| Mortgage/Inflation quandry 08:58 - May 24 with 2605 views | hype313 |
My Mortgage is up for renewal, we had planned to move in the next few years, but I have a nasty hunch that we are about to embark on a high inflation journey.
Could do 2 years saving £200 a month or go for 5 years and fix it paying essentially the same as I am now meaning that if we do hit a period of inflation I will be safe from a mortgage point of view.
Anyone else in the same position at the mo? |  |
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| Mortgage/Inflation quandry on 09:02 - May 24 with 2576 views | chicoazul |
Things are, I was going to say weird, but I suppose we have had very low interest rates now since 2009 so maybe it’s not weird but normal.
Obviously you need to take proper financial advice but inflation hits savers hardest so I suppose it depends on what you are going to do with the £200 a month..? Personally though based on what you’ve said I’d fix for five years, which is what I did in Jan last year. [Post edited 24 May 2021 9:03]
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| Mortgage/Inflation quandry on 09:06 - May 24 with 2528 views | hype313 |
| Mortgage/Inflation quandry on 09:02 - May 24 by chicoazul |
Things are, I was going to say weird, but I suppose we have had very low interest rates now since 2009 so maybe it’s not weird but normal.
Obviously you need to take proper financial advice but inflation hits savers hardest so I suppose it depends on what you are going to do with the £200 a month..? Personally though based on what you’ve said I’d fix for five years, which is what I did in Jan last year. [Post edited 24 May 2021 9:03]
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Inflation does hit savers harder but normally the BOE covers that by raising Interest Rates so they will benefit from that.
But I really can't see how they can raise IR given the amount of people on Interest Only mortgages/Car leasing etc, seems it would set of a nasty chain of events.
Think I might do as you say, fix it for 5 years, if we do want to move we can always port it. | |
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| Mortgage/Inflation quandry on 09:06 - May 24 with 2525 views | UB9Blue |
One consideration is if you are still planning to move in the next few years as a five year deal will attract early settlement penalties.
Personally I think that property prices will come under pressure (or adjustment) in 18-24 months time and it could see a significant drop in values. |  | | |
| Mortgage/Inflation quandry on 09:06 - May 24 with 2527 views | Steve_M |
On inflation, there is an argument that inflation will just be down to pent up demand putting undue pressure on supply chains - the ketchup bottle theory - and it will not be long lasting.
I doubt you'll see a significant change in interest rates over the next two years, maybe over a longer term but,a s Chico says, the last decade has been rather unprecedented in that regard globally. |  |
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| Mortgage/Inflation quandry on 09:09 - May 24 with 2490 views | Keno |
Drop Osborne One Nil a PM he's good on mortgages
he also has a very cute puppy
and no the second bit isnt a euphemism |  |
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| Mortgage/Inflation quandry on 09:14 - May 24 with 2470 views | TractorWood |
Try to get the longest fix with the lowest rate with the lowest exit fee. You don't want to be about to exchange contracts on a potential transaction and realise your exit fee is 5% or something.
As others have said, get independent advice from a mortgage broker. [Post edited 24 May 2021 9:23]
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| Mortgage/Inflation quandry on 09:17 - May 24 with 2450 views | chicoazul |
| Mortgage/Inflation quandry on 09:06 - May 24 by hype313 |
Inflation does hit savers harder but normally the BOE covers that by raising Interest Rates so they will benefit from that.
But I really can't see how they can raise IR given the amount of people on Interest Only mortgages/Car leasing etc, seems it would set of a nasty chain of events.
Think I might do as you say, fix it for 5 years, if we do want to move we can always port it. |
I’d be very very surprised to see interest rates move more than a point ish over the next few years, cheap money is propping the economy up. The worry is whether whoever we are borrowing these mountains of money from decides we aren’t worth it.
I am very risk averse about these things though! But I’d fix if I was you. Take proper advice though, I’m just an idiot on a message board. | |
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| Mortgage/Inflation quandry on 09:19 - May 24 with 2427 views | hype313 |
| Mortgage/Inflation quandry on 09:17 - May 24 by chicoazul |
I’d be very very surprised to see interest rates move more than a point ish over the next few years, cheap money is propping the economy up. The worry is whether whoever we are borrowing these mountains of money from decides we aren’t worth it.
