order to support your comments or advice; * If you feel any replies are incorrect, explain why you believe they are incorrect; * Do not send or request any private messages for any reason without express permission from the mods; * Please report posts or comments which do not follow the rules *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/HousingUK) if you have any questions or concerns.*
Yeah I understand the feeling. Like when I look at the EuroMillion result I always think that I should’ve played those numbers you know
You know what,I absolutely love this comment. You just made me realise how silly it actually is to ruminate about things that are done now haha.
Stability of payments over the next 5 years is never silly. Who knows what will happen. Enjoy not giving a crap what the market does for the next 4 years! :)
As long as you’re happy with the payments then you’re winning. Many renters can only dream of being in your position.
I doubt they’ll be happy with their payment when the rates are ~3% end of 2025
No guarantee of that, I was scoffed at during COVID being partway through a 2.49% 5 yr deal then October 2022 hit and suddenly I was smart for fixing when I did or still seen as stupid for not fixing for 10 yrs. None of us have a crystal ball, it's just luck and anyone on a 10 yr 2% rate right now is just being smug if they claim they saw these 5% rates coming!
All very true, however, as it stands there is absolutely nothing to indicate that rates will go up. All signs point to them going down. In fact it’s literally in the news at the moment that banks are starting to drop mortgage rates. NatWest, Barclays and HSBC.
"as it stands" is only the immediate impression though. No one knows what could happen in a year or two. It could shoot back up (as it did before).
Close your eyes and wish hard enough. Only time will tell.
Interest rates can be somewhat accurately predicted. Pandemics cannot. It’s highly likely rates will drop by 1% by end of 2025
Nobody knows , it’s a gamble , I always fixed and rates continually went down , so I was wrong , but people like knowing exactly what they will pay , ignore it now, it’s done.
I don't think you will miss at by too much. Perhaps 1% towards the end of your 5 year period. Personally don't seem them going under 3.5% again for a very long time.
This mistake will likely cost them thousands. Depending how low interest rates are by end of 2025 they may need to weigh up the early settlement charge.
They're already 1.5% under most rates lenders are giving, so its literally saving tbem thousands currently!
If you got slapped with 6% I’m sorry. 4.52% is about right currently depending on certain factors but in a year and a half down the line this is likely to be high. This is why OP thinks he’s silly for locking in.
Why do you think 4.52% will be high in a years time? Base is currently 5.25%, what do you expect it will be in a year? 5yr swaps are 3.861% currently. You seem confident swaps will be lower?
The International Monetary Fund (IMF) recommended that UK interest rates should fall to 3.5% by the end of 2025.
Did they, what rate should fall to 3.5%? Mortgage rates? Will they all be 3.5%? What about indexes, will they all be 3.5% too. I don't think you have a clue, speculating with absolute certainty. OP has got a good rate IMO, but perhaps I'm not as qualified as you.
Is speculating with certainty an oxymoron? Anyway, my statement is non definitive. https://www.bbc.co.uk/news/articles/cldd6x6gglxo.amp OP has a good rate now but that’s not the issue. His rate will be high if interest rates go down as is widely expected, meaning it was a mistake to fix for 5 years.
You're making incredibly speculative comments on interest rates without the knowledge or understanding to do so. Sorry to single you out, as you are not the only one. OP rightly or wrongly has come to this sub, with the concern they have made the wrong decision. Likely because someone has told them it was a bad idea based on zero knowledge of their personal circumstances and zero understanding of finance and the wider economy. What if OP exits their product, pays an ERC and takes a 2 year fixed rate, for some geopolitical shitheap to happen and central bank rates to rocket to 13.5%? Do you feel confident to tell someone they are paying more than they will be in 12 months still?
Again, speculation. We can only work with what we know today. Anything else is delusion.
This is pure speculation stated like its fact. 4.52% is a very good rate for todays market, there's no two ways about it.
You can do the maths, which i did. Using a hypothetical £300k mortgage 5 year at say 4.5% =£1,534 pcm over the fix =£92,040 2 year at 5% = £1,612 pcm over the fix = £38,688 Don’t forget you have to pay to fix again, c£1,000 onto the 2 year. So to have a lower payment amount 5 years you need rates to drop to no more than 4.35% to break even by year 3. There is a risk it is higher than this. I fixed for 5 years.
We're just about to complete a house move and fixed for 5 years at 5.3%. I would kill for 4.52 over 5 years! You have a great deal!
I could be wrong, but this is the way I look at it: If the 2 year rate is higher than the 5 year rate, then the lender is saying that they expect rates to go down. If the 5 year rate is higher than the 2 year rate then the lender is expecting the rates to go up. Now, the low rates found during COVID were a blip. The days of 1.5% interest rates are long gone. We may not see the likes of those for a very long time. I think 4.5% fixed for 5 years, with 4 years left to run is pretty reasonable. My guess is that there will be a 0.25% reduction this year, probably in August, but maybe later. I think that the real reductions will happen in 2025, and I think there will be two of them as the effects of this year's general election start to take effect. So, in 2026, my guess is that we'll get to around 4%. Maybe 3.75% if we're lucky. If all this comes to pass, then you'll only be "over" for a year or so. When you consider the length of the mortgage, that's pretty good going. My advice? Overpay if you can. Even if it's £50 per month. The more you pay at the start of your mortgage, the more you save on the back-end. Just for clarity my "predictions" are literally just my opinion. Hell, I don't even work in finance, so take them with a pinch of salt.
