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

What’s next for interest rates and, more importantly, what does it mean for your money? Martin is joined by an economist to look ahead at where rates could be heading over the next year, before a mortgage broker helps turn the forecasts into practical advice. Whether you're saving, borrowing, remortgaging or weighing up your next financial move, they'll explain how changing rates could affect savings accounts, mortgages, loans and more. Plus, in this week’s Tell Us, we hear your stories of the most expensive things you’ve bought and never used. From hairdryers gathering dust to hot tubs that became very pricey garden features, it's a chance to confess those purchases that seemed like a great idea at the time. And finally, Martin may have jumped the shark with this week’s Mastermind. A question about savings unleashes his inner thespian, and let's just say he might have enjoyed the performance a little too much. The real challenge is deciding whether the acting helps explain the answer... or completely distracts Adrian Chiles from it. If you want to ask Martin a question, you now can! His Question Time podcast lets you ask Martin absolutely anything and everything (within reason!). So, if you’ve always wanted to know what he likes in his full English breakfast, what his thermostat’s set to, or you have a very complicated question about your finances, email it to [email protected] mailto:[email protected].

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

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• 1:46Speaker 02

  We've got quite a big cheese.

• 1:48Martin Lewis?

  I mean, yeah, a full fromage answer.

• 1:50Speaker 02

  A full fromage.

• 1:50Martin Lewis?

  Will they change? When will they change? How much will they change? It matters today.

• 1:55Speaker 04

  I'll try not to be too cheesy.

• 1:57Martin Lewis?

  Don't worry, Martin will look after the cheese. 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. Hello, I'm Martin Lewis, and this is the cunningly named The Martin Lewis Podcast. I do wonder what that's going to be about. And this is our big topics episode, where each week we lead on one main subject to help you save. Usually, most of it comes from my BBC Radio 5 live show with Adrian Chiles. But there's also bonus money-saving tips and tricks just for you lucky, lucky podcast listeners. In today's episode, it's a big one. What's going to happen to interest rates over the next year? The mood music is they're going up, but how much by how certain is it? And when will they go up?

• 2:41Martin Lewis?

  And then how do you take that information and use it to make the best decisions about your savings, loans, credit cards and mortgages? I'm joined by an economist, I'm joined by a mortgage broker. We're going to delve into it and make sure that you are toed up with everything you need to know to get you through the next year. Then the tell us is all about what's the most expensive thing you bought and never used? Whether it's you were blown away by a Dyson hairdryer or sank in your own hot tub. And this week's mastermind, where I admit, I think I may have jumped the shark in the intro to it. I've got a little bit carried away with my test being side, but it's good anyway. It's a question on savings. Play the theme tune.

• 3:28Speaker 02

  Okay, so we normally touch on interest rates when there's an announcement of them changing. So, but which?

• 3:34Martin Lewis?

  Last week.

• 3:35Speaker 02

  We had a, we had one last week, but why now then?

• 3:38Martin Lewis?

  Because what I wanted was a sort of calm consideration of where we're going. The important thing to understand about interest rates, so when we're talking interest rates, let's take it back to basics, we are talking the Bank of England UK base rate. That sets the standard interest rate for the UK. But the fact it hasn't moved last week is probably less interesting than the fact that the vote was six to three. So of the nine members of the Monetary Policy Committee who meet every six weeks or so to decide what's going to happen to UK interest rates, six of them voted to keep it on hold. Three of them voted to increase it from its current 3.75% level, where it's been since December 2025.

• 4:19Martin Lewis?

  Now, what's important about people's predictions of where interest rates are going? Now, that was a signal that we have the mood music is upwards. And we're going to be talking to a proper economist to discuss that in more detail in a moment. But what I wanted to just make sure everybody understands is predictions about future interest rates are not just a crystal ball issue. They materially affect what happens today. What the markets think will happen in future affects the prices of products that you can get today in very simple terms. So the main area has a difference is if you are a bank or a building society and you are launching a fix, whether that be a mortgage or a savings products,

• 5:03Martin Lewis?

  you're trying to price it effectively at the interest rates over the period which the fix lasts for. And that's done by looking at what the swap markets are and where they can buy different types of instruments to do so. So the fact that the mood music indicates that interest rates in the UK are likely to go up over the next year, has a tendency to push the rate at which you can get a fix at up, both on mortgages and on savings. And personal loans are fixed too, and credit cards. And we'll go into the minutiae of how it varies in each one of those later. But that's the big picture. Why this isn't just a sort of naval game, oh, what's going to happen to interest rates? Will they go up or down? It matters today.

