What’s going to happen to interest rates? And what it means for mortgages, savings & more!

21:01But, you know, that's the difficulty is the tools, you're right, more often than not sit with government, but they also take an incredibly long time to be able to feed through. Cool. Anne says, should I transfer my stocks and shares to a cash ISA, especially as the national debt is increasing more than analysts anticipated, meaning the budget will most likely increase, reduce tax allowance and share prices will fall in the stock market?

21:27Martin Lewis:Well, so let's just do the basics then. The general theory is if you put interest rates up, because that means people can earn a better rate of return from saving, that means investing relatively is less attractive. It doesn't mean it's not attractive, it means it's relatively less attractive. I mean, the markets have continued overall to rise, even though we've seen this worldwide economic turbulence. Where do you stand on where sort of the markets might be over the next year or two on the back of all the stuff you're predicting, both in the UK and globally? Yeah, I think the uncertainty is definitely acting as a drag on kind of people's confidence at the moment.

22:07But actually, we've seen pretty resilient performance across a lot of markets here. And the UK actually is in a reasonable position for that for people here. Now, I have to be very careful, Martin. I'm going to stay in my lane. We have to avoid giving investment advice when we sit in an economics area of a bank. So I will refrain from kind of anything too specific on where people might want to put their money. But the general trend, I think, is we're going to have a bumpy road through to the end of this year. It doesn't look like the geopolitics is getting any simpler. But actually, the underlying fundamentals for the UK economy are pretty positive.

22:43And I think that will start to reassert itself as we move through next year.

22:47Martin Lewis:And of course, there's the old phrase, time in the markets beats timing the markets. You know, trying to get your money in and out to maximise it is quite tough. You're far better. You're investing for most people and certainly most beginners is a long term game. You're putting your money away for 10, 15 years and you should ride out all this short term volatility anyway, hopefully, if you've got a nice broad spread of investment. Right, I'm going to stop and say thank you to Jack. Jack, that's been absolutely brilliant and an education for me. Thank you so much. But now I need to go and play a theme tune and put Adrian to the test.

23:18Martin Lewis:So, Jack, thank you, mate. Much appreciated. Play the theme tune.

23:29Martin Lewis:I'm going to try and sneak this in early. Adrian, welcome to Money Mastermind. You've got 22 right and 43 wrong in this three-option multiple choice quiz, which means after getting it correct last week we are about to perhaps, it feels a bit like history play it Adrian, you are currently better than random chance you are just very fractionally doing better I'll enjoy it, I'll enjoy it I've had a spring in my step all week shopping a tariff top and using the little pieces to pick out what's going on so let's do this week's question disaster at Shea Childs You played that in a little too early. Let's cut it out and pretend we didn't do it.

24:10Martin Lewis:OK. He's given away where I'm going. Yeah. Disaster at Shea Childs. Adrian has a swanky new coffee machine with a dial that goes from one to a hundred. He assumed that was strength, but no, it was the number of cups. He pressed go, stepped out to meditate over Croatia and came back to a brown tide lapping up the skirting boards. Adrian decides, quite rightly, it's better to raid his savings than borrow at high interest. So he goes to the bank. Now cue the music. A mandolin plays. The lighting turns amber. A cat appears on the counter. The manager's chair swivels round slowly. Adrian, you come to me on the day of my daughter's wedding and ask me to release your money.

25:01Martin Lewis:You never invited me for coffee Oh, don't worry I've got 99 going spare and it's my money I saved it with you You fixed it with us Maybe I fix you I want my money Or I'll make you an offer you can't refuse I don't capisce I'll send Martin Lewis on you There we go, Adrian Very good All too soon Are you all right? I just got to stop doing both voices there. It was incredible. Or anyone want an audiobook read, I'm available. I'd love to do one. To Adrian, you need to answer this question correctly before I will help you out of your trouble. If you have a fixed-rate bond, i.e. just a simple fixed-rate savings account with a bank, under the usual rules, can you withdraw the money during the term if you have a home emergency?

25:59Martin Lewis:Can you withdraw the money under the term if you have a home emergency? A, yes, with all fixed savings types. B, yes, but only with fixed rate cash ISAs. C, no, not with either. So fixed rate savings, generally locked away. You have a home emergency. Will you usually be allowed to take the money out with all fixes, just with fixed rate cash ISAs, or not at all with any? I would suggest there's a few grey areas you've said first usually what does that mean there's also what it means is most of these in some cases it's based on banks terms and conditions so there can be anomalies but it's what the general trend is okay and I mean what's a domestic emergency who decides what's enough of an emergency I mean a coffee machine flooding I mean, that's first world concern.

26:57Your boiler flooding the place is different. So I think it's... No, I don't think it's any. Who's going to sit in judgment over what is a domestic emergency? So I'll say C. I don't think you can.

27:17Martin Lewis:So you're saying C, not with either. OK, so let's go back to the basic premise. When you get a fixed rate, the benefit of getting a fixed rate savings account is you're effectively locking your money away for a guaranteed rate of interest. And in times of uncertainty, certainly if interest rates are going down, locking in gives you, you know what you're paying. You don't have to monitor it. You know, you'd like to go away for three years. You get that rate for three years. That's the benefit. And the cost is the money is locked away. Now, where you are quite correct is there is no home emergency rules.

