How long should you fix your mortgage for - and what next for rates?

This is Money Podcast

This is Money

Business News, Business, Investing, News

4.1 • 650 Ratings

🗓️ 14 April 2023

⏱️ 52 minutes

🔗️ Recording | iTunes | RSS

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Summary

As if buying a home wasn’t enough of a lottery, borrowers are now facing a major gamble on their mortgage.

Whether buying or remortgaging, they need to work out how long to fix for and try to assess what might happen next to interest rates.

On the basis that even the world’s top economists and investors didn’t spot the past year’s sudden interest rate spike coming and can’t agree on what central banks will do next, that’s a tough task.

Five-year fixed rates are cheaper than two-year fixed rates, but borrowers worry they risk locking in at higher rates for longer.

Meanwhile, trackers are pricier but could fall if the base rate comes down, although there’s not much agreement on when the Bank of England will stop hiking or how swiftly it will lower rates when it eventually does.

On this podcast, Georgie Frost, Helen Crane and Simon Lambert discuss the great mortgage gamble and what people can do.

Also on the show, the house price hotspots of the past decade – and why living in a place where home values has doubled may not be a good thing.

Simon takes a look at UK shares, why they are considered cheap and whether they are a decent investment or not.

Helen talks through her latest Crane on the Case and how it involved a loyal BA customer locked out of a staggering number of Avios points and getting a raw deal from the airline on sorting it out.

And finally, here is a test of your age: how well do you remember the Ford Orion, Austin Maestro and Vauxhall Nova… and did you ever believe that one day they’d be classic cars?

Related links

The great mortgage gamble: what should you do?

The top 50 house price hotspots

The UK stock market is cheap but will investors who back it finally get luck on their side?

Have my 650,000 Avios points vanished?

The cars turning into unlikely classics

Transcript

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0:00.0	Welcome to This Is Money Podcast. I'm Georgie Frost and joining me and editor Simon Lambert today is Deputy Editor Helen Crane.
0:10.0	And coming up, fix for five years, lock in for two. I'll take a punt on a tracker.
0:14.0	The great mortgage gamble that more than a million families must take. So what should you do?
0:20.0	Also today the top 50 house price hotspots.
0:22.8	Does your area feature on our definitive list of neighbourhoods where values have soared?
0:27.4	Plus the UK stock market is cheap. But will investors who back it finally get luck on their side?
0:32.7	Asked Simon. Crain is back on the case, this time in search of hundreds of thousands of lost avios points
0:38.4	and the unlikely cars becoming classics in 2023.
0:43.0	Don't forget you stop to date with all the latest breaking money news.
0:45.9	Just go to this ismoney.gov.uk or download the app.
0:50.1	Don't forget. You can stay on top of what's going on in the markets by tuning in to the Digest and Invest Podcast by Itoro.
0:55.8	Go to your regular podcast platform and listen on the go. Digest and Invest by Itoro, the podcast for those interested in trading and investing.
1:03.0	But first, more than a million people come off their fixed mortgage deals this year, leaving them facing a rather tough choice.
1:09.5	They'll likely be paying much more soon after the Bank of England raised interest rates again last month for the 11th time on the bounce, driving up the cost of borrowing. So, do you lock into a long-term deal or hold out in the hopes that rates will come down in the near future? Experts are calling it the great mortgage gamble. I think they're just calling it mortgage gamble, but I like to ham it up a bit and calling it the Great Mortgage Gamble. I think they're just calling it
1:28.4	mortgage gamble, but I like to ham it up a bit and call it the Great Mortgage Gamble. Helen, what is
1:34.8	the current picture? Sure. So I think you've got to feel kind of sorry for anyone who's needed to remortgage
1:41.4	in the last year or so because there's been so much change.
1:46.0	If you look back to 2021, mortgage rates were at historic lows, you know, going below 1%.
1:51.8	But in the last year, they've really ratched it up.
1:55.0	So particularly since September last year and Liz Truss's disastrous mini budget,
2:00.3	which I feel like we always come
2:01.3	back to on this podcast. But one of the main effects of that was mortgage rates really spiked.
	...

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