• 5:48Speaker 02

  Okay, we've got a guest here and you've, we've got quite a big cheese.

• 5:53Martin Lewis?

  I mean, yeah, a full fromage answer.

• 5:54Speaker 02

  A full fromage, chief UK economist at Barclays Bank, no less. We are not worthy, Jack Mealy.

• 6:00Martin Lewis?

  You're not worthy.

• 6:01Speaker 02

  Well, I'm not worthy, Martin is obviously, which is why he's come on. Jack, how are you?

• 6:05Speaker 04

  Yeah, very well, Adrian, thank you. It's, I'll try not to be too cheesy.

• 6:09Speaker 02

  Okay, don't worry, Martin will look after the cheese. We're well covered in the cheese department.

• 6:15Martin Lewis?

  And puns are, any pun will be grabbed.

• 6:17Speaker 02

  It's his middle name, so go on, Martin.

• 6:21Martin Lewis?

  Okay, so let's just break this down and go simply. Where are you at on interest rates? Will they change? When will they change? How much will they change?

• 6:30Speaker 04

  I mean, Martin, it's looking very likely now, given what's happening in the Middle East, that interest rates will change, that they will ultimately have to go up. And I think probably the most likely place we'll see the next increase will be as soon as November. We've seen a lot of signaling from the Bank of England that that's where their heads are at. And that's, you know, what we think now and what the market thinks now is most likely. Where my personal view would differ from the market, the market thinks that's going to be the first in a sequence of interest rate increases. So, you know, if I look at pricing on my, my computer screen this morning, it tells me that the market expects four 25 basis point increases. So a whole percentage point more on the short term interest rates.

• 7:11Martin Lewis?

  So is that sort of this time next year? So over a year, say it's expecting would move up from 3.75% to 4.75%?

• 7:19Speaker 04

  Exactly that, exactly that. So over the next 12 months, you will see one percentage point going up. Now, I think it's going to be much less severe than that. I think we'll maybe see one quarter point increase. May probably, if the Middle East continues through the end of the year, a second one early next year. But the market is running far ahead of that.

• 7:38Martin Lewis?

  So if I just bring this into my sort of more my area of this type of stuff I look at. I know, we're currently looking at, last week I said it was a 24% predicted rise in the price cap in January. It's come down a tiny bit, it's now looking at a 22% predicted rise. I mean, I think it's very likely it'll be between 15 and 30% when we get there. And that in itself would add, you know, 0.5, 0.6% to CPI inflation. And just to break this down for people, you know, when inflation is what the Bank of England is charged at keeping down. Inflation is a measure of how prices rise. And its main weapon for keeping inflation down is to put interest rates up.

• 8:19Martin Lewis?

  So wouldn't that signal it would be a bit stronger than a 0.25% rise?

• 8:24Speaker 04

  So the real difficulty the bank has, and you're absolutely right, Martin, you know, I would agree with those numbers you've just given about how much the kind of the recent moves in oil and gas prices will affect the prices people feel in the shops. But the difficulty is, is a lot of that is already baked in. That will feed through in terms of pump prices very quickly. But then ultimately it will fade out of those inflation numbers also quite quickly. So there is nothing the Bank of England can do to change that. It can't reopen the straight up moves. And if it was to jack up interest rates, 5% from now, it still would be able to do very much to change what's going to happen over the next couple of months. So really, they're worried about what's happening further out into the future.

• 9:08Martin Lewis?

