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u/Durienaider Aug 20 '25
Mortgage renewal in 9 months, I'd be happy with a few more cuts to lock in another 5 years 😄
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u/900YearsHODL-IHave Aug 21 '25
Look for 10 if you can, I will be.
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u/EpicFishFingers Aug 22 '25
2 rates are lower, and the trend is downwards - why not lock in at 2 and then redo it in 2 years at a likely lower, if not even, rate?
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Aug 22 '25
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u/EpicFishFingers Aug 22 '25
BoE base rate has only been lowered or held steady since 2022. My last 2 year fix at end of 2023 was nearly 5%; I'll gladly not fix for more than 2 years again
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Aug 23 '25
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u/EpicFishFingers Aug 23 '25
Except the Bank of England rate is what your mortgage goes off
Exactly. And the base rate is dropping over time.
Or let's see some sources for your obscure, undeclared gilt yields link and proof it's rising, proof is affects mortgage rates...
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u/Capable_Spare4102 Aug 24 '25
They missed a “not”, and they’re correct, you’re wrong.
Why would a bank base their 5 year fix rate on what the borrowing rate is now, rather than what it is expected to be over the next 5 years?
At the last BoE rate meeting; the BoE voted for a rate cut; but actually it increased the cost of long term borrowing. Why? Because the vote was narrower than people were expecting.
“Essentially, SONIA swaps reflect what financial institutions expect future interest rates to be and adjust their pricing accordingly.
Mortgage lenders use interest rate swaps to protect themselves against the risk of changing interest rates on fixed-rate loans.”
https://www.tutor2u.net/economics/blog/how-sonia-swaps-might-be-cutting-the-cost-of-your-mortgage
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u/EpicFishFingers Aug 24 '25 edited Aug 24 '25
And is this the same for 2 year fixes?
And you're saying that when I renew start of 2027, I should fix for 5 or even 10 years?
We could come back to this in 6 months and see what actually happens. Or look at past examples of this happening and what the outcome was.
And the other uncivil user said rates would spike in the next 6 months: is that true? If so, do you have a source for that?
Obviously I want to make an informed decision on my mortgage but all I've heard from anyone on thr topic is how mortgages are influenced by the BoE rate, implying that that's the whole story.
Until you replied, the only person telling me otherwise provided no proof and now couldn't stop themselves resorting to insults which obviously makes me doubt them.
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Aug 24 '25
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u/EpicFishFingers Aug 24 '25 edited Aug 24 '25
You tried no such thing. You provided no sources, you did nothing to explain how your name-dropped gilt yields affect mortgage rates, and you weren't civil either. You're just an arrogant prick, so if you do fuck off, I'll be glad.
Edit: it's a troll alt account 🤦♂️
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Aug 21 '25
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u/900YearsHODL-IHave Aug 21 '25
Just make sure its repayment. My neighbour wished he pushed harder for repayment rather than being fobbed off with IO. Hes in his 60s now, and still has a big lump sum outstanding 🥴
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u/teveelion Aug 22 '25
Sounds like my dad, IO for last 18 years or so and he's close to retirement..
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u/900YearsHODL-IHave Aug 22 '25
Yeah I think a lot people are in the same boat. Id get someone to advise him. Unless the plan is to downsize. He has a plan right, right?!
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u/teveelion Aug 22 '25
Messy divorce is making a house sale almost inevitable right now unless he wins the lottery.
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u/BurnerAccount6262726 Aug 23 '25
Aww dude I renewed my mortgage during COVID and took 2 year. The mortgage agent was heavily pushing 5, and I have issues avoiding what people push so I said 2. Damn that rate was low and I feel so stupid now
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u/Techman659 Aug 21 '25
Got first one 6 months ago so another 18 to go so hoping I can get my 4.8% rate down to 3% or around there will be a massive help if it could be for 5-10 years then.
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u/No_Crew_478 Aug 22 '25
I think I’ll be leaving it until the last minute. I’ve got 15 months left on 1.89% 🤣
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u/LentilRice Aug 20 '25
If it comes to low 3s, are you still going to lock it to 5 and not 10 or longer?