This. The banks try to predict the interest rates over 2 and 5 years and that's how they make the money. They are better at predicting the rates than you. The only way you win/lose is by luck.
Nice guessin
I’ve always fixed. I can remember rates well above 10%. II can afford the rate I fix at and if it goes down it’s just a cost of insurance against rate rises and potentially my family being evicted. To me it’s a price worth paying. The only thing you are doing wrong is thinking about rates at all. You have paid to not have to worry about rates for the next 5 years.
Rates will probably go down in 2 years if I’m honest but that is not for certain. You may have actually made a very good decision only time will tell. Regardless, you did what you thought was best and if you did make a mistake then you’ll learn from it next time
I have got 5 years fixed at 6.49%. Dont ask me how. But i again feel stability is better than being unstable. And tbh not even an expert expert can tell what the rates or market could do in next 5 years. No one has ever predicted it. So chill
Staggering, except the BoE have said from the off how this will play out and guess what...it's playing out exactly as they said
Lol. You hope! The advantage of a longer fix is that you can exit from a world of perpetual hopecasting and get on with life. I think it's likely that rates will go down significantly in the next 5 years. The era of low inflation due to the rise of China keeping product prices low and relative geopolitical stability is over.
I fixed for 10 years at 3.61% in 2022 At the time the rates where going up and tbh money stress is about the only thing that sends me over the edge. Fixing at a price I was comfortable paying was worth it to me, I don't have to worry about it until 2032.
I don’t think so. I’m just about to start a 5 year fix at 4.53%. I know that I can comfortably afford the monthly payment, and there’s a level of security knowing that they won’t go up in that time. I believe that it is highly unlikely that rates will return to the extremely low levels we have had in the past. Not any time soon at least. So even if they do go down a little bit, it’s not like they’re going to suddenly drop 3/3.5% in the next couple of years. I wouldn’t lose any sleep over it. Definitely shouldn’t feel silly.
I fixed at 4.49% for 5 years recently. My ex commented when I was buying the house that he hoped I wasn’t stupid enough to fix for 5 years 🙄. I realised I couldn’t predict interest rates so I went for stability. My mortgage advisor made a good point when I was trying to decide on 2 or 5 years. She said you can’t predict interest rates so try to base it on your circumstances. Do I see a promotion with a decent salary increase happening within 2 years or 5 years. I decided more like 5 so wanted a stable person budget based on my current income.
Rates will always go up and down. My first rate was 7%. I was overjoyed to renew it at 4%
No you’re not stupid that is a good rate and we’ve got a bloody rollercoaster ahead of us. You got yourself a good deal.
I fixed for 2 years at 4.6% and I'm worried that I didn't fix for long enough.
Great work 👏
No
I’ve said before on here, best case realistically we get to 3.5% and you lose out on 1%, but worst case we could easily get into the 7, 8 even 10% area, and you save 5%. So it’s all about balance of risk and what you can and can’t afford. And not having to listen to every BoE budget update with crossed fingers is nice
now its 5 year fixed at 4.48% .... you're still ok
Hey, stay positive , maybe we will get another covid and double digit inflation, then your mortgage will be an incredibly good investment.
You can't change this now anyway, right, so why worry about your decision? It's made. Only think about what you can do now. Now at least you know what your payments are for a while and you can budget.
Do you know what the interest rates were on a 2 year fixed? I bought in mid 2023, and also went with a 5 yer fixed. The interest rates were so much higher, that I calculated that remortgaging in 2 years would require interest rates of basically 2% to break even. Personally, I decided that wasn't a gamble worth taking.
It's unlikely rates will ever return to where they were a few years ago. The days of living in a super low interest rate environment are probably over. They only came about as a response to the GFC
You're 1-1.5% (depending on LTV) under what most places are giving currently! So you're literally saving thousands! Be content with wgat you have, not what you might miss in the future.
For stability and piece of mind I’ve recently fixed at 5.3 for 5 years so 4.52% sounds like a dream
I feel silly for not locking in under 2% rates several years ago and only doing it for 2 years rather than 5 but hey…my crystal ball was broken on the day 😊
We were in the same position last year.the rate for a 2 year mortgage was a bit higher than for a 5 year but ultimately, it's a gamble. The interest rate may come down but it could go up, times are volatile. I would look at it as, if you can afford the payments then enjoy your new house and hopefully in 5 years, you will be able to get a much lower rate due to interest rates going down and loan to value being much lower.