  This is the question I've wanted to ask, and I put something on social media about this the other day. Wanted to ask a proper economist, because I'm a consumer finance specialist. And I know Adrian's got a question he wants to come in on. So my, on my basic, I've got a decent generalist understanding of these issues. The Bank of England, if it puts interest rates up, it does that to make borrowing more expensive and saving more rewarding. That means people are less likely to borrow, and normally you borrow to spend. And it means you are more likely to save, and if you save, you're spending less. And both of those things are to take money out of the economy to reduce demand in order to reduce inflation. That's the very rough generalized theory.

• 9:49Martin Lewis?

  But the problems and what's inflationary at the moment is not coming from demand. It's not coming from buyers, it's coming from sellers because of what's going on in the Middle East over oil and gas and how that feeds into the price cap and how that feeds into the petrol pumps. So it seems to me it's a rather odd tool that the Bank of England is putting interest rate up, which restricts demand, which shrinks the economy, where we want the economy to grow, when the problem's supply side. Is the basic problem the Bank of England doesn't have the tool to do this job?

• 10:20Speaker 04

  Yeah, it's a very blunt instrument they've got, but it is broadly the only instrument they've got in order to try and keep prices or price growth in terms of inflation stable. Now, I mean, the kind of point you make there is textbook economics. You've got a much better understanding than you gave yourself credit for because ordinarily, the Bank of England would just say it's a supply-side shock. There's nothing we can do about that in the near term, so we will sit on our hands and look through it. The risk they've got now is that inflation has been higher than it should have been for such a prolonged period of time, but they worry that people will start to bake that into their decisions. They will start to think, well, inflation's just always going to be higher now, and that requires

• 11:05Speaker 04

  them to lean against it, to slow the economy a little bit, to bring inflation back down to target. So that's why they're worried more about what's going to be happening to inflation in two years' time, rather than what's going to be happening to it in the next three to six months.

• 11:20Speaker 02

  Could I ask you something about how you decide where the economy is going? And rather modestly just then, you said that you'd look at a computer and see where the market thinks. In other words, see on average where everyone else thinks it's going, and that has to inform your thinking. I mean, there must be more to your job than that, because when I could sit there and look where the market's going, and, you know, that wouldn't make me chief UK economist at Barclays Bank. So what else do you look at?

• 11:47Speaker 04

  I mean, yeah, thanks, Lee, Adrian. Keeping me in work means there's actually a lot more that we can dig into. I mean, probably the biggest way to think about this is, what are the type of things that would put up prices in the shops? Well, first of all, you have the cost of employing people. So we look at what's going on in the labour market. We look at what's happening to people's wages, to the power they have to bargain for stronger wages, to how many people are switching from one job to the other. There's lots of things we can look at.

• 12:18Speaker 02

  Yeah, okay, that's really interesting. Do you just what you look, when you look at, see what the market thinks? Is there something, or I can, you know, anybody can go on and look at, well, what's the best place to find out what the market thinks interest rates will be in two years, five years, 10 years? Is there a simple place to go?

• 12:38Speaker 04

  I mean, it's all available on the Bank of England's website if you are inclined to go and start downloading Excel spreadsheets, but that's probably not everybody's cup of tea. So, I mean, I think normally the kind of the best way to do it is to look at the headlines that come out after you've seen a Bank of England decision or in the kind of immediate build-up. And, you know, Martin and this show does a great job of kind of bringing that out to people.

• 13:05Martin Lewis?

  But you're actually, I mean, technically, what we're actually talking, when you're talking about the markets, it's not what the market thinks, Adrian, it's what the market has priced in. It's actually, so this is swap.

• 13:14Speaker 02

  Well, it amounts to the same thing.

• 13:15Martin Lewis?

  No, it's actually, it's a market. So it's a swap rates in the market of where they're saying things will go. And then Jack's job effectively, I presume, I hope, to correct me if I'm wrong, is that you're working inside Barclays and you're saying, actually, we think the market has overpriced this. So you can therefore take a position of saying, we think the market's overpriced this, and therefore it's under. And then the people or your traders, they can all go, well, if Jack's right, then we can make some money out of the fact that it's overpriced. Is that fair?

