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Marcos Scriven

Where Are Interest Rates Going?

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For my sins, I do have a mortgage (although a decent LTV, earnings ratio, and insurances)

My current 2 year deal is up and I'm thinking about a 5-year fixed. My broker though said he thought fixed rates were on their way down, and that I should go for the 2 year.

Do you think he's talking **** or not? I had the feeling that rates would end up rocketing in a year or two when inflation kicks in...

Marcos

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For my sins, I do have a mortgage (although a decent LTV, earnings ratio, and insurances)

My current 2 year deal is up and I'm thinking about a 5-year fixed. My broker though said he thought fixed rates were on their way down, and that I should go for the 2 year.

Do you think he's talking **** or not? I had the feeling that rates would end up rocketing in a year or two when inflation kicks in...

Marcos

Do you trust him? If he advises 5 years then it mean he gets no commission for 5 years. If he advises 2 years then you may go back to him in 2 years time, thereby earning him commission again.

Do you need the security of a 5 year fix?

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For my sins, I do have a mortgage (although a decent LTV, earnings ratio, and insurances)

My current 2 year deal is up and I'm thinking about a 5-year fixed. My broker though said he thought fixed rates were on their way down, and that I should go for the 2 year.

Do you think he's talking **** or not? I had the feeling that rates would end up rocketing in a year or two when inflation kicks in...

Marcos

Stick with your instincts. If I were to buy, I'd be looking for a decent 5 year + fixed rate deal.

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They way inflation is going they must go up mid term so a 5 year fixed would be they way id go

I would go for 10 myself (although you may be a bit young for that if you are going to move in less than that).

You may not qualify for a re-mortgage in 2 years :ph34r:

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My guess is interest rates are going down, but the interest on most mortgages will be going up, were heading towards a dual tier mortgage market...

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It's a difficult one. In the past I believed in the cheapest deal likely being the standard variable rates, reasoning that the borrower is taking the interest rate risk - if the bank was taking the risk, they would be charging for it.

I now believe that the banks haven't get an effing clue. If I was going to buy back in, I'd consider a lifetime fix for my own piece of mind.

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It's a difficult one. In the past I believed in the cheapest deal likely being the standard variable rates, reasoning that the borrower is taking the interest rate risk - if the bank was taking the risk, they would be charging for it.

I now believe that the banks haven't get an effing clue. If I was going to buy back in, I'd consider a lifetime fix for my own piece of mind.

The ten year t-bill yields are at or near generational lows and showing signs of a major bottom. Inflation is surging. Credit is tightening. Spreads are widening, credit markets are faltering.

check out figure 3 on this page:

http://www.financialsense.com/Market/daily/wednesday.htm

from the early 80s top of 15%, US 10 year yields have come down and showing a potential double-bottom around 4%. Now ask yourself? What's the potential upside, and what's the potential downside to interest rates where they are right now?

As i recently advised a friend - You'd be maaad not to get a fix in - while you still can!

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For my sins, I do have a mortgage (although a decent LTV, earnings ratio, and insurances)

My current 2 year deal is up and I'm thinking about a 5-year fixed. My broker though said he thought fixed rates were on their way down, and that I should go for the 2 year.

Do you think he's talking **** or not? I had the feeling that rates would end up rocketing in a year or two when inflation kicks in...

Marcos

find the best fixed rate for as long a period as you can. you are saving yourself future rental payments not punting interest rates.

if you want to gamble on interest rates you can do that outside of your mortgage as and when you like and for as long as you like.

why do people assume they have to second guess interest rates every time they take out a mortgage?

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For my sins, I do have a mortgage (although a decent LTV, earnings ratio, and insurances)

My current 2 year deal is up and I'm thinking about a 5-year fixed. My broker though said he thought fixed rates were on their way down, and that I should go for the 2 year.

Do you think he's talking **** or not? I had the feeling that rates would end up rocketing in a year or two when inflation kicks in...

Marcos

Marcos, where did you end up buying? I remember you looking around Covent Garden.

Monty

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It's a difficult one. In the past I believed in the cheapest deal likely being the standard variable rates, reasoning that the borrower is taking the interest rate risk - if the bank was taking the risk, they would be charging for it.

I now believe that the banks haven't get an effing clue. If I was going to buy back in, I'd consider a lifetime fix for my own piece of mind.

PIECE of mind??!!

That apart (and please don't give me a piece of your mind!) I agree that a lifetime fix is more likely to achieve peace of mind than SVR. What's the lowest fixed rate that you can lock into at the moment - not forgetting massive entry and/or exit fees?

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A portable fixed with no tie in, and ability to repay at least 10% per year without any penalty.

Always work out the true APR taking in account any fee charged. ;)

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I would go for 10 myself (although you may be a bit young for that if you are going to move in less than that).

You may not qualify for a re-mortgage in 2 years :ph34r:

Not always the case many loans are portable, with new borrowing on top of the original sum done at rates and deals available at the time of moving.

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Go with the 5-year fix. Rates are pretty decent for that period (lower than for 2-year fixes I think) and there is no guarantee that mortgage rates will come down even if the Bank starts cutting. Inflation is an unpredictable beast and there is danger of it shooting up even further, hence the Banks unwillingness to start doing large rate cuts now.

Remember also that the 5-yr rate is different to the current rate. The Bank can mess about with base rates but this has less influence on longer-term rates.

The difference between a floating rate and a fixed rate is also a matter of opinion. 2-yr mortgages are just posh floating rate mortgages. By and large we know more or less what will happen to rates in the next year or maybe more (within reason), so the exposure to interest rates is limited. Only when you get into the 3-yr+ mortgage do you start hedging a lot of unknown territory.

Your mortgage broker knows no more than any of us and his crystal ball may be just wishful thinking.

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For my sins, I do have a mortgage (although a decent LTV, earnings ratio, and insurances)

My current 2 year deal is up and I'm thinking about a 5-year fixed. My broker though said he thought fixed rates were on their way down, and that I should go for the 2 year.

Do you think he's talking **** or not? I had the feeling that rates would end up rocketing in a year or two when inflation kicks in...

Marcos

Some good advice given by the above posters. Majority seems to favour a longer term (5yrs +) and go with a portable mortgage.

No I wouldn't like to be remortgaging in 2 years time. Its anyones guess what interest rates will be like one month from now. B)

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I personally think that a variable rate mortgage will be 10% + within the next two years, but what the f@ck do I know.

Current SVR's are around 8% with some Banks, 10% I think will be seen in the UK by the Summertime!!!.

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Interest rates must stay low (or at least be lower than equivalent IR's in the Far East) in order for the West to devalue their currencies to balance out their Current Account deficits.

First , I figure the dollar needs to fall another 40% to balance out the huge trade and current account deficits this country has with the rest of the world, especially China.

If you're watching the dollar index, that means the DXY would have to fall as much as 30%, from its current level of 73 ... to as low as 51.

http://www.marketoracle.co.uk/Article3926.html

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I really can't see rates rising. I know it makes sense but the BoE have been making a lot of decisions over the past three years that don't make sense.

I don't think anyone expects the BoE to raise rates in the next 2 years, but bank rates increasingly separating from the base rate and rising on a weekly basis at the moment. I expect this trend to continue!

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  • 295 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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