I am very risk averse about these things though! But I’d fix if I was you. Take proper advice though, I’m just an idiot on a message board. |
Ha! Aren't we all!
To be honest my initial feeling was to lock it in for as long as possible and you and others have confirmed my thoughts. | |
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| Mortgage/Inflation quandry on 09:21 - May 24 with 2417 views | Keno |
| Mortgage/Inflation quandry on 09:17 - May 24 by chicoazul |
I’d be very very surprised to see interest rates move more than a point ish over the next few years, cheap money is propping the economy up. The worry is whether whoever we are borrowing these mountains of money from decides we aren’t worth it.
I am very risk averse about these things though! But I’d fix if I was you. Take proper advice though, I’m just an idiot on a message board. |
I believe you may have just written my epitaph "I was just an idiot on a message board" | |
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| Mortgage/Inflation quandry on 09:24 - May 24 with 2400 views | BanksterDebtSlave |
| Mortgage/Inflation quandry on 09:17 - May 24 by chicoazul |
I’d be very very surprised to see interest rates move more than a point ish over the next few years, cheap money is propping the economy up. The worry is whether whoever we are borrowing these mountains of money from decides we aren’t worth it.
I am very risk averse about these things though! But I’d fix if I was you. Take proper advice though, I’m just an idiot on a message board. |
It's going to be high inflation and low interest rates at least until we have bought all the things and spent any savings. At which point we are owned and probably surplus to requirements and anything goes.....welcome to debtslavery. |  |
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| Mortgage/Inflation quandry on 09:26 - May 24 with 2392 views | chicoazul |
| Mortgage/Inflation quandry on 09:19 - May 24 by hype313 |
Ha! Aren't we all!
To be honest my initial feeling was to lock it in for as long as possible and you and others have confirmed my thoughts. |
Hey look, an analyst I know says “I don’t think I have enough debt” and reckons now is the time to buy the biggest house possible, his reasoning being money is so cheap and this is a once in a generation opportunity. Who knows. Just gotta look at your employment prospects and such I guess. | |
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| Mortgage/Inflation quandry on 09:28 - May 24 with 2361 views | MillsTash |
| Mortgage/Inflation quandry on 09:02 - May 24 by chicoazul |
Things are, I was going to say weird, but I suppose we have had very low interest rates now since 2009 so maybe it’s not weird but normal.
Obviously you need to take proper financial advice but inflation hits savers hardest so I suppose it depends on what you are going to do with the £200 a month..? Personally though based on what you’ve said I’d fix for five years, which is what I did in Jan last year. [Post edited 24 May 2021 9:03]
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Fix for 5 years and get a deal with a low exit fee/if none at all possible. |  | | |
| Mortgage/Inflation quandry on 09:59 - May 24 with 2272 views | factual_blue |
| Mortgage/Inflation quandry on 09:09 - May 24 by Keno |
Drop Osborne One Nil a PM he's good on mortgages
he also has a very cute puppy
and no the second bit isnt a euphemism |
...but the first bit is? |  |
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| Mortgage/Inflation quandry on 10:00 - May 24 with 2270 views | Keno |
| Mortgage/Inflation quandry on 09:59 - May 24 by factual_blue |
...but the first bit is? |
There is possibly a quip about setting payments up in arrears but I am above such comments | |
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| Mortgage/Inflation quandry on 10:03 - May 24 with 2269 views | itfcjoe |
I did 10 years about 2-3 years ago, just easier as mortgage is quite large and know we can afford that - whereas if it were to go up 3-4% it would be dicey |  |
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| Mortgage/Inflation quandry on 10:09 - May 24 with 2232 views | hoppy |
| Mortgage/Inflation quandry on 09:21 - May 24 by Keno |
I believe you may have just written my epitaph "I was just an idiot on a message board" |
To be fair, given your habit for a typo, you’d probably end up with...