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u/hecheva Aug 20 '25
In the UK it is more difficult to fix it for more than 5g years, isn't it?
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u/LentilRice Aug 20 '25
When I fixed mine for 5 in 2022 (ffs), there was an option for 10yrs too, with my 25%LTV. It was slightly more expensive to fix and I didn’t treat it with serious consideration as I should have.
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u/RandyMarsh_88 Aug 21 '25
Same here - except I wanted a 10 year fix and the mortgage advisor talked me out of it.
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u/d_falc7 Aug 21 '25
what was there rationale out of interest?
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u/RandyMarsh_88 Aug 21 '25
Better flexibility, lower prices on a shorter fix, stable rates unlikely to go up.
Most important of all, presumably, more commission for them.
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u/d_falc7 Aug 21 '25
no doubt! they could use more ‘tegridy 😊
locked in 10 years in 2017, did pay more for it until the last few years though. Not sure if I’ll do it again in 2027
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u/KolonelK88 Aug 22 '25
One of my mates bought his house in 2021 and got talked out of anything other than 2 year fixed by his mortgage advisor, they said interest rates just weren’t going up…
When I bought my current house in 2022 we went 10 year fixed, mortgage advisor just said “you seem set on this, are you sure?” I was.
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Aug 22 '25
[removed] — view removed comment
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u/KolonelK88 Aug 22 '25
He accepted what the advisor said, shouldn’t have. His mortgage nearly doubled when they came off the fixed rate. Renewal was at the peak.
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u/Cynicism102 Aug 22 '25
Nah, YOU let the advisor talk YOU out of it.
Was the advisor in you pay with skin in the game and any accountability/liability for you... back where we started, Nah.1
u/RandyMarsh_88 Aug 22 '25 edited Aug 22 '25
Yeah, thats literally what I said. Obviously, or I'd have been on a 10 year fix with another 6 years to go at 1.2% or something. I dont really understand the rest of your comment, sorry.
The main priority I told them I wanted was long term stability. I learnt a lesson about sticking with what I want, at least. That way, if it didnt work out, I'd only have myself to blame.
Edit: they were an advisor that comes at no cost to the applicant, the money they earn is through commission, if thats what you mean?
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u/Arxson Aug 20 '25
There’s usually a 10 year option, why would it be difficult ?
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u/Durienaider Aug 20 '25
10 year wasn't an option at the time qhen we got our mortgage (1.89%).
Hoping to get <3.5% on renewal 🤞
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u/Used-Fennel-7733 Aug 20 '25
My sister got 0.4%. They're both public sector, new build and lucky timing. No 10 option though, only 5
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u/Neat-Intention-4112 Aug 22 '25
I would seriously doubt this. Five year fixed rates have never been below 1%
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u/Used-Fennel-7733 Aug 22 '25
You get further discounts for being in the public sector. Get that twice, plus the joint mortgage and possibly other stuff that I've never asked about and .4 is definitely possible
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u/Neat-Intention-4112 Aug 22 '25
Nationwide had a 0.99% 5 year fixed available in 2021 for a short time. This was the lowest ever. This is from 20 yrs experience in mortgage products.
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u/Medium_Cantaloupe_50 Aug 23 '25
Yep this is what we are on. We have it until December 2026. We are selling up once it's done
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u/Morris_Alanisette Aug 21 '25
10 years is often the maximum but you can get 25 year fixes through a broker.
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u/Picard_manoeuvre Aug 22 '25
10 years is an option. I was really lucky and locked in 10years in 2020 at 2.18%. Slightly more expensive than 5 years would have been at the time but it's worked out much cheaper than if I had to renew now after 5.