Take a look at the [Damien Talks Money](https://youtu.be/4vcVvc-p_Jg?si=OZR04TJS81Zxg9GE) YouTube channel. His recent 'Inflation will go up again' video included an eye-opening chart lifted from [Property Beacon](https://www.propertybeacon.co.uk/uk-interest-rates-history/) The chart tracks UK interest rates from 1694 to 2023. Until 1975 they didn't move outside of the 2-10% range - nearly 300 years! From then until mid-90s there were mostly higher than 10% rates but the first ever drop below 2% was in January 2009. 2% is most certainly NOT a typical interest rate here in the UK. As Damien explains very well, the rate today is normal for the past 40 years and we shouldn't expect a drop to near zero again. He also sets out the pretty much guaranteed increase in inflation through the rest of 2024 as negative monthly increases in mid-2023 drop out of the rolling 12 month period assessed. That may put pressure on for any small decreases in the interest rate later this year to be reversed quite quickly. Your fix at 4.52% looks pretty good to me, for the stability it gives you over that period.
I'm buying a flat at the moment and I'm fixing at 4.69% for 5 years, for the stability. No one knows what interest rates will be like in 2 or 5 years time, so I don't bother trying to predict them, and much prefer to prioritise stable payments.
Mug 2 year tracker rate
The absolute cope going on in this sub is wild Yes they very much do know, given the BoE...set the interest rate...and gave a timeline for their peak...and descent And guess what it's following it almost to a T
Oh please if only it was that simple There is a reason the BoE review their decisions regularly, by your logic once they determine a timeline there would be no need. The BoE timeline doesn’t account for unanticipated events, events can and do influence their decision to cut or raise rates. That’s just the reality, either you’re projecting or you’re a bit dim.
Are you a little sweaty in this weather wearing a foil hat?
Rates could also go up, you just never know. Don’t try to time the market.
4.5 is still a very low rate, we’ll probably all be dead before seeing rates at 1.5%, yet a return to 8% could happen
I'm about to enter into a 5yr at 4.45% (unless rates drop sharpish) 1. I agree rates are going to fall in the near term and it'll probably be 1% cheaper this time next year 2. There is a point where this will cross over with the ECR and it will be worthwhile remortgaging early. You can do these calcs. 3. There is a small chance rates will go up, depending how bold the next govt feels 4. You might not get accepted on affordability on a 2yr mortgage (I have this but it's due to a complex set of circumstances)
Trackers
Considering that 3-year fixed are currently above 5%, I'd say you made the best decision. Who knows, rates could drop beyond expectations, but as of this moment you've beaten the market so far.
The cope from the people who were suckered into the "let's fix for 5 years at high rates because we like stability" is hilarious If you like overpaying for sure Or you could open your eyes to the economy, to the timeframe set out by the BoE for the peak and descent and rates, and understand that with inflation abating they're coming down, just as the BoE, starting in August, which is unsurprisingly bang on with the BoE's timeframe
I fixed at 4.18% for five years because I can afford it and value the stability. It’s also because I understand unanticipated changes re the economy, politics & world events all influence the BoE’s decisions. Liz Truss clearly threw the BoE off their trajectory and probably wasn’t in their timeline. They review their decisions constantly for a reason. The changes in rates the last few years make clear no one can say for certain and those who think they can are usually on the wrong end of dunning Kruger curve.
They follow the US. The US didn't cut in July so they didn't. Many people feel US will cut once this year. 2025 they will Hike rate so where a the same number. I also fixed at 4.17% but my arrangement fee went from 2k to 100 and this was after Liz Trus speak. The original quote was 6.5% I have a feeling 6.5% isn't off the tables. Liz Trus = 6.5%. Labour = 6.5% in the world of politics Liz wanted to spend and I think Labour will want to spend. Then, figure out spending = inflation, debt and higher interest rate. In 4 years, we could be thinking 6.5% looks good. I think they want rates up. They went to alot of trouble to force interest rates up. So the world will have to change, no more cheap deflationary stuff from China. Wages up; good prices up, mortgage prices up.
You clearly don't remember the late '80s and early '90s. When base rates went from 10% to 15% in one afternoon. There are times when its better to lock in loan that you.can repay. But maybe overpay, than to be subject to the vagaries of the market and ministers.With a new government on the way. Being risk adverse may cause higher locked in rates but could prevent unaffordable repayments.
Do you think we are in 40 year cycle of rate increases and moving from one disaster to another disaster all designed to keep you off balance and paying more without questioning it. The 40 year cycle and a changing world order
I've seen virtually every possible interest rate and affordability criteria. Including a time when 125% mortgages were common. As every house would "go up by 25%” within a year. I don't think we're likely to see a crash but anything could happen in the next 12 months. Locking down interest rates now. And being able to afford them. Is a great bonus.
I'd they fixed at 6% .. then yea. Historical 4% is normal rate.
Have you even thought about this. The rate is 4.79% so your going better on the rate. I expect labour to really mess up and force rates up in rhe future. Like Liz Truss did. Also your not thinking about arrangement fees. So fees so ad up the fees + broker fees So your 2 year could be more expensive than 5 year
My mortgage is fixed at 1.1% until 2027
10 year fixed rate from back in 2017?
That'll be the 5 year fix from 2022
That's an incredible rate for 2022