27:44Martin Lewis:There can be and some will have special rules for somebody, you know, terminal illness, but not for a home emergency. So then we're sort of defaulting to the more standard question, are you usually allowed to get your money out when you need it or not? Well, with the vast majority of normal fixed rate savings, the answer is no, you can't. Your money is locked away. Occasionally, there's one or two that allow it, which is that was my exception. And then I bring it to you and say, you're going to tell me with ISAs you probably can't. But with cash ISAs, the laws say they must allow you to access your money.

28:17Martin Lewis:The way you do it is you can close the account down. So you can't get a little out. You have to get it all out. You can close the account down. You will pay an interest penalty. So with the top one year fixed ISA at the moment, it's 90 days of interest that you'd lose if you took your money out. But you can always get your money out of a fixed rate cash ISA, which is why if you're choosing fixed savings, but there's a slight chance you might need the money, while there is a little bit of an interest rate hit, although if you were paying tax on your interest, a cash ISA would win anyway, You might want to fix cash ISA.

28:48Martin Lewis:To give you examples, top one-year normal fixed rate, GB Bank 5.05%. Vanquish Bank is the top fixed one-year cash ISA at 4.84 % with a 90-day interest penalty. If we went for three years, the top fixed savings is Kent Reliance at 5.16%. The top fixed rate cash ISA is Oldermore at 5 % with a 180-day interest penalty. So the key thing is if you're fixing and there's a tiny chance I might need the money, you might want to sacrifice a little bit of interest so that you've got to get out of jail free card with the cash isa. But you, Adrian, got it wrong. Sorry, mate. OK. Happy to be of service, though.

29:26I think we've clarified things nicely. And we'll be coming into savings in a moment.

29:32Martin Lewis:Did I jump the shark, Adrian, on the mastermind question? Did I take it too far? Not quite. Not quite, but you're verging on the shark jumping. I've not quite jumped it yet. Exactly, exactly. Just for the telus, this is the most expensive thing you've got, which you've never used. Can I just tell us my one telus? Of course you can. There's some really good ones. When I had more money than cents, I wanted a leather jacket. And somebody I knew said, I know a bloke who makes leather jackets. So I went to this place in the east end of London. Sounds like a set-up for Matthew Martin. He had mountains of leather.

30:06OK. And I said, I want a big leather jacket. I measured me up and said, I want it quite big. Anyway, what kind of leather? I want the thickest, you sure? I want the thickest. Anyway, I've got this leather jacket, beautifully lined, looked fantastic. It's so heavy, I can't wear it. Literally, I need somebody extremely big, bigger than me, and much stronger. It is actually a workout wearing it. It is like a, it stands there as a metaphor for just having more money than you know what to do with, which I did for a short phase, certainly haven't now.

30:41Martin Lewis:What have you done with it? I'm waiting to find somebody big to give it to. I think you should auction it for charity, Adrian. There you go. Okay. I'm not sure if I could carry it down the post office. Well, I used to drive a motorbike and those jackets, you know, and they were armour in them. So as soon as you get off, you're like, I can't move anymore. I need to take this thing off. I can't do it. Let's take Cal. A Burberry jacket I bought as a goal to lose weight and realised now after losing weight, I'd never want to be that slim and my shoulders are too big anyway, and I kept it because I spent money on it.

31:13Martin Lewis:I don't understand the logic of the last bit, Cal. I don't know. I kept it because I spent money on it. Surely returning it, selling it, putting it online, giving it to a charity shop. You bought a jacket that was not your size, and by the sound of it, it was never going to be your size. There's quite a lot of illogic in some of these. I'll do one more. James, hot tub. Bought it during lockdown. Waste of money. Too expensive now to use due to electricity costs skyrocketing. They use a lot of energy. Needs constant maintenance. to balance chemicals and clean. But we've got some interesting ones where people sort of did the right thing, then it went wrong as well.

31:48More of your savings and investment questions. Craig's, with more of a statement than a question, mortgage rates will increase steeply and quickly in response to Bank of England rate rises. Saving rates will increase slowly and not in proportion with Bank of England rate rises. This is an off-stated bug there.

32:04Martin Lewis:We've got mortgage broker Monty on to talk about mortgages later. But I think so I often see that. And I think in the generality, it's correct. Mortgage rates, when interest rates go up, they go up, they go up pretty quickly and they go up by the full rate rise, if not a sneak a little bit more. Savings rates don't to an extent. But what we have to differentiate in savings is big high street banks, average rates are already absolutely pitiful. They're already way too low and they tend to be relatively slow to rise or they put them up because they're 1%. So they put them up to 1.25%. Where you see much more granularity, flexibility and more immediate reactions is in the very top accounts, which I focus on.

32:51Martin Lewis:That's what I'm looking at all the time. What are the top easy access accounts? What are the top fixed accounts? and the top easy access accounts tend to be pretty competitive and will go up if interest rates go up, almost certainly by the full amount very quickly. But it might not be the same top accounts once interest rates have gone up. So if you see what I mean, let's say the top account is 5%, the top account a week later after an interest rate rise, if it's gone up by a quarter percent, will be 5.25%, but it may not be the same provider. The 5 % provider might have gone to 5.15%. A provider that was at 4.8 % might decide this is the opportunity to be the best buy will go to 5.25.