• 13:43Speaker 04

  That's a very fair characterization. If I'm right, then everybody stays happy.

• 13:49Speaker 02

  Yeah, okay. Shall we get on to some questions?

• 13:52Martin Lewis?

  Yeah, we've got loads of questions from people, and we're going to have them. But just to let everyone know, I'm going to be talking through sort of practical impact on savings later, but then we've got a mortgage broker coming on to talk about mortgages. We're going to be going through it all. But we wanted to start with the big picture with Jack, so you've got a real understanding of where we're going. Go on, Adrian.

• 14:08Speaker 02

  Okay, Barry wants to know. He says there are suggestions there may be four quarter point rises between now and July, but with global uncertainty, is it possible to predict with any confidence?

• 14:19Martin Lewis?

  Yes, so what's your, you disagree, but what's the confidence level we're going to see a rise? And what's the confidence level that'll be up by, let's say, over half a point by the middle of next year?

• 14:28Speaker 04

  I mean, I think, given developments in the last few weeks, I'm relatively confident we'll see a rise. I think the problem we've got at the moment is global uncertainty is much, much higher than it has been historically. And this is all a case of what's going on in the Middle East. So, you know, your guess is as good as mine in terms of what the next Truth Social post will be, that can drive financial markets and kind of geopolitics. But I think conditioned on the fact that it looks like there's not a prolonged end to the conflict on the near-term horizon, I think that means we're relatively confident there will be an increase. The reason I would still be relatively confident is going to be one or two rather than four where the market is, is because we're really looking

• 15:12Speaker 04

  at what's going on in the domestic economy. And, you know, unemployment is starting to tick up, wage growth is relatively muted, and growth is ticking along, but could also, you know, still be going further towards its potential. So all of those suggest to us that actually the domestic economy is still relatively fragile in the outlook, is not creating inflationary pressure. But actually, the geopolitics will dominate all of that.

• 15:38Martin Lewis?

  So let me just try and paint a picture for people so they can see something practical on this. I've got in front of me from Trading Economics, the UK natural gas price per therm. It's not a forward-ahead look, it's not exactly the one that goes into the price cap, but it's a pretty decent proxy for the cost of gas, and it's, oil tends to move relatively similarly, it's not exactly the same, and electricity, because we have marginal pricing based on gas in this country, also moves with this. So just take this as one graph that shows you what happens. And this is when we can talk about why things have got worse recently. So in February, before the Iran-US-Israel conflict started, you

• 16:20Martin Lewis?

  had natural gas at around 80p. I mean, it goes up and down every day, but let's say 75, 80p a therm. Then the conflict started, and it shot up immediately to £1.25. So that's just over a 50% rise. It held around that 1.20 to 1.40 mark until April, when it looked like things were getting better. Then it dropped below a pound, and it stayed from a pound to a pound 10, and dropped again in June, when it got right down to 95p in June. So you can see, gone up from 80 to a range of between 95 and £1.40. Since June,

• 16:59Martin Lewis?

  it's risen constantly. Even if we go to the end of August, the end of the last price cap assessment period, the one that's dictating what happens in October, you've got prices at one pound, sort of one pound 60-ish. Since then, it's been over two pounds. It's come down a bit in the last couple of weeks, but it's still at one pound 85, which is still higher than at any point apart from the last few weeks since the conflict started. Remember, at the beginning, it was 75p. Even today, it's at one pound 85. So it's two and a half times the amount. And the last month has seen the biggest peak we've had since

• 17:40Martin Lewis?

  the middle of the Ukraine crisis. And that's sort of why Jack and people are saying, with what's gone on in the last few weeks, even though we've had the Middle East conflict for so long, that natural gas price I'm looking at has been so much higher in the last few weeks than it was when the conflict first started even.

• 17:57Speaker 02

  Okay, Joseph, how exactly is raising interest rates anything other than profiteering? Considering inflation is being driven by core essential spending, you can't exactly stop spending on energy and fuel.

• 18:12Martin Lewis?

  Well, you've sort of covered this. I mean, who makes money from putting interest rates up? I think that's sort of, it seems to be implied in the question.