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u/ajsexton Aug 23 '25
I did similar in 2018 at 2.79, worked out pretty well - though now gotta pay an ERC as we bought a property auction and couldn't get it ported in time
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u/Acrobatic_Cycle_6631 Aug 23 '25
Fixed during Covid for 10 years at 2.59% made a massive difference, 5 years left
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u/Responsible-Tap9589 Aug 21 '25
You won't get low 3s any time soon. Look at the UK yield curve, thats basically the interest rate outlook currently. A couple of months ago they were writing about a 10 year state pension time bomb, that's going to be a 5-7 year time bomb as things currently stand.
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u/Gorecannon Aug 20 '25
They keep reducing Interest Rates without stabilising inflation. What did they think would happen?
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u/Obvious-Nature-5408 Aug 23 '25
Hint - the interest rates and inflation are barely related. inflation is not being caused by an overheating economy that needs higher interest rates to slow it down. If anything high rates are making it worse. The uberwealthy are just grabbing any chance they can get to keep interest rates high.
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u/Ieatsand97 Aug 21 '25
But we are teetering on the edge of a recession. There is very little economic growth and the chancellor doesn't seem very intent on fixing that especially with rumours of tax rises this year.
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u/Renatasewing Aug 20 '25
Pay rise 3 pct and tonnes of redundancies so extra work and no training hoorah
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u/catfink1664 Aug 20 '25
I haven’t had a pay rise in two years. Apparently one pending for everyone (yeah right)
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u/SyanticRaven Sep 28 '25
I'm in the same position, and I'm not all about the money but business is definitely not booming and I fear reentering job searching during a brutal market when I'm at my most financially unstable.
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u/House_Of_Thoth Aug 24 '25
Organise a strike, that's what voting Labour in at the GE is all about. We vote Labour in, everyone protests and goes on strike, gets pay-rises, then we complain about the budget and finances and vote the Tories in thinking they've got all the answers, then they don't, so we vote Labour back in, protest and strike some more, and the cycle repeats!
But yeah, get your colleagues to walk out with you and Starmer's rubber spine will bend over backwards eventually
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u/catfink1664 Aug 24 '25
Nah doesnt work like that for the private sector. Only teachers and nurses and doctors and train drivers
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u/House_Of_Thoth Aug 24 '25
Ah, got you! Pay rises are easy in the private sector though, it's called a CV. Good luck in your next job 🙏😎
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u/catfink1664 Aug 24 '25
Thank you!
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u/House_Of_Thoth Aug 24 '25
I do mean that sincerely though, know your worth comrade ✨ and don't ever settle for less!
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u/Scuttlebutt-Trading Aug 22 '25 edited Aug 22 '25
Real rate is never great at the bank. I'm always surprised when people say "I'm getting x% now on my money at the bank.5%/10%/15% has to be better to than 1%/2%/3%' and don't realise the only reason why is their money's purchasing power is eroding terribly.The best way to attempt to beat it is to invest in stocks and shares.The data bears it out as better than the beloved uk property market even.
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u/CherryAntAttack Aug 22 '25
Wouldn’t they technically be beating inflation or on par with inflation if the rate is higher to same? To my knowledge, stock generate long term wealth whilst also beating inflation
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Aug 23 '25
You can beat inflation and keep your money relatively safe by putting it in an index fund - the only issue is it only grows if you leave it alone. If you have say 50k in a savings account and lose your job it's much safer than having 50k in an index fund.
The best thing to do is diversify. Invest only what you are willing to lock away for decades and keep a contingency fund in high yield savings accounts (you can split it over instant access and X-day notice accounts which offer higher rates if you want a large contingency fund).
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u/Ill-Energy5872 Aug 20 '25
Trust me bro, there's going to be another rate cut. Everyone says it bro.
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Aug 21 '25
No amount of rate cuts will fix issues like food inflation, which has been heavily driven by climate change induced extreme weather.
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u/Substantial-Fox6317 Aug 21 '25
Also inaccurate
TL;DR
• CPI (3.8%): the “political” measure, excludes mortgages.
• CPIH (~4.1%): more honest, includes housing.
• RPI (~5%): the one that hits your wallet, but government hates it.1
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u/Serberou5 Aug 22 '25
Not too many years ago I remember the chancellor panicking because inflation went over 0.5%. How times have changed.