33:26Martin Lewis:So individual accounts at the top end may not move with the full range. But what I tend to find is the very top account does move with the full range. So you've got to be on top of it. Neil, I have some money to put in an ISA. Should I lock in now or wait for rates to go up? 5.25 % is offered to lock in five years now. Well, I mean, if you're locking in for five years, I'd also suggest you have a quick look at whether you should be investing it. It depends what you need the money for, because five years is a long period. But to answer the question. This goes back to what I said at the beginning.

33:57Martin Lewis:The fact that the markets are currently thinking there will be four base rate rises over the next year is partially factored into the rate you can fix at today. Not all of it is because if you think of it almost as a certainty curve, how certain are they of the rate rises? So they price the level of certainty with the prediction and that's priced into the market. So if we did have a rate rise next month, you might find fixes go up slightly, but they won't be going up a quarter of a percent, the top ones. They might be going up by 0.05 % because most of that rise is factored in, but not all of that rise is factored in.

34:31Martin Lewis:So you can lock in at a better rate right now than you can leaving the money as easy access. So actually your question is, is the extra that I can get by waiting if interest rates do go up, will that overtake the amount I'm losing in the meantime by sticking it in easy access because easy access is paying less than a fixed rate. I honestly think, and it's guesstimate because clearly I don't know what's going to happen to interest rates because it's a market move and anything can happen in the world. I don't think we're going to see, you'd see that much of a difference. And if you were to listen to Jack, who we had on before, and I don't know he's right, other banks have different views.

35:10Martin Lewis:Jack says they're not going to go up as much as the markets think. And as much of that rise has been factored in. If he's right, you're better to fix now when it's factored in rather than when they discover it won't happen. But I think it's a very close decision. If you want to lock your money away, get a decent rate of interest. The rates are pretty good right now and certainly far better than they have been. I've got a graph in front of me that I prepared for doing this, which shows me fixed rates over the past few years and how they've gone. And the fixes are at the highest point you've been able to get since, well, since at least 2025.

35:43Martin Lewis:I mean, back in 2025, you're fixing at 4.25%. Currently, you're at 5.25%. So 4.5 % to 5.25%. Rates are good. You might just want to go for bird in the hand. OK, Valicia says, my son's just got his first property, fixed five-year mortgage at 4.1%. Wants to know if he's best to overpay into his mortgage or save into an ISA. So the general rule on mortgage overpayment versus savings is if the rate of your mortgage is higher than the rate you can get after tax in savings, you're better to overpay the mortgage. If the rate you can get after tax in savings is higher than your mortgage rate, you're better to save.

36:27Martin Lewis:Now, a couple of obvious caveats there. Always have a cash emergency fund so that you could pay a few months worth of bills and check there aren't any overpayment penalties. Most people can overpay 10 % of their mortgage amount each year, So that should be fine, but do those checks. A 4.1 % mortgage is a lower rate than you can get in a cash ISA, which is tax free. So you can get cash ISAs up to 4.8 % at the moment and you can fix them at higher than 4.1 % as well. So on that basic maths, the answer is you would be better to save. I would want to make sure, though, especially if your son has just got a mortgage, I would guess his loan to value ratio is high.

37:07Martin Lewis:In other words, he is borrowing a high proportion of his house's value. When he comes to remortgage, if he has reduced his loan to value, he may be able to get a better mortgage deal. Every 5 % can make a difference, 5 % of the total mortgage amount. So while saving in the meantime when he's locked in is fine, because he'll probably earn slightly more than he would reduce his interest by overpaying, I would want to have that money handy to overpay at the point or near the point of remortgaging because it could reduce his overall borrowing. We don't know what his next mortgage rate would be and that could have a much bigger impact.

37:45Martin Lewis:So in the short term, based on what you've told me, not looking at wider circumstances, saving would, as long as he goes for the top rates and he's moving them every time the rates drop, saving would outpay overpaying the mortgage in his scenario. Rachel, savings. Facebook is rife with all these investment ideas. They keep pushing. Some with very famous names. I can see your head shaking in my peripheral vision. How do you know which ones are legitimate and which ones are? I treat them all as rubbish, but curious to know if there are any good ideas in principle, or is it best just to stick to normal savings and stroke investment schemes through banks?

38:19Martin Lewis:Do not touch them with a barge pole. Look, as the man who the best worst compliment I get is I am in 46 % of UK scam adverts, feature my face and name, right? Which is damned with hideous praise. Most adverts with celebrities in telling you to invest, whether it's for Bitcoin trader, nothing to do with Bitcoin, by the way, it's just a scam. Whether it's for quantum AI, nothing to do with AI, it's just a scam. You get my point. All of these things, social media advertising is rife. There are no regulations in place. It's being consulted on. I campaigned to get those regulations. There are no regulations in place.

38:56Martin Lewis:I would not touch with a barge pole I would not even click with a barge pole and that would need a very big computer to be able to do it at the far distance one of these adverts if you want to invest or save you go through a legitimate information source you find it that way and you don't touch them I don't know off the top of my head I may be wrong because I haven't checked this out any legitimate investment platform that is particularly using celebrity faces to advertise because I think they would know that that's what the scammers do so it would just look like their legitimate advert was a scam.