• 18:18Speaker 04

  Yeah, I mean, moving interest rates, as I said, is a pretty blunt tool. So it tends to be if interest rates go up, then asset prices drop. So if you're an asset holder, you're losing out. It tends to be if you're a saver, then you gain. And we saw a long period where interest rates were incredibly low for many, many years, and that was kind of damaging savers. On the other side now, as interest rates go up, that's beneficial to savers. People with debts, people that are borrowing, face the other problem. So they are kind of hit by this. The important thing, I think, always have in your mind is most people fall across both of those camps. And so the kind of the impact that

• 18:59Speaker 04

  actually comes to you personally is a combination of those different effects. But yeah, if you're a borrower, this is going to be more painful, and if you're a saver, you're going to benefit from this.

• 19:09Martin Lewis?

  Can I say something sacrilegious? I'm about to say something sacrilegious. I'm probably going to regret this if it gets pulled out by some of the tabloids, as I often do on things that I say on here.

• 19:18Speaker 02

  What have you done?

• 19:19Martin Lewis?

  No, I'm not going to say, I just, what gets me here is I have long supported independence of the Bank of England, right, which sets interest rates policy at arm's length from government. One of my concerns at the moment is when you look at what you can do to control interest rates, the Bank of England is primarily about demand side. It can't control supply side. Government has levers to impact supply side. I mean, I'm not saying it's easy and I'm not saying they should do it. But I'm saying that the levers to impact supply side seem to me, and Jack can confirm this, to be more government side. I can't, I get worried. The problem with independence of the Bank of England is what governments of all political parties do is they go.

• 20:01Martin Lewis?

  Interest rates is the Bank of England's duty and we'll be looking at the Bank of England to control interest rates in order to bring inflation down because that's the Bank of England's job. When the Bank of England doesn't have all the tools, the government does, but it allows government to offset responsibility on the Bank of England, even though the Bank of England doesn't necessarily have the levers. Now, I'm not saying we should get rid of independence of the Bank of England, but it seems to me there is, there does seem to be a slight problem if you have a disjoint. Jack, is there anything right in that? Because again, I'm not a proper economist.

• 20:30Speaker 04

  No, no, I mean, the fact that we are increasingly seeing the problems with inflation being driven by the supply side rather than the demand side. We had a, a long period through the, the kind of the noughties and, and the kind of the early 2010s where we, all we were worried about was the demand side of the economy and the Bank of England was well placed to deal with that. I think as the world has changed to these energy price shocks and tariff shocks and de-globalisation, that means we are seeing more and more of these supply shocks, which create a difficult problem for the Bank of England because they one have a blunt tool that can't do much.

• 21:04Martin Lewis?

  They don't have the tools, do they? I mean, it, it, government has that tool. That's correct, isn't it? It, government could impact supply more than the Bank of England, one would have thought.

• 21:11Speaker 04

  So that's absolutely true in a relative sense. The difficulty for governments, I think, is that any changes to the supply side of the economy take a very long time to, to kind of feed through. So whereas the Bank of England is trying to manage things, you know, quarter to quarter, year to year, um, supply side kind of policies that try and improve that supply side, they can take decades to come through. I mean, we know our political cycle is a little bit more volatile than that at the moment. But, uh, you know, that, 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.

• 21:51Martin Lewis?

  Cool.

• 21:52Speaker 02

  Okay. And says, should I transfer my stocks and shares to a cash ISA, especially as the national debt is increasing more than analysts anticipated? I mean, the budget will most likely increase, reduce tax allowance and share prices will fall in the stock market.

• 22:07Martin 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 and 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?

• 22:38Speaker 04

  Yeah, I think the, the uncertainty is definitely acting as a drag on, on kind of people's confidence at the moment. But actually, we've seen pretty resilient performance across a lot of markets here and the, the UK actually is, 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, uh, investment advice when we sit in an economics area of a bank. Um, so I, I will refrain from kind of, you know, anything too specific on, 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. Like, you know, it doesn't look like the geopolitics is getting any simpler, but actually

• 23:19Speaker 04

  the underlying fundamentals for the UK economy are, are pretty positive. And I think that will start to reassert itself as we move through next year.