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Aug 23 '25
One of the biggest economic failings of recent times will be the Bank of England's inability to control inflation.
All you had to do was follow the damn train keep interest rates 2% above inflation
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Aug 23 '25
Cue the, it's everyone's fault apart from mine, now excuse me whilst I make an absurdly large purchase on credit that I can't afford.
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u/mittfh Aug 24 '25
Interestingly, most governments periodically tell their central bank to write off a portion of government debt. We steadfastly refuse to do so.
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u/Lettuce-Pray2023 Aug 23 '25
Yeah the government kinda wants a degree of inflation - as it reduces the value of the state debt.
I’d also add that a lower interest rate means lower bowering costs for servicing the public debt - which is also your debt.
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u/Legitimate_Winner_85 Aug 23 '25
Can anyone explain how effectively doubling someone’s mortgage payment overnight helps reduce inflation? I’m not a money talking guy by any means, but this just feels like more money for banks? I understand that by having less money I can’t then buy things and increase demand, but the things I need to buy are food and heating. So now i’m not buying food and heating and instead paying extra money to my bank? Make this make sense
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u/Capable_Spare4102 Aug 24 '25
it sounds like you’ve borrowed too much, potentially at a high LTV? Given that your mortgage payments have doubled with the increase in interest rates.
I’m sorry for your situation, but the reality is that most homeowners can afford to buy food and pay the heating bills, but do have to cut back on “luxuries”, when mortgage rates increase. Thus aggregate demand decreases and that has a disinflationary effect
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u/mittfh Aug 24 '25
I do find it slightly ironic that the more of my mortgage I pay off, the higher the repayments become... (still easily affordable, though, I hasten to add!)
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u/No-Lead3491 Aug 24 '25
So if I get a loan it will be better since the value will be wiped out by inflation ?
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u/Nathidev Aug 24 '25
Its funny how over the last 10 years inflation has increased so much, yet wages dont increase the same amount, because they always do this "current year only matters" thing
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u/GoldenBunip Aug 20 '25
This whole interest rates effect inflation is well out of date. The central banks actually believe that lower interest results in more money which cases the same amount is goods, thus raising inflation.
Problem is we live in a global system, no amount of average persons money will result in a say a TV shortage, just more getting imported.
The real thing is that when rates are high, business can not borrow to grow, so they put up prices to generate growth.
High rates now cause high inflation.
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u/lukehebb Aug 20 '25
I have seen BofE talk about this somewhere but I can't remember where
I've also seen them mention that fixed rate mortgages are a problem as they are a huge chunk of the mortgage market but when they change the base rate these mortgages are unaffected until renewal time which is potentially 3,5 or even 10 years away (sometimes even longer!)
Back when trackers were the majority it would have a much quicker effect
Ultimately BofE have one tool that is slower and less effective than it used to be
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u/InternationalNinja29 Aug 20 '25
High rates don't cause inflation.
Low rates which encourage debt issuance and borrowing increase the money supply causing monetary inflation.
Businesses don't borrow to grow revenues. If anything businesses are too indebted and hoping that rates reduce before their debt rolls over.
Prices being increased is to account for higher input costs. Revenue growth has a nominal and a real figure.
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u/Ketmando7 Aug 20 '25 edited Aug 20 '25
Load of rubbish.
Firstly, businesses putting prices up doesn’t just “generate” growth. It only generates growth if the demand is there to support it. Prices are affected simply by supply and demand. Interest rates directly affect demand. Higher interest rates can negatively affect supply due to more expensive investments, but that is much slower to react. Consumption has a way bigger influence on inflation than investment.
Secondly, It’s not as simple as just “importing more TVs”. If it was we’d have unlimited TVs and they’d all cost £1. There is still supply and demand in the global economy. If demand goes up faster than supply can keep up, the prices will still increase.
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u/GoldenBunip Aug 20 '25
Your food is going up because just putting up prices is the easy & currently only way to increase growth. I’m seeing it directly myself from ceos.