39:29Martin Lewis:The best rule when it comes to advertising on social media is assume it's a scam unless you can manifestly, materially and deliberately prove otherwise. Always start with the assumption it's a scam. And that is terrible for real advertisers on social media. But until the big social media platforms clear up their act, then I have to tell you the only thing you can do to be safe is assume every single advert on social media is a scam unless you can manifestly prove it isn't.

39:59Let's get on to the mortgage questions then. Have we got an expert? We certainly do.

40:05Martin Lewis:We've got the one and only Monty from Coraco Mortgages. How are you, Monty? I'm fine, Martin. Friend of the show, friend of the podcast. We're delighted to have Monty on. Adrian's got loads of questions. It's a pleasure. Okay. This is Andrew Montlake, I should say. I don't feel I know him well enough to call him Monty. He doesn't call me Monty. All right. Thank you very much indeed. OK, Christina says, My current mortgage deal is at 2%, ends in February 27. Shall I look for deals now and suffer the penalty or wait closer till the end of the deal? And most importantly, what length of a fix should I go for?

40:40Neil, my mortgage was under 2 % and is up in December. Do I lock in now? Do I fix for a couple of years in the hope it goes down or do I bite the bullet and go for a five-year fixed?

40:51Martin Lewis:So basically, these are all people saying, you know, I'm panicking, rates are going to go up. Should I get out of my fix now before I can fix the higher rate? But there's a way around that, isn't there, Monty? Basically, you can lock in a deal now without actually switching to it now. Yeah, absolutely, Martin. And we encourage all our clients to speak to us six months before their rate expires, because that's the time when we can really have time to look at the whole market, compare what your existing mortgage lender is going to be offering you, compare that to the whole market. and we can actually fix into a deal now at that time.

41:27And then what we do is then we also look at the market going forward up until about a month before that rate expires at the end of the product term. And if something better comes along, we can move on to that. I would say six months is a magical time to actually start looking.

41:45Martin Lewis:And that's both with going for a new mortgage deal and a product transfer, which is where you get the same mortgage from your existing lender. If people do, I mean, I tend to think of this as an insurance policy. You get your fixed rate now and that ensures you lock in so that you've got that option of that fixed rate now. And that ensures you so that if the market moves against you, you've got a decent rate. But if it gets better, you can get rid of it. There can be a cost to getting rid of a fixed you've booked, can't there? There can be in some circumstances. And it's always important to look at the small print.

42:13With a lot of lenders, though, now, if you do lock into a product now and then you change it, there isn't a cost. so you just have to watch out for where they can be there can be a small admin fee but definitely don't actually physically accept a product transfer because then sometimes they can't be undone once you have actually physically accepted product transfer with your existing lender yeah

42:39Martin Lewis:it's good this is a good good reason to talk to your mortgage broke about it let's just finish that second part of Neil's question he said do I fix for a couple of years in the hope it goes down or do I bite the bullets and go for a five-year fix? Well, I mean, five-year outlook on interest rates, we didn't quite get into that, is still relatively high. Where would you be? I mean, I always talk about fixing as how much do you value certainty. The more you value certainty, the longer you fix for. Would you be pushing people to two or five-year fixes right now? I think pushing people to anything is actually the wrong phrase.

43:07Martin Lewis:Would you be suggesting when you've looked at the facts that people... Come on, Monty, play the game. ...two or five-year. I didn't mean to besmirch your professionalism. Sorry, mate. I think it's a really interesting question at the moment, actually, because if you look at interest rates now, mortgage rates, actually, the variable tracker rates are much cheaper than the two and five year fixes. So we always have a conversation with people around their attitude towards risk. Are they someone who's going to be lying awake at night before every Bank of England base rate announcement and sweating that rates might go up?

43:41Or can they actually afford to take that gamble that actually rates might not go up? I mean, the best tracker rate at the moment you're looking at is around about 3.99, whereas the best two year fix is about 4.69 and five year fixes at 4.86. So there's quite a big differential there. So, yeah.

44:01Martin Lewis:So if we take that on what Jack said earlier, I don't know if you heard, he was our economist. He was saying, you know, the markets have got four rises. So if the markets were right, your variable tracker would be at the end of the year slightly more expensive than the cheapest fixes. But if they're wrong and Jack was saying they wouldn't go up that much, then you would have done better staying on the variable tracker. But you're right. It is about how much you can sleep at night if you did that. Yeah, I like the security of the fix personally. I'm quite a five-year fix man because I like to know that actually my payments are going to stay stable throughout that.

44:40Then I don't need to worry about what's happening. And if anything, the last five years has really taught us is to expect the unexpected. Yeah. Let's move on to Laura's question. I feel a bit sorry for Laura. She says, my lovely 1 % fixed rate is up at the end of November. The current rate I've been offered is 4.99%. Oh, Laura. I'm probably looking at more than£200 a month. It's just the way – it's not even a question. It's just a lament.

