Hi all Further to my post 6 weeks back on mortgages and the fact I'm a mortgage advisor, just to let everyone know that interest rates have gone up again today, the BoE rate is now 1%; the highest rate since 2009. If you're on a variable rate you can almost certainly save money now, and if you're on a fix that's not got long left to go, or it's a high APR, now could still be a great time to re-mortgage. I'm in the process of helping out a couple of BBSers which is great, I hope I can help more in the future. I'll bump the other thread back up for details of the firm I work with etc. Cheers. Allen
Just to echo the above, even if you are "locked in" to your current deal by early redemption penalties it might be cheaper overall to pay them and take a mortgage at today's rates rather than wait, if rates continue to rise (and I expect they will, 3/9 of the decision makers wanted to bump the rates by another 0.25% today, and the inflation forecast has been revised to 10.25% suggesting further rises will be needed to combat it). You can always take an offer and sit on it for a few months to see how things pan out.
But is it the case that interest rates will continue to rise when the inflation we are seeing is largely supply constraints led, rather than demand led, and the economy is already close to recession? I am no expert and thankfully have just started a new 3 year fix on my mortgage, but I am glad I don't have to decide whether to spend money on getting out of a fix now, in order to start a new one before further rate rises that may or may not happen. I suspect there is going to be at least one or 2 more - 3 of the 9 members of the MPC wanted to put it up 0.5% today rather than 0.25%. But any more than 1 or 2 more rises in the current climate is going to really spell trouble for many people and to us into a deep recession. Glad I am not making these decisions.
Takes me back to our first mortgage - 1991 - took a two-year fixed at 12.25% Shrewd move at the time, given it hit 15% the following year! Mortgage-free now, but heart goes out to them just starting out.....
1990 - took a fixed 13.5% with an ex. Never even moved into the place. 1992 - with Mrs Mac we took a 9.5% (I think) fixed and I thought wow, look how much I am saving.
I was in Germany 1990-93 and we stupidly kept the Gloucester house and rented it out while away. Unfortunately rental income was only coming in for about 25 of those 36 months. When the mortgage rate hit 15% it was very hard to take but we had no choice but to ride the storm. Ironically house prices dropped on our return to UK so selling in 1990 high and buying a better one cheaper in 93 would have made a lot more sense. You do what you think is best though - sometimes you get it wrong!
A mortgage advisor can't tell you that of course or whether you should pay ERCs to get out of a fix. Guess it comes down to risk appetite, your current rate etc. If you can get a cheaper rate, for a few years for a few hundred quid of ERCs it may be worth it, but not to everyone.
I’m pretty sure interest rates hit 17% in 1979 when we’d been married a year. Remember being very skint.
Similar story, my first mortgage was in 1978 & I managed to get one at 10%, hard going, ended up doing 2 jobs in order to manage
I took mine out in 1985 cant remember exactly but rates of 14% seems to ring a bell - or maybe that was my 2nd Mortgage in 1989. I distinctly remember arguing with an advisor who wanted me to take a 100% mortgage for the 2nd but I didnt need one as first house had (almost) doubled in value so I could afford a 3 bed semi on an 80% one. Adviser insisted I would be better taking the 100% and investing the spare 20% in PEPs as I would be "almost" guaranteed 20% APR on them. I thought of the old saw "if something is too good to be true..." and found another advisor Rather glad I did Cant find it now but I saw a graph of house prices against average earnings - from the 60's to the mid '80's the increase of both tracked fairly well but since then the house prices have increased significantly faster such that now without a helping inheritance I cant see how most young will ever get a house.
Same mate. We took out a 7k mortgage in 1978 at 7.75% and within a year it had doubled to 15%. Thought we might have to sell up. But struggled through. And yes interest rates did peak at about 17%. Like you say Gimmer skint was our lot for quite a while.
Funny you should say that, over the weekend, my missus and I were having a discussion about possibly moving in the short/medium term (a discussion which is increasing in regularity) and what we may do and where we may go etc. As a result we had a little look at local prices. There's just no way we could have afforded to have lived here if we were buying now. And when you look at some of the prices for one and two bed flats, I just don't see how people can get on the ladder without the help of bank of mum and dad, a windfall or being on a very hefty salary at a very young age.
I remember when my interest rate was 45%, my income was only 20% so I didn't have anything left to pay for anything. I had already eaten my left foot and was saving my right foot for the future. I used to suck the juices out of my pillow every morning after a night time of dribbling, and then out to find a stick to chew on for "breakfast". "A stick, you were lucky to have a stick" some of you will say, but sticks were scarce in those days. Sometimes it ended up being just a corner of a brick but I were grateful for that. You young'uns, you don't know you're born.
Both Me and Mrs F are on quite good incomes as we are approaching retirement in the next few years. I dont know exactly what we could sell our house for as the houses in our road are all different but I could make a decent guess certainly to within 100K and even if its at the bottom of that range we wouldnt be able to afford it now if we were starting from scratch. We have been here 20 years and it was a stretch when we bought it, in fact had the sellers stuck to their original asking price we would have had to walk away but now its not even close
Nothing worse than someone boasting about their privileged upbringing and insurmountable wealth. You have no idea how bad things were here in Dundee. Your life sounded like a fortnight at Butlins.