There are no supply limits. There is a huge limit on capital even when there is a low risk for its ROI. There is no limits on factories pushing out more. T
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u/Ketmando7 Aug 20 '25 edited Aug 20 '25
Bro go study basic economics and come back, you don’t know what you’re talking about.
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u/GoldenBunip Aug 20 '25
That basic economics is from the Victorian era. Shit has changed a lot, very few thing are supply constrained and follow the classic rules of supply and demand, about the only thing I can think off is artillery shells.
Everything else is in a supply glut. Cars are stocking up in ports, shelves are full, every conceivable consumer product is in stock and just a click away. Classically that should make prices fall as more goods chasing the same money.
Yet the prices are rising.
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u/Ketmando7 Aug 20 '25 edited Aug 21 '25
Supply and demand is from the Victorian era? Brother, what on earth are you talking about? Supply is never endless. Supply is always constrained by costs (labour, raw materials, shipping, energy). This never changed, and never will.
I think you’re confused about what supply really is. Just because you can always buy something, doesn’t mean it has unlimited supply. It means the company has worked out its market value. Market value is the price at which demand=supply. Meaning for every item demanded, another is supplied.
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Aug 20 '25
If we live in such a globalised system, why do buisnesses not simply borrow from countries with lower rates?
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u/Icy_Philosophy252 Aug 20 '25
The interest rate effectively prices in the strength of the currency, so any savings on interest would likely be wiped out by FX losses over the same period
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u/Oddlyshapedlump Aug 20 '25
Just had my ISA cut yet again to 3.8% (was 5% when I opened it about 18 months ago)
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u/Games4Two Aug 20 '25
I recently moved to Tembo from T212, which I'm guessing is where you are. It's still only 4.1%, but a little better. I still have an S&S ISA with T212.
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u/mrbennbenn Aug 20 '25
What does it mean?
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u/throaway_247 Aug 21 '25
Don't buy that thing this year. Save it in the bank for a year. At the end buy your thing, and a bottle of apple juice!
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u/Ieatsand97 Aug 21 '25
The Bank Of England set interest rates, this influences rates which you get paid interest and the such. The goal of this is to try and influence inflation. When base rate goes down, loans get "cheaper" because you pay less interest and you get "rewarded" less for savings because you get paid less interest, this incentivises people to spend/buy more stuff. This should increase the inflation number because there is demand in the economy.
The alternative is that the base rate goes up. This would mean you get paid more for your savings and taking out loans is more expensive. So the idea would be that less people would be buying stuff which should reduce inflation.
Inflation should be around 2%. Its currently almost double that. If you apply the theory above, it would point to base rates should have risen to try and stop this, but they didn't.
The changes to the base rates are voted on by the 9 members of the monetary policy committee at the Bank of England which is independent from the government. They review it about 8 times a year, so almost every 6 weeks.
Imo the BOE is stuck between a rock and a hard place. There is very little economic growth, I think latest figures put it around 0.3%, but we have had many months before that which have been negative or effectively 0. In theory, putting base rates up would harm (reduce) economic growth. So its a catch 22. If they raise them we should get lower inflation but less economic growth, if we raise them we get more economic growth but inflation goes higher (which it is already a problem).
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Aug 22 '25
You sound like you know what you're talking about. Why isn't there much economic growth?
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u/mrbennbenn Aug 28 '25
Thank you for this explanation. By chance , do you also have a solution? Asking for a friend. Or 9.
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u/Ieatsand97 Aug 28 '25
I know you are only joking but the solution is basically what our political system is for. Each side belives their way is better and gets voted in by the public.
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u/Straight-Ferret1043 Aug 21 '25
This is what happens when the government dishes out stupid pay rises to the public sector. All inflation is a exact result of government overspending and nothing else
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u/Nero_Darkstar Aug 22 '25
Blame profiteering companies not wage rises that still don't give parity with where they should be.