45:08Martin Lewis:I have to say – and she's not alone. I did a poll on this on social media recently. About 10%, 12 % of people – we're basically at the five-year point from the cheapest mortgages. So all those five-year mortgages that people locked in at 1%, 1.5%, 2%, percent there's it's about 10 percent of mortgages they're coming to an end and these people are going it's going to be a big change isn't it i presume it's a lot of people coming into you at the moment in that scenario loads i mean you're exactly spot on five years ago you could actually get a five-year fixed rate at just under one percent and that is how the market has moved so we see a lot of people coming to us a little bit worried about how much their mortgage is going to go up.

45:50There are various things that we can do to assuage that. You can look at the mortgage term, maybe extend it. You can look at potentially putting part on an interest only basis, part repayment. But you do have to look at that carefully and get advice. You don't really, I mean, it comes with cost.

46:08Martin Lewis:Well, they do. I mean, so just if you increase the mortgage term, you're spreading the length of the debt and spreading the length of the debt means you pay more interest because you're paying it for more years. I mean, we always try, you know, We were talking before about overpaying your mortgage. Overpaying your mortgage means you clear the mortgage quicker, so you're paying interest for less time, so the total interest is less. So those are only things, I think, for people in trouble. If you can, what I would strongly suggest to anybody out there in this position, I mean, first of all, Monty's six-month rule is the same as mine.

46:35Martin Lewis:Six months before is when you need to start looking at this. But even if you're a bit further out, go onto a mortgage calculator now, put in a rate, let's say 5.5%, They're taking as a random middle rate. And look at what your increased cost would be at that rate and start to think about how you're preparing for it, how you're going to be able to deal with that, whether it's going to be a hit or not. Earlier knowledge, I mean, while you won't like the answer, it might not be as bad as you think, though. Sometimes it isn't as bad as people think. So I'm going there. Rachel, I'm going to track a mortgage after my last fixed rate deal came to an end.

47:08And I don't want to lock myself into a fixed term with early exit fees because I might be moving. I can absorb a little bit of rates rising, but if we're expecting things to go up significantly, is it worth staying put and locking myself into a deal to ride out any upcoming turbulence? Monty? Yeah, I mean, that's the same sort of question, really. It depends. What I'd be looking for is how many rate rises could you tolerate and when does it become an issue? There are some tracker rates now with something called a drop lock option where you can get onto a tracker rate and then if rates do go up, you do have the option of potentially fixing into a fixed rate at a certain point in time without penalty.

47:49So that might be a potential option. But if you are very worried about if you can only maybe stomach one rise or maybe two, you might want to start comparing the fixed rates now. Maybe a two year fixed rate might be a good option.

48:02Martin Lewis:And also, I would suggest, Monty, you know, she's on a track of mortgage, but we don't know what the rate of your track of mortgage is. We don't know how good that track of mortgage is. you might be able to get a better tracker mortgage, which is, I mean, and always when it, because mortgage is such a big financial transaction, it is always worth the check. The check doesn't cost you very much. There's lots of, you know, comparison sites out there. Doesn't mean you'll be able to get all those that are listed on there just to get an idea of what, how yours compares to anything else.

48:32Martin Lewis:Hello, we're now in the pod only section of the pod, but I'm joined by Monty is still with me. Hello, Monty. Thank you. And of course, we've got Podjuicer. Podjuicer, as I'm now calling him. Podjuicer, Simon. Our promotion. No, it's just, I just brought two words together. Podcast producer and made it Podjuicer. I tried it on the Question Time podcast. Matt didn't like it. He preferred being prod center as opposed to podju. But I'm going with Podjuicer for you, Simon. Well, he's got more diva qualities than me, Matt. That is very true. There's no denying that. So we'll get on with some more mortgage questions as well.

49:08Martin Lewis:We've got Monty here. June says, my 1.75 % deal ends the 2nd of November, then it's 7%. Wow. I owe£39 ,500. So she must be going to the standard variable rate, I think, which we always want to try and avoid. I recently went from full-time to part-time due to ill health. I'm 62. I've got£40 ,000 in ISAs. Should I ask for a new deal or should I use one or two of my ISAs in April to pay off my mortgage to free up much needed monthly income. Now, this is a me as well as a you question, I think. Yeah, that's right. Let's start with you on what do you think her mortgage options would be? I mean, clearly she's had a drop in income because of her ill health.

49:48Martin Lewis:Will she be able to get anything better than the standard variable rate? I'm very aware. I'm asking you blind. You can't do a fat fine. But just a broad brush. Yeah, I mean, broad brush. So first of all, it's about approaching existing lender and finding out what product they would potentially transfer her onto. That's the first point. As long as there's still time in the mortgage term, as long as the mortgage term isn't ending, then if there's another five years left on the term, for example, they might be able to push you onto a retention rate. Elsewhere, if you do have to remortgage... So that's a cheaper rate, not cheaper than standard variable.

50:24Potential cheaper rate. You will be able to find a cheaper rate than the 7 % undoubtedly. Age is a factor. 62 is not too much of an issue. A lot of lenders now will go up to age 70 or 75 as long as there is income. The fact that there's an income... Sorry for me.

50:42Martin Lewis:I'm not meaning to pick apart. No, no. When you say go up to age 70 or 75, is that the point you start the mortgage or the point you finish the mortgage? The point you finish the mortgage. So your term would need to end by age 75, say. Correct. So if you're 62, a 13-year term would be maximum. Yeah. There are lots of other options, Martin, because there are lenders who have no end date in terms of age. There are equity release mortgages. There are later life mortgages. So there is a lot of choice. But the mainstream still lasts until term up to 75. Yeah, in general, in general. And the fact that there's been an income drop, again, not necessarily an issue, because most lenders will look at around about four to five times income.

