Being advised to accept a high 6.4% @2yrs over 5.8% @5yrs #HELP

[soworriedaboutthis]

@alabasterjar !thanks - I went for the 5 year fixed.

 

[jamieslilwifeypoo]

@soworriedaboutthis Consider a 3 year deal as a happy medium? No one knows what’s going to happen, anyone saying otherwise js lying.

I was a mortgage advisor for years, feel free to ask me anything and I’ll respond with my opinion which isn’t advice

I think the BoE and government have dramatically underestimated the impact of these increases, hammering these increases month after month is unprecedented and only in the next year or so will we see people come off rates of 2% and onto rates of 6%plus, which will push a lot of people into selling their homes. If not it will certain restrict disposable income into a recession. Personally I think I’m 2/3 years the rates will drop back down, not as low as they were but maybe 2/3%.

But it’s all a guessing game, if we knew we would be millionaires.

 

[soworriedaboutthis]

@jamieslilwifeypoo !thanks - Just replying to the comments, I went for the 5 year fixed. I agree it's all up in the air and everyone is so indifferent on how the next few years play out. There are a lot of issues with the world right now and I genuinely believe it's a lot bigger than rate increases and inflation, there are just numerous crises in multiple areas of our economy, not to rant but capitalism just clearly doesn't work. It's pretty clear when necessities or what should be necessities are out of reach for many people or a struggle - housing, utilities and food. I hope you're right and they drop, I'll just have to wait 5 years to benefit haha

 

[johnachillies]

@soworriedaboutthis Just on one point, how “unsustainable these rates are” doesn’t enter into it. The point of the BoE monetary policy is to control inflation, and the means of doing that is causing pain for borrowers unfortunately. Rates were unsustainable in the 1990s and the main effect was we just watched record levels of repossession throughout that period while the situation resolved.

 

[jesus2]

@soworriedaboutthis The broker gets paid a fee each time you remortgage.

They have a vested interest. Do not listen to what they say. Work it out yourself.

 

[soworriedaboutthis]

@jesus2 Agreed, there are many bad brokers around but my broker wasn't pushing either, he's a good broker - just gives me the facts/rates/what's available to me and answers any questions I have. The differing opinions and advice were between two close friends advising.

 

[daaaniel]

@soworriedaboutthis No one knows what is going to happen -- the question for you is, could you afford to go up to 8% in a couple of years if you take the two year fix now? Could you afford higher? If you can then it might be worth the risk.But don't ever risk your house on something that is a punt.

 

[soworriedaboutthis]

@daaaniel !thanks. It's a good point, I did do the math up to even 10%, I don't have debt and I could survive but that's all I'd be doing - surviving (eating, sleeping, working repeating and living off 20kg bags of rice). I went for the 5-year fix in the end as I can live comfortably and enjoy life. It may work out well, it may not... time will tell for all of us. The bottom line really is 'risk' and when you're a single parent, you can't take that risk whatsoever, especially how indifferent everyone is forecasting the next few years

 

[daaaniel]

@soworriedaboutthis There's a lot.to he said for the certainty of a longer term. Sleeping well has value too.

 

[ulin]

@soworriedaboutthis My mortage is up for renewal in september so I'll tell you my plan, make of it what you will.

I'm going to move onto a tracker which is at 5.5% right at this moment and sit there until the rates start coming down, which I'm estimating will be in about 18 months to 2 years. I'm also expecting 1 more bump up in rates between now and Christmas then it'll sit there for about a year. This is all from out of my ass though so grain of salt and all that.

I am also not expecting the rates to ever fall below 3% again, so I plan to fix again if/when they get back there, at which point I'll be looking for a 5 or even 10 year fix that I indend to be my last stint of the mortgage.

 

[evo8dude]

@ulin Could you please explain more about the tracker type of mortgage? Do you mean the variable rate?

 

[soworriedaboutthis]

@ulin !thanks I understand and almost decided on the tracker. To each their own. I could see it working out but could also see it not. Good luck though!