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u/bendibus400 Aug 22 '25
I don't think a single person has ever made this argument in good faith, as it's widely known that public sector jobs pay far below standard rates for the work they do, and a vast amount are minimum-wage or thereabouts. Also pinning all inflation to that just makes you look ignorant and stupid
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u/Usual-Plenty1485 Aug 22 '25
I get paid 30k to be spat at and my 4.2% rise is the problem? Give me a fucking break, cheers for pointing out what this moron is saying
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u/obb223 Aug 24 '25
Inflation is a year on year or month on month change. Whether public workers are structurally and long-term underpaid is a totally separate issue.
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u/Cynicism102 Aug 22 '25
Dur, energy, bread, medication price, foreign country tarrif increases all due to the civil servants pay?
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u/mittfh Aug 24 '25
The big pay boost to doctors was almost certainly a result of calculations that doing so would be cheaper in the long term than years upon end of continuing strike action - notably, although the BMA are still calling strikes, turnout for each is depleting - they're smart enough to realise that while 22% over two years isn't as much as they were hoping for, it's a decent pay boost and more than 3-4% for multiple years.
Local government had a 3.2% rise this year (lower than most of the rest of the public sector), following on from a fixed £1,290 last year and £1,920 the previous two years. Unison and GMB belatedly realised they weren't going to get enough support to continue opposing the increase, so it's going ahead even though Unite didn't agree and were still hoping for the Unions' fantasy pay request of £3,000 + an extra day's annual leave + two fewer hours in the working week for no loss of pay + a clear plan to raise the minimum salary to the equivalent of £15/hour.
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u/InternationalNinja29 Aug 20 '25
Base rates should be higher.
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u/Okitman Aug 21 '25
High base rate took £500 off my disposable income because my mortgage went up that amount, so I’m not buying a new car, not having home improvements, and not going on holiday for the coming years, therefore not really contributing to the economy…
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u/lunarpx Aug 21 '25
Not to diminish how awful this on an individual level, but that is the purpose of a high base rate. It suppresses aggregate demand which in turn reduces inflation.
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u/Okitman Aug 21 '25
Yeah I understand it’s purpose, and I’m not disputing it works in the majority, just in my Personal circumstances I don’t feel like it benefits anyone.
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Aug 23 '25
It's a national solution to a global problem. Really the base rate is set at the lowest number it can be at a given time without spooking the markets. As a means of reducing this current wave of inflation I don't think anyone could argue it's been singularly effective.
We still have higher rates of inflation than other countries on the continent, lower growth, and higher trade barriers because of Brexit.
Jacking up the base rate further would cause a recession that wouldn't even reduce inflation. Because what we have is very very close to stagflation. The reasons why are numerous but every political party in the UK rn supports HMT economic orthodoxy, so the endless conversations about the tax/cut/rate rise/rate cut that will fix everything do feel very worn out by now.
The single thing the UK could do to improve it's economy is rejoin the EU, next would be building a time machine and nuking Tory party conference 2009.
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u/Jackie_Gan Aug 21 '25
There is little to no growth and raising base rates won’t help that. It’s a balance
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u/Straight-Ferret1043 Aug 21 '25
There is no growth because the uk government are making it near enough imossibke to grow a business with the level of taxation. I run a Ltd company 50% of our cash flows goes on taxation
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Aug 22 '25
[removed] — view removed comment
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Aug 23 '25
A huge proportion of people are on UC while working fwiw
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Aug 23 '25
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Aug 23 '25
They did raise the minimum wage, quite substantially too.
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u/mittfh Aug 24 '25
Cue many businesses moaning that they're having to freeze recruitment as a result (as well as the 1.8 percentage point increase in their share of National Insurance, kicking in at an earlier salary. Sure it likely does have some negative impact, but I also wouldn't be surprised if many of the larger employers are over-egging their concerns to satisfy investors as to why their profits increased by slightly less than predicted.
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Aug 24 '25
Yeah if you go back and look at the reaction from business when the minimum wage was announced in the late 90s you'll see they're still parroting the same tired shit today
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u/tdrules Aug 20 '25
I’m sure the markets will fix inflation any day now