Mortgages - Help!

[Maroon Manc]

One way out of this mess in the short term and even possibly long term is too allow those who are heading for trouble to switch to an interest only mortgage.

People choose to forget that interest rates were always going to go up, just as the balmy days of summer are always followed by winter. If you overpaid on your mortgage when rates were low, now you could go interest only and still be on course with fairly consistent payments.

I think the UK lending probably has been more generous than in the South, where the restrictive criteria will prove their worth now, people might feel a squeeze but they should not lose their house and the rest of use will not have to bail out the banks.

Rates were low for 14 years, a generation of people thought it was the norm. Houses prices have gone crazy, there'll be very few households with a mortgage that won't feel the pinch of a 3-4% increase in rates.

[Milltown Row2]

Again anyone who can afford a £400K house can well afford the hike, and if they couldn't then that's on them, they'll also hardly go homeless, they will just have to sell and move into the estate

[quit yo jibbajabba]

Rumours atm of a big u-turn from the Tories on their mini budget. Appreciate it wont fix things overnight but will be interesting to see the fallout.

Such a shitshow atm...

[Tony Baloney]

I have 4 years left of a 5 year fix at 1.44% - would I be best trying to overpay as much as possible (without incurring any overpayment penalties) in the knowledge that's it's definitely going to be a higher rate in 2026? I have seen this question asked elsewhere and an investment chap said he would invest the money you'd overpay as the returns over the same period are likely to be greater.

[Maroon Manc]

Again anyone who can afford a £400K house can well afford the hike, and if they couldn't then that's on them, they'll also hardly go homeless, they will just have to sell and move into the estate

Probably a bit different over, £400,000 is probably the price of a house in South Manchester, a lot of people will be in real trouble.

[imtommygunn]

Invest in what though Tony? Savings?

[Maroon Manc]

I have 4 years left of a 5 year fix at 1.44% - would I be best trying to overpay as much as possible (without incurring any overpayment penalties) in the knowledge that's it's definitely going to be a higher rate in 2026? I have seen this question asked elsewhere and an investment chap said he would invest the money you'd overpay as the returns over the same period are likely to be greater.

Just use a spreadsheet and work it out, you can get 4% on a 1 year savings fix and there's a good few easy access account paying more then 1.44% and with rates likely going higher savings rates will improve.

[seafoid]

I have 4 years left of a 5 year fix at 1.44% - would I be best trying to overpay as much as possible (without incurring any overpayment penalties) in the knowledge that's it's definitely going to be a higher rate in 2026? I have seen this question asked elsewhere and an investment chap said he would invest the money you'd overpay as the returns over the same period are likely to be greater.

Inflation is like food poisoning. Once it goes through the system things return to normal. I doubt it will be higher in 2026

[WT4E]

I have 4 years left of a 5 year fix at 1.44% - would I be best trying to overpay as much as possible (without incurring any overpayment penalties) in the knowledge that's it's definitely going to be a higher rate in 2026? I have seen this question asked elsewhere and an investment chap said he would invest the money you'd overpay as the returns over the same period are likely to be greater.

Inflation is like food poisoning. Once it goes through the system things return to normal. I doubt it will be higher in 2026

Nice Analogy. Fair Play

[nrico2006]

Rumours atm of a big u-turn from the Tories on their mini budget. Appreciate it wont fix things overnight but will be interesting to see the fallout.

Such a shitshow atm...

But you would imagine that whatever u-turn that comes over the next few weeks will season well enough for anybody coming out of mortgage deals next year or the year after.

[seafoid]

Global debt is about 4 times the size of the economy.
If the economy is 100, debt is 400.

If interest rates are 1%, interest cost is 400*1% = 4
If interest rates are 5% , interest cost is 400*5%= 20

You can't have a long term situation where interest payments are 20% of the economy.
This would mean the money currently spent on clothes, holidays and going out for example would be stopped in order to pay interest
This is why rates will go down eventually.

[theskull1]

I have 4 years left of a 5 year fix at 1.44% - would I be best trying to overpay as much as possible (without incurring any overpayment penalties) in the knowledge that's it's definitely going to be a higher rate in 2026? I have seen this question asked elsewhere and an investment chap said he would invest the money you'd overpay as the returns over the same period are likely to be greater.

Thats what I'd do

[imtommygunn]

Rumours atm of a big u-turn from the Tories on their mini budget. Appreciate it wont fix things overnight but will be interesting to see the fallout.

Such a shitshow atm...

The BoE are forcing their hand and they reckon also that the 1922 committee have told them to do it or else. Either Kwarteng or Truss, possibly both, sound to be very very close to being on the way out.

[johnnycool]

I have 4 years left of a 5 year fix at 1.44% - would I be best trying to overpay as much as possible (without incurring any overpayment penalties) in the knowledge that's it's definitely going to be a higher rate in 2026? I have seen this question asked elsewhere and an investment chap said he would invest the money you'd overpay as the returns over the same period are likely to be greater.

Thats what I'd do

what would you be investing in? Shares in Fossil fuel companies?

[imtommygunn]

A currency that is not sterling