• 23:27Martin 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. So Jack, thank you, mate. Much appreciated. Play the theme tune.

• 24:10Martin 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.

• 24:27Martin Lewis?

  Adrian, you are currently better than random chance. You are just very fractionally doing better.

• 24:35Speaker 02

  I'll enjoy it. I'll enjoy, I've had a spring in my step all week.

• 24:37Martin Lewis?

  Chopping the tariff up and using the little pieces to pick out what's going on.

• 24:41Speaker 02

  Yeah.

• 24:42Martin Lewis?

  So let's do this week's question.

• 24:43Speaker 02

  Mm-hmm.

• 24:44Martin Lewis?

  Disaster at Shay Charles. You played that in a little too early. Let's cut it out and pretend we didn't do it.

• 24:49Speaker 02

  Okay.

• 24:50Martin Lewis?

  Given away where I'm going.

• 24:53Speaker 02

  Yeah.

• 24:54Martin Lewis?

  Disaster at Shay Charles. Adrian has a swanky new coffee machine with a dial that goes from one to 100. 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.

• 25:21Martin Lewis?

  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. 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 said Martin Lewis on you.

• 26:06Martin Lewis?

  There we go, Adrian.

• 26:08Speaker 02

  Very good.

• 26:09Martin Lewis?

  A little too soon. You need to.

• 26:11Speaker 02

  Are you all right?

• 26:12Martin Lewis?

  I just got to stop doing both voices though. Incredible, or anyone want an audio book read? I'm, I'm available. I'd love to do one. Uh, um, Tooth, Adrian, you need to answer this question correctly before I will help you out of your trouble. If you have a fixed rate bond, are you 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? Can you withdraw the money under the term if you have an 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.

• 26:56Speaker 02

  Yeah.

• 26:57Martin Lewis?

  Generally locked away.

• 26:58Speaker 02

  Yeah.

• 26:59Martin Lewis?

  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?

• 27:06Speaker 02

  Um, I would, there's a few grey areas. You've said first usually, what does that mean? There's also.

• 27:16Martin Lewis?

  What it means is most of these, in some cases, it's based on bank's terms and conditions. So there can be anomalies, but it's what the general trend is.

• 27:24Speaker 02

  Okay. And I mean, what's a domestic emergency? Who decides what's enough of an emergency? I mean, a, a coffee machine flooding, you know, I mean, that's first world concern. You know, your boiler flooding the place is different. So that, I, I think it's, okay, no, I don't think it's, no, I don't think it's any. Who's going to sit in judgment over, over what is a domestic adjourn, so domestic emergency? So I'll say C. I don't think you can.

• 27:57Martin Lewis?

  So you're saying C, not with either?

• 27:59Speaker 02

  Hmm.

• 28:00Martin Lewis?

  Okay. 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're not going 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. 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.

• 28:45Martin Lewis?

  Occasionally, there's one or two that allow it, which is, that was my exception. And then I bring it you and say.

• 28:49Speaker 02

  But you're going to tell me with ISAs you probably can.

• 28:51Martin Lewis?

  But with cash ISAs, the laws say they must allow you to access your money. 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, uh, you might want a fixed cash ISA. To give you examples, top one-year normal fixed rate, GB Bank 5.05%.

• 29:33Martin Lewis?

  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 Aldermore 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 a get out of jail free card with the cash ISA. But you, Adrian, got it wrong. Sorry, mate.

• 30:04Speaker 02

  Okay. Happy to be of service though. I think we've clarified things nicely.

• 30:08Martin Lewis?

  And we'll be coming into savings in a moment.

• 30:13Martin Lewis?

  Did I jump the shark, Adrian, on the mastermind question? Did I take it too far?

• 30:17Speaker 02

  You're not quite, not quite, but you're verging on the shark.

• 30:22Martin Lewis?

  I've put the water skis on, I've not quite jumped it yet.