51:26So as long as it still fits that criteria, then there should be a lender out there for you. And it is important to do that as early as possible because you don't want to fall onto that 7%.

51:38Martin Lewis:So if she's earning 10 grand, she should be fine even because it's a£39 ,500. OK, then I would go the other way. And we've already talked about this a bit so far. And I would say that, look, the standard maths is if the mortgage is more than four and a half, five percent and you've got the cash in the bank, you might just want to consider getting rid of it, getting rid of the mortgage, because at that rate, it's better to overpay the mortgage than it is to save. Have you got any negatives to that? I mean, sometimes some people talk about keeping a few hundred quid on the mortgage just for the mortgage deeds and that type of stuff.

52:12Martin Lewis:Is there any reason you wouldn't pay off the mortgage, Monty? No, I would actually agree with you there. It's about doing that mass calculation. And I think the days of just keeping a little mortgage there for the sake of it, I don't think that's as relevant anymore. Yeah, so my view would be, look, you might want to have a look what mortgage you can get. If you can get yourself a relatively cheap one, then it can be worth keeping the money in savings rather than getting rid of the mortgage. It sounds like you've got that size, as you might have some other savings too, and it will free up your monthly income if you don't have a mortgage to pay.

52:44Martin Lewis:so there's quite a strong argument here for overpaying and getting rid of that mortgage deal certainly if you're going to go to seven percent you're way better off to get rid of that mortgage deal but if you could get a cheaper mortgage again it goes back to that equation mortgage rate versus after tax rate you can earn on savings if the mortgage rate is higher you generally want to clear the mortgage with all the caveats i mentioned earlier let me move on to the next one for you Sally says my partner and I are looking to buy a joint property as we both have a property each that we will rent out taking out the equity of our mortgage properties to fund the deposit on a new house is it wise to buy now when the properties we're interested in have come down in price but the interest rate is really high but as it's a buyer's market and we don't need to sell it works in our favor apart from the hefty stamp duty on the second property so I mean it's very tough advising on mortgages is easy advising on what's going to happen to house prices isn't as easy where are you so i'm actually i always come from the buy when it's best for you to buy and and actually i i do agree actually i think it is a buyer's market and i think you can wait for ages for interest rates to change and they might change in the wrong direction meanwhile if they do come down, what happens?

54:00The market gets more stimulated and house prices probably rise. So actually, you're probably in a better position now to buy and take advantage of the buyer's market than actually wait for interest rates that may or may not fall.

54:14Martin Lewis:Just a thought. We were talking earlier that the markets are pricing in four quarter percent rises, so one percent over the next year. How much of that would you say has been factored into the rate that you can fix that right now? And how much room is there for those fixes, if that were to happen, to continue to go up? I think a lot of it has been priced in. If you look at the swap rates, which I will term the future cost of funds upon which lenders base their fixed rates on, at the moment, you're looking at five-year money is around about 4.7%. So that means that actually it's already factored in those four rises.

54:56So the mortgage rates you can get now, which are around about 4.8, 4.9 percent, a lot of that has been factored in. There is room for a little bit of growth. But if the next rise is up, there's no reason that swap rates will then go up again because they've already factored it in.

55:16Martin Lewis:I mean, November, there are 80, 90 percent certainty it's going up in November, you know, a quarter of a percent. So, I mean, that's already there. Yeah. Yeah, it is already there. So I suspect that actually I don't think they will increase interest rates, but that's just my my own personal view. But I think it's already factored in. And the Bank of England base rate, whether that increases or falls, does not necessarily dictate that mortgage rates will increase and fall because of that, because all the rhetoric has already been said and the markets have already moved. And now I'm going to finish on this one.

55:51Martin Lewis:I'm sorry, Wendy, I never like when I read this one because I think it's slightly disingenuous to young people. It's Wendy says, the mortgage interest rate will never be as high as it was in the late 80s. 5 % is cheap in comparison. For me, that's true about the mortgage rate, but you can't look at the mortgage rate in isolation of house prices. And the house prices are massively more, a massive multiples of typical earnings than they were in the 1980s, which actually means the proportion of income that people are spending on their mortgages now, even with far lower interest rates than in the 80s, is still as high, if not higher.

56:28Martin Lewis:I mean, you're very considerably older than me, Monty. Do you remember that time? I'm much older. How old are you? I think we're probably about the same, aren't we? If it's not a personal question. Yeah, come on. I think I'll be 57 this year. OK, so you just I'm 54, so I have a few years. But yeah, we're probably working in the late 80s. But it is. I'm right. It was a it's a totally different scenario, isn't it? It's a you're spot on. The real key step there is the earnings ratio to mortgage costs. And that actually has gone up massively. So it's very different. And the proportion of earnings that people are spending on mortgages now because house prices are so much higher.

57:09That's really what you need to look at. But that's not saying it wasn't tough then.

