Current Affairs Mortgages

[ArtetaMagic]

I have a question. I've 2 years left at 1.4%, it then jumps to say 3.4% fot life of mortgage if I don't renew. Can I just sit on that 3.4%, will probably be better than any deals going. Or is that 3.4 a variable rate or something?

 

[Bruce Wayne]

But isn't that just accelerating a process of peoples homes being a revenue stream for the financial services industry?

I suppose technically you could argue that until you've fully paid off your mortgage your home is providing a revenue stream for the financial services industry anyway.

Yes very fair. I think for a time, rents have been higher than interest payments, but that is probably due to the unique environment of the last 10, and perhaps the last 20 years. We may be going into a phase where that shifts.

The housing market since 1970 has increased around 5% you and the S&P anywhere from 7-10. So it is a better investment. Or certainly was. There is an interesting caveat to say, at one point does the American Market maybe level out?

I think what owning the house does, is give you a sense of control over not being turfed out etc. Greater protections for renters would help in that regard.

A lot of he argument is though, that people dont necessarily want more money, theyd take less money and a secure place to live they had control over.

Yes, that's fair enough, and I'm sure things change significantly when you have children to think about.

 

[Martin Alvito]

I have a question. I've 2 years left at 1.4%, it then jumps to say 3.4% fot life of mortgage if I don't renew. Can I just sit on that 3.4%, will probably be better than any deals going. Or is that 3.4 a variable rate or something?

It depends, and none of us can answer the question without seeing the paperwork.

Is it possible that you have a fixed-rate mortgage with a teaser rate? Maybe. I don't even know if that's legal in the UK, personally. Could it be some sort of variable-rate with a cap? Possibly. There's usually a cap on a variable-rate first mortgage, though 2% would be a low cap in my American lending experience for the upper end (but not for a floor on the lower end).

 

[GrandOldTeam]

I have a question. I've 2 years left at 1.4%, it then jumps to say 3.4% fot life of mortgage if I don't renew. Can I just sit on that 3.4%, will probably be better than any deals going. Or is that 3.4 a variable rate or something?

Without seeing your mortgage specifics, I'm pretty certain the 3.4% will either be that lenders current 'follow on rate', or will be the assumed rate they used for calculations/illustrative purposes at point of offer (so they could demonstrate what your mortgage would cost over the full term etc)

Whenever your 1.4% expires, you'll then be on your lenders follow on rate/standard rate at that point in time.

 

[GrandOldTeam]

If anyone ever needs a mortgage broker, I used Steve Dyson. He's very good at what he does - also helps he's an Evertonian;

Service and advice you can put your house on! - Steve Dyson

Service and advice you can put your house on!If you are short of time, unsure about making the right financial decision, or you just don't have the knowledge

stevedyson.co.uk

https://twitter.com/mortgagespro

 

[LinekersLegs]

I suppose technically you could argue that until you've fully paid off your mortgage your home is providing a revenue stream for the financial services industry anyway.

Yes, that's fair enough, and I'm sure things change significantly when you have children to think about.

Not just kids - we have two cats and when we were trying to find places to rent when we first moved to the US during the dot com boom it significantly cut down the already small number of places that were available to us.

Same is true for dog owners - especially those with more than one or the larger breeds.

 

[Yarrgh]

Just got a sms from my mortgage company saying that they are experiencing high demand on their phone system. Strangely I got a letter in the morning saying that my rate went up.

 

[carolinablue232]

The only lucky ones I believe who are the ones on 5+ fixed rates agreed early this year. Everyone else will feel the pain at some point over the next 5 years.

Bought a new construction home earlier this year (closed in July) and did an early rate lock for a 30 year fixed that ended up being right around 5. Planned to refinance down the road if they went back down. Hated it when we did it given rates the prior year but when we finally closed, 5.5 was the going rate so was happy we locked in. Looked last week and it’s much worse now. Wild times. Will be interesting to see what happens with short term housing prices now as well.

 

[The binman chronicles]

I have a question. I've 2 years left at 1.4%, it then jumps to say 3.4% fot life of mortgage if I don't renew. Can I just sit on that 3.4%, will probably be better than any deals going. Or is that 3.4 a variable rate or something?

As Mr GOT himself said that will have been the SVR at the time your mortgage documents were produced. If you think back to how low the rates were at the time they are at least 2%+ above the base rate. So BoE goes to 4% then that will be 6% and so on.

 

[Tramps_mate]

I've got 2.5 years left on my 1.9% rate... Not looking forward to remortgaging!

Feel sorry for those having to remortgage in the new year!

 

[ForeverBlue92]

I've got 2.5 years left on my 1.9% rate... Not looking forward to remortgaging!

Feel sorry for those having to remortgage in the new year!

Mine ends in 12 months, if I remortgaged now for say a 3 yr fixed deal would increase my monthly payments by about £250.00.

I'm a big believer in what will be will be so will let it ride and see what the score is in 12 months.

 

[Daveysgingerlovechild]

See, interest rates were ridiculously low (historically speaking) so they always were likely to go up. Even arguably needed to. The problem is less gradual managed rises but the sheer shock pace of it.

My, very lay, sense is that it's a conundrum for Truss and Kwarteng. My understanding is that for years house prices have been drivers of GDP and growth. If the market crashes it arguably pulls a leg out from under them.

Thoughts?

 

[The binman chronicles]

See, interest rates were ridiculously low (historically speaking) so they always were likely to go up. Even arguably needed to. The problem is less gradual managed rises but the sheer shock pace of it.

My, very lay, sense is that it's a conundrum for Truss and Kwarteng. My understanding is that for years house prices have been drivers of GDP and growth. If the market crashes it arguably pulls a leg out from under them.

Thoughts?

Low interest rates have driven the housing market, borrowing for growing businesses, home improvements and over spending etc. By giving small tax cuts and forcing the rates sky high will obviously have the opposite effect.

They don't know what they're doing.

Like you say rates have been ridiculously low for years to help with the 08 financial crisis and then all the dramas since, so it needed to go back up, but they should have been 0.25/.5 a year over the last 4/5 years so people get adjusted to them in a graduated way.

 

[davids]

See, interest rates were ridiculously low (historically speaking) so they always were likely to go up. Even arguably needed to. The problem is less gradual managed rises but the sheer shock pace of it.

My, very lay, sense is that it's a conundrum for Truss and Kwarteng. My understanding is that for years house prices have been drivers of GDP and growth. If the market crashes it arguably pulls a leg out from under them.

Thoughts?

I'm waiting patiently for RBS to raise the interest on my savings. ?

 

[Daveysgingerlovechild]

I'm waiting patiently for RBS to raise the interest on my savings. ?

Yeah, not so swift there are they?