• 30:25Speaker 02

  Exactly, exactly. Just for the tell us, this is the most expensive thing you've got, which you've never used. Can I just tell us my one tell us?

• 30:33Martin Lewis?

  Of course you can. There's some really good ones.

• 30:34Speaker 02

  When I had more money than sense, I wanted a leather jacket. And there's somebody on you said, I know a bloke who makes leather jackets. So I went to this place in the East End of London.

• 30:43Martin Lewis?

  Sounds like a setup for mastermind.

• 30:44Speaker 02

  He had mountains of leather.

• 30:46Martin Lewis?

  Okay.

• 30:46Speaker 02

  And I said, I want a big leather jacket. That would say, measured me up, said, mate, I want it quite big. Anyway, what kind of leather? I want the thickest. Do you shoe it? 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, it's in my, 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 being a, having more money than you know what to do with, which I did for a short phase, certainly haven't now.

• 31:22Martin Lewis?

  What have you done with it?

• 31:23Speaker 02

  It's, I'm waiting to find somebody big to give it to.

• 31:27Martin Lewis?

  I think you should auction it for charity, Adrian. There you go.

• 31:29Speaker 02

  I'm not sure if I could carry it down the post office to our consent.

• 31:33Martin Lewis?

  I drive a motorbike and those jackets, you know, and they've got armour in them. So as soon as you go 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. 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 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.

• 32:17Martin Lewis?

  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.

• 32:28Speaker 02

  More 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.

• 32:45Martin 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,

• 33:30Martin Lewis?

  which I focus on. That's what I'm looking at all the time. What are the top easy access accounts? What are the top fix 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 sort of 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. 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.

• 34:15Martin Lewis?

  So you've got to be on top of it.

• 34:16Speaker 02

  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.

• 34:26Martin Lewis?

  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 is, goes back to what I said at the beginning. 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 that today. Not all of it is, because it's, you know, 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.

• 35:11Martin 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. Jack says they're not going to go up as much as the markets think.

• 35:53Martin Lewis?

  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. 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.

• 36:34Speaker 02

  Okay. 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.

• 36:47Martin Lewis?

  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. 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.

• 37:28Martin Lewis?

  So you can get cash ISAs, you know, 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. In other words, he is borrowing a high proportion of his house's value. When it 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.

• 38:12Martin Lewis?

  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. 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.

• 38:39Speaker 02

  Rachel, savings. Facebook is rife with all these investment ideas that 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, 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 saving stroke investment schemes through banks?

• 38:59Martin 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 that 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 reg. There are no regulations in place. I would not touch with a barge pole. I would not even click with a barge pole.

• 39:42Martin Lewis?

  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. 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,

• 40:27Martin Lewis?

  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.

• 40:39Speaker 02

  Let's go on to the mortgage, mortgage questions then. Have we got an expert?

• 40:44Martin Lewis?

  We certainly do. We've got the one and only Monty from Corico Mortgages. How are you, Monty?

• 40:50Speaker 05

  I'm fine, Martin. How are you?

• 40:50Martin Lewis?

  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.

• 40:57Speaker 02

  Okay, this is Andrew Montlake, I should say. I don't feel I'm known well enough to call him Monty.

• 41:03Speaker 05

  You can call me Monty.

• 41:05Speaker 02

  All right. Thank you very much. Okay, 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 the fix should I go for? Neil, 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?

• 41:31Martin 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 to a 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.

• 41:45Speaker 05

  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, A, 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. And 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 the magical time to actually start looking.

• 42:25Martin 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, you get your fix rate now, and that ensures you, 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 fix you've booked, can't there?

• 42:49Speaker 05

  There can be in some circumstances, and it's always important to look at the small print. With 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 there 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 the product transfer with your existing lender.

• 43:19Martin Lewis?

  Yeah, it's good. This is a good, good reason to talk to your mortgage broker 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?

• 43:43Speaker 05

  I think pushing people to anything is actually the wrong phrase.

• 43:47Martin Lewis?

  Would you be suggesting, when you've looked at the facts, that people...

• 43:50Speaker 02

  Come on, Monty, play the game.

