UK mortgage rates are not going to fall and will instead rise to over 10% by the end of 2025. This may come as a shock to a lot of people who follow mainstream money experts. What you are seeing at the moment is politicians in the UK doing everything they can to push these hikes back past the 2024 General Election. The Govenment don't want 10% interest rates before people head to the polls, but they are coming.
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"This article is our opinion; we are not regulated or qualified to provide mortgage advice. Please do not treat any information in this article as mortgage or financial advice."
They said interest rates were going down
As far as we know, nobody regulated or qualified to give mortgage advice has said that rates are going down.
You are right though, for the last 18 months, the line that rates would drop has been repeated as though it is fact. Almost everyone in the mainstream has parroted the line that rates were going to be coming down in 2024. In our opinion, you have been misled by the UK media. It’s impossible for us to say if each individual who repeated it did so deliberately or through naivety, but for all of these so-called financial experts on the media not to have spotted what’s coming is inexplicable. To us, it is clear rate hikes are coming, and they will be property ending for most people. We’ve been shouting about this to anyone that will listen for over 2 years.
Here is why interest rates are going to go up and up
Politicians and commentators will always try to make it sound more complicated than it is, but underneath it all, it’s very basic economics. The more demand there is for something, the higher the price, especially if the supply is tight. Right now, cash is in demand and its supply is very tight. Every government in the Western world is borrowing and spending as though they are playing a game of Monopoly. That means they are competing for cash with mortgage holders and zombie loss-making companies that have never made an operating profit.
How To Stop Rates From Going Up
There are two ways to stop interest rates rising. The first is to tackle the demand for cash. Our government needs to stop spending money that they don’t have and live within its means - but only by doing this for around a decade will we see any benefit, it’s a long haul. The second is for the Bank of England to manage the supply create more money.
1
Stop Government Borrowing
Politicians can’t stop spending; in our opinion, the days of serious politicians have long gone. There is nobody in any of the major parties that is willing to tackle government spending.
According to the ONS - The UK Government is currently borrowing almost £40bn every 90 days, this is unsustainable. and the total national debt is £2.639bn. That means in 2024, the overal interest of Government spends on interest payments is in the region of £130bn and that figure rises by £30bn with every 1% that interest rates go up.
2
Restart The Magic Money Printers
That leaves the second option of printing more money – sometimes known as quantitative easing. Unfortunately, the Bank of England can’t create more money because that will accelerate inflation back up over 10%.. In a sane world, restarting the money printers like they did in 2020 should be out of the question.
What will they do?
In our opinion, the Bank of England may try some limited money printing, but inflation will accelerate again and people will complain, so they will quickly stop that.
After they have tried everything else, the Bank of England will raise rates to try and stop inflation and also attract cash from foreign investors. Though that is going to be difficult unless rates are well above the rate of inflation.
No matter what the UK does, interest rates are going to have to rise by a lot. If the Bank of England doesn’t put rates up, banks and building societies will just ignore the bank going forward and raise interest rates on their own; some have already started doing this.
The risk to the Bank of England is that if banks and building societies do start ignoring them, they will lose credibility in the eyes of the public. In reality, banks and building societies ignoring the Bank of England is how the system should have worked from the start; it has no business getting involved setting interest rates, the free market should be the one doing that.
This is why we are so angry with mainstream media pundits. There is no scenario now where rates stay where they are; to suggest they are going lower is silly. These pundits don’t seem to realize that the country is in a fight to save the Pound Sterling as a currency.
What should you do?
As we said at the start, we are not regulated to give mortgage advice. What we would do is to speak to a mortgage advisor and ask them about the benefits of being on a 5-year fixed-rate mortgage. The main advice we can give you is to stop listening to TV financial experts because they aren’t experts. People in the mortgage and loan industry laugh at them and their advice; they don’t have a clue.
The one piece of advice we would give everyone is to start questioning more, don't give blank cheques to TV personalities, they wouldn't last 5 minutes in the real world of finance. These people won't be around when you mortgage payments are late and you are about to lose your homes.
Finally, get your own spending under control and fast. There is still time to get your financial house in order before the storm comes, but you don't have long - a year at most.