57:14Martin Lewis:No, but to say it isn't tough now because rates are lower is not looking at the whole picture. There's also a thing about, I always think, financial elasticity is a very weird type of elasticity. When prices go up, it's not the same as when they come down. And so when you've had interest rates at 1 % and your finances have been based around that and you have to move to 5%, that is a massive hit psychologically and mathematically to the finances that you have. So on that basis, I don't know. Wendy, I don't think, was being antagonistic on this. I've seen a lot on social media. Oh, you don't know what it was like, you youngsters.

57:48Martin Lewis:And it's just not a fair comparison, would be my view. No, I totally agree with that. So I do say that actually, historically speaking, we're now in a more normal period. If you look at the Grots before the credit crunch in 2008, 2009, we're around about the same place. as we are now. So I'd say the market now is a more normal market. We can expect more of the same going forward. Absolutely. And of course, for savers, on the other hand, the hugely low interest rates was an absolute nightmare for those people who planned to put money away in savings and to live off the interest. And so all of it balances around in that direction.

58:26Martin Lewis:Monty, or more formally, Andrew Monlake, Managing Director of the Mortgage Brokerage Coraco. Thank you so much for joining us, mate. Thank you for having me. Pleasure. Martin, can I just ask you a quick question? Sure. We talk quite a lot about sort of mortgages and savings, but what about loans and credit cards? So they tend to be less reactive than mortgages and savings, which move quite quickly. Most personal loans, in fact, all personal loans are fixed rate, so that the rate you get for your five-year loan is locked in at that time. We've already seen the cheapest loan rates shave up very, very slightly.

59:02Martin Lewis:I mean, not that anybody would notice unless you do it for your job. I think there's probably a little bit more room to go. So if you were planning to get a personal loan, make sure you get the cheapest, you do it right, go through an eligibility calculator, make sure it's planned needed for borrowing, or my usual caveats, I would probably be looking to do it sooner rather than later, is what I would say, based on where the markets are. I think we could see rates go up a little bit, but not massively. Credit cards, it's much more complicated. You've got to remember, a typical high street credit card is now around 25 % interest.

59:33Martin Lewis:I mean, that's so much more than the base rate that a quarter of percentage base rate move that doesn't really affect it what i suspect we will see if interest rates go up further you know if those the ones to factor in carry out we might see zero percent lengths getting a little bit shorter we might see fees on balance transfers getting a little bit higher i don't expect to see a massive shift in the market i think the market there will be more driven by competitive moves you know companies battling off against other companies rather than by changes in the base rate at a main level and the aprs that you pay well anyone who's paying the rep apr you're not doing your credit card right in the first place if you're on that 25 i don't see those moving much because they've come up so so much in the last five six years anyway they used to be 18.9 they're now 25 standard so i doubt there'll be that much change i think that's probably where we finish on interest rates

1:00:29Martin Lewis:let us finish off the tellers we touched on it with adrian we had so much to get in the show we didn't do so much and we've had such good ones we've got a list i've got the list in front of me have you got them as well i do yeah i'm primed and ready okay so i'll start with deborah the tellers remember is what's the most expensive thing that you own that you've never used and why do you have it or don't use it deborah it's not the most expensive thing i own now but it was at the time. I bought a Louis Vuitton bag that I used once and have never used again. Still in its original bag and packaging, I just can't quite bring myself to sell it.

1:01:03Martin Lewis:35 years of not being used. I don't know, do bags go up in value? I think certain ones do. Do you think vintage bags? I think certain ones do, yeah. Isabel has joined me as she will be fact-checking the Question Time pod that we're about to record next. Isabel, do you know anything about vintage handbags? I do not. No. No, Isabelle's no use either. But you never know, Debra, you might be sitting on a gold mine. I mean, you should be sitting on the bag. That will break the leather. But you might be, you know, it might be worthwhile. What have you got? Well, I was going to give you mine, actually.

1:01:33Martin Lewis:Oh, a Simon one. Yeah, well, so just as it turns out, we're speaking the week of my wedding anniversary. And I was chatting to Blinda about this. And she pointed out she bought some very expensive shoes to wear for our wedding. These sort of high heels. But then as it got closer to the time, she sort of came to the conclusion that basically she could stand up in them and they'd look great for the pictures, but she couldn't actually walk in them. Yeah, fair. So she then sort of sacked them off. I have very similar issues with my heels. Yeah, exactly. Yeah, yeah. So, I mean, but they are, so they've never been worn and are still up on Vinted and available, I think.

1:02:05Martin Lewis:Okay, fine. You've just broken BBC producer's guidelines, advertising products. You haven't given me a gap. We're all right. No gene and no blues. I like this one. A telescope. I don't use it because I don't like staying up late to use it in summer and I don't like being cold to use it in winter. Yeah, not the best buy there. Martin, this one's from Martin. He asks, do insurance policies count? Yeah, really interesting. And I saw quite a few in the responses about insurance policies. I haven't put the rest in, but I have put this one in. You see, an insurance policy is really interesting. The question is, what's the most expensive thing that you own that you've never used?

1:02:40Martin Lewis:And what counts as you? Insurance is a policy you deliberately buy in the hopes that you won't use it to be there to protect you if you do. So it's a bit like saying, you know, if you buy a protective jacket and you were to go to a war zone, was it a waste of money in the fact that you weren't shot, to put it in a really horrible analogy? And the answer is clearly no. So I'm not sure. I decided not to count insurance into the way that this works because I just think it sort of... You're hoping it'll be a waste of money. Well, it isn't a waste of money because you've got the protection. The fact that nothing's happened is a good thing.