"I was just an idiot on a massage board" |  |
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| Mortgage/Inflation quandry on 10:10 - May 24 with 2227 views | Keno |
| Mortgage/Inflation quandry on 10:09 - May 24 by hoppy |
To be fair, given your habit for a typo, you’d probably end up with...
"I was just an idiot on a massage board" |
"I was just an idiot on a massage board, but this wasn't the happy ending I'd hoped for" | |
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| Mortgage/Inflation quandry on 10:11 - May 24 with 2223 views | thebooks |
Yes. I went 5 years fixed as the rates are so low, but it was a pretty tight decision. 2 years would have been fine, I think. |  | | |
| Mortgage/Inflation quandry on 10:14 - May 24 with 2202 views | MVBlue |
| Mortgage/Inflation quandry on 09:17 - May 24 by chicoazul |
I’d be very very surprised to see interest rates move more than a point ish over the next few years, cheap money is propping the economy up. The worry is whether whoever we are borrowing these mountains of money from decides we aren’t worth it.
I am very risk averse about these things though! But I’d fix if I was you. Take proper advice though, I’m just an idiot on a message board. |
Its all printed money borrowed from the future (Gov easing) |  |
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| Mortgage/Inflation quandry on 10:23 - May 24 with 2146 views | OsborneOneNil |
| Mortgage/Inflation quandry on 10:00 - May 24 by Keno |
There is possibly a quip about setting payments up in arrears but I am above such comments |
Oh pleeeease.... |  | | |
| Mortgage/Inflation quandry on 10:25 - May 24 with 2138 views | OsborneOneNil |
| Mortgage/Inflation quandry on 09:06 - May 24 by UB9Blue |
One consideration is if you are still planning to move in the next few years as a five year deal will attract early settlement penalties.
Personally I think that property prices will come under pressure (or adjustment) in 18-24 months time and it could see a significant drop in values. |
Pretty much all deals now are portable, so if you’re buying on you can avoid an Early Exit Charge.
Property values, they’ll stall a bit at some point, but ‘experts’ do not expect a crash, or even a significant drop. A slight correction, perhaps. | | | |
| Mortgage/Inflation quandry on 10:59 - May 24 with 2004 views | Fixed_It |
| Mortgage/Inflation quandry on 10:10 - May 24 by Keno |
"I was just an idiot on a massage board, but this wasn't the happy ending I'd hoped for" |
See - there you go - you misspelled 'hoppy'! |  |
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| Mortgage/Inflation quandry on 11:13 - May 24 with 1942 views | hoppy |
| Mortgage/Inflation quandry on 10:59 - May 24 by Fixed_It |
See - there you go - you misspelled 'hoppy'! |
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| Mortgage/Inflation quandry on 11:13 - May 24 with 1947 views | clive_baker |
I'm not a financial advisor, and this isn't financial advice, but one thing I tend to ask myself is the 'how easily can I sleep at night' test. i.e. to what extent you could stomach an uptick in inflation and the impact that would have on your mortgage (and other expenses for that matter). While locking in a longer term now might cost a few quid, there's something to be said for knowing you can cover your payments for the foreseeable in terms of peace of mind. Obviously there's a balance there though, and it could be that saving £200 a month for the next 2 years could then go towards paying more for the following 3.
FWIW I can see interest rates rising, but you would think they'll have to be done very sensitively, so a 2 year option followed by a 5 year in 2023 might not be a bad way to go? Sadly nobody has a crystal ball, so I come back to my sleep at night test. |  |
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| Mortgage/Inflation quandry on 11:52 - May 24 with 1792 views | Vic |
Miss Vic is about to take her first mortgage so had exactly the same discussion with her. I asked her if rates are likely to get any lower than they are currently in the next 5 yrs. we agreed not, but rather they are likely to go up if they move at all.
So she’s gone for a 5 yrs fixed. If they go down it won’t be by much and she won’t have lost out by much. If they go up then she’s saved herself something. Most important of all is that for 5 uncertain years she knows exactly what her mortgage payments are going to be. Peace of mind in troubled and uncertain times. |  |
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