We all loooove mortgage finances around here...
An email I’d been dreading finally arrived last month. It was from my bank, reminding me that my fixed-rate mortgage — set, seemingly in another world, at 1.59 per cent — is ending in May and that it was time to decide what to do next.
It’s a question that about 1.8mn people will face in 2026, as the UK enters the last year of its long, tearful goodbye to sub-2 per cent mortgage rates.
The last time we fixed, our preference for longer-term certainty worked out well, since — by nothing other than sheer fluke of timing — we avoided the worst of the mortgage rate shocks of recent years, when borrowers saw rates peak above 6 per cent for some fixed-rate products and about 8 per cent for revert-to or standard variable rates.
...also known as the great well-off Boomer redistribution...sub-2% locked in before 'rona inflation and property price "increase" is a clear steal #1430666, #1446786
Much be a hard choice for many households out there:
it was not sadness at leaving what is, in all likelihood, the lowest rate at which I’ll ever borrow, that made me dread the email — rather, it was the remarkable amount of uncertainty about what to do next. Should we take a tracker or fix? And if we do fix, how long for? If your fixed-term deal is coming to an end and you feel anxious, you may have good reason: the mortgage market has not been this jittery in decades.
At some level it's unsurprising... money that doesn't work gives you... a credit system for the most impactful financing decision you ever make, that doesn't work:
"the monthly percentage point change in quoted fixed mortgage rates shows that volatility since the start of 2023 is three times higher than in the decade to 2022.""the monthly percentage point change in quoted fixed mortgage rates shows that volatility since the start of 2023 is three times higher than in the decade to 2022."
Rollover risk is real, and I can't even begin to understand how people ought to make rational decisions about a) a fluctuating asset
b) the constant 2, 5, 10-y rollover risk for financing said asset
c) the other everyday human concerns about job markets and opportunity costs and investments and incomes.
Oh well, if there was only like a way to hold value in a decent money...#1423402
archive: https://archive.md/oRkpt
Bet he wishes he had a 50-year fixed rate mortgage!
I can't believe adjustable rates are the situation in most of the developed world. I doubt I would have wanted to buy a home without a fixed rate.
I thought the more common thing was fixed but resets every 5 years. sounds like he's in that kind of situation
You're right. In my mind, that's just a variety of adjustable rate, though.
Where in at, were used to way shorter adjustables.
In most economists' minds why central bank policy is more effective than in the US (bc changes hit pretty directly on large item in household budgets)
Don't we all!
At 1.59% I am extending that mortgage to 100 years if I could