1:03:19Martin Lewis:So I think it's a slightly different psychological area to what we're talking about. Wagon wheel I'm going to move on to. Tag her watch. Worn it once. Bought it because it looks good but afraid of damaging it. What's the point? Just, you know, be safe. Don't wear it somewhere where someone's going to see it and nick it. But you've got the watch. You may as well either sell it or use it. There's no point keeping it in the box for no reason. That is exactly the sort of person I am. Yeah, I just... I'd be so crippled by that kind of... That's why I wouldn't buy that sort of thing, because I know I wouldn't be able to enjoy it.

1:03:50Martin Lewis:I think you should wear it on special occasions. You should take it out. You should just go and enjoy it. You've got it. You've put the money into it. I mean, listen, it might appreciate in value, but otherwise not. You do Deb next. Yeah, air fryer. I bought mine thinking it would make my life easier. I struggle with cooking as I'm disabled. Unfortunately, I hadn't thought about the fact I don't eat fried food and now can't think of any use for it. I suppose it'll be a standby if my halogen oven bowl breaks. I think I need to do an intervention here, Deb. I need to be honest. I think I need to do an intervention.

1:04:21Martin Lewis:I mean, an air fryer, the name is a misnomer. An air fryer is basically a hot air circulating mini oven that, you know, you put a little bit of oil in there to help things cook, but it's not really frying. It's basically a mini oven. And if you are cooking small amounts, it can be a lot more efficient and cheaper than putting it in your main oven, just because you're cooking smaller amounts for less period and therefore the wattage isn't as high, and it can be a really efficient way to cook. Where I tend not to suggest using air fryer is if you're cooking a big dinner for lots of people, in which case putting it all in one heated oven will tend to be cheaper than time after time after time in the air fryer.

1:05:01Martin Lewis:So you may be misjudging your air fryer, I suspect. I think your air fryer may not be what you think it is. And maybe as you've got it and you've not used it, it's worth trying it. And you might just go, ooh, that is easier, you know. You don't have to use that voice. You can use any voice you like. Go, let's do a couple more, then we'll stop. Dan, he says, bean-to-cup coffee machine. Just too much time and maintenance. Far easier to just boil the kettle. Fair. Dougs, I have a signed limited edition Iron Man helmet. Nice. With Robert Downey Jr. signed it. It wasn't cheap and it's not a toy, so no playing with it.

1:05:34Martin Lewis:It goes a bit like to the insurance. I mean, you bought it to have it and to look at it, not to use it. But it's sort of looking at it. If it's an ornament, you know, if you buy a painting, looking at it, it isn't using it, but it sort of is using it. So I'm not sure it counts. I'm not sure it counts. And presumably he'll be covered of aliens. I've just read them. You do, Justin, and I'm going to finish on poppy. I like poppies. Justin says he bought an electric scarifier for my lawn. Do you know what a scarifier is? I do. It kind of churns up the... Basically, cricket grounds do it at the end of the season.

1:06:09That's how I know. To lean into my big interest that I bring up all the time, yeah.

1:06:16Martin Lewis:Yeah, exactly. Fair enough. Justin's scared to use it, so he always says I'll use it next year at his daughter's first house. And we'll finish on Poppy. A Dyson hairdryer,£500. I've got curly hair, so I can't use it. what on earth was I thinking now you see I totally get it we all make mistakes but why did you not send it back why have you not sold it why is a 500 pound hairdryer sitting in the drawer even if go and give a brand new unboxed Dyson hairdryer to your local charity shop they would be over the moon with it but I don't know we're a funny we're a funny species human beings we are indeed which seems a very good way to end it I hope you found it useful today I hope the interest rate stuff allows you to tool yourself up in the knowledge of what's likely coming over the next year or so and maybe tool yourself up to think, if I'm going to buy something, I should use those mantras before I do.

1:07:11Martin Lewis:Will I use it? Is it worth it? Have I checked whether it's available cheaper elsewhere? And if you haven't, don't buy it.

1:07:22Martin Lewis:And that is it for this week. We tend to put out a new episode every Thursday and Monday. The Monday is our question time podcast where you get to ask me absolutely anything and everything open brackets within reason close brackets. If you've enjoyed today's show, please tell your friends you've been listening to the Martin Lewis podcast and why not subscribe and leave us a review? Then your pockets will be pleased with you and we will be too. And if you haven't enjoyed it and you've been listening this long, it's your own fault. What did you do that for? We didn't make you. Bye bye.

1:07:58Martin Lewis:I got to pay, so I'm going to work for a while and never let. I got a house, I got a fee, so I'm going to make sure everybody eats. Martin Lewis is the founder of moneysavingexpert.com. But of course, other consumer and price comparison websites are available. You can get in touch with Martin's podcast production team by emailing martinlewispodcast at bbc.co.uk. The offers and rates mentioned in the podcast are correct at the time of recording. However, if you are listening on demand, it's worth double-checking as details can date. Remember to subscribe on BBC Sounds and leave us a review however you listen.

1:08:36I got bills, I gotta pay.

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