• 43:52Martin Lewis?

  Two or five years. I didn't, I didn't mean to besmirch your professionalism. Sorry, mate.

• 43:57Speaker 05

  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 sweating that rates might go up? Or 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.

• 44:41Martin Lewis?

  So yeah, so if we take that, 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.

• 45:06Speaker 05

  Yeah, I'm quite, I like the security of a 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. And then 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.

• 45:28Martin Lewis?

  Yeah.

• 45:29Speaker 02

  Let's move on to Laura's, Laura's question. I feel a bit sorry for Laura. She says, my lovely 1% fix 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, she, it's not even a question, it's just a lament.

• 45:49Martin 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, you know, so all those five-year mortgages that people locked in at 1%, 1.5%, 2%, it's about 10% 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.

• 46:13Speaker 05

  Loads. I mean, you're exactly spot on. Five years ago, you could actually get a five-year fix rate at just under 1%. 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. There 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 there are, you do have to look at that carefully and get advice.

• 46:46Martin Lewis?

  You don't really, I mean...

• 46:47Speaker 05

  Because all these things come with costs.

• 46:48Martin 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've just been, we're 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, you know, if you, 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. Six months before is when you need to start looking at this. But if, even if you're a bit further out, go on to a mortgage calculator now, put in a rate, let's say, let's say 5.5%, they're taking as a random middle rate, and look at what your increased cost would be at that

• 47:30Martin Lewis?

  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.

• 47:44Speaker 02

  Great. I'm on a tracker mortgage after my last fix rate deal came to an end, and 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?

• 48:03Martin Lewis?

  Monty?

• 48:03Speaker 05

  Yeah, I mean, that's, that's the same sort of question, really. It depends. What I'd be looking for is how many rate rises could you tolerate? 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. So 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 fix rate might be a good option.

• 48:43Martin Lewis?

  And also, I would suggest, Monty, you know, she's on a tracker mortgage, but we don't know what the rate of your tracker mortgage is. We don't know how good that tracker 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 cheque. The cheque 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.

• 49:13Martin 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

• 49:21Speaker 05

  Hello.

• 49:22Martin Lewis?

  Podjuicer, Podjuicer, as I'm now calling him, Podjuicer Simon.

• 49:26Speaker 05

  Our promotion.

• 49:27Martin Lewis?

  No, it's just, I've 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 prodzenter as opposed to Podju- but I'm going with Podjuicer for you, Simon.

• 49:41Speaker 05

  Well, he's got more diva qualities than me, Matt.

• 49:43Martin Lewis?

  That is very true. There's no denying that. So we'll get on with some more mortgage questions while 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 would think.

• 50:18Speaker 05

  Yeah, that's right.

• 50:19Martin Lewis?

  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. 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, broad brush.

• 50:36Speaker 05

  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 on to. 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, five years left on the term, for example, they might be able to push you on to, on to a retention rate. Elsewhere, if you do have to remortgage-

• 51:03Martin Lewis?

  That's a cheaper rate, not cheaper than the standard variable.

• 51:04Speaker 05

  Potential cheaper rate. You will be able to find a cheaper rate than, 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-

• 51:21Martin Lewis?

  Sorry, just sorry, I'm not meaning to pick apart, just-

• 51:23Speaker 05

  No, no.

• 51:24Martin Lewis?

  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?

• 51:30Speaker 05

  The point you finish the mortgage.

• 51:32Martin Lewis?

  Right, so your term would need to end by age 75, say.

• 51:35Speaker 05

  Correct.

• 51:36Martin Lewis?

  So if she's 62, a 13 year term would be maximum.

• 51:38Speaker 05

  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.

• 51:50Martin Lewis?

  But the mainstream still lasts until term up to 75?

• 51:54Speaker 05

  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. So 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%.

• 52:18Martin Lewis?

  So if she's earning 10 grand, she should be fine even on, because it's a £39,500.

• 52:23Speaker 05

  Correct, yes.

• 52:24Martin Lewis?

  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, 5%, 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, there's sometimes some people talk about keeping a few hundred quid on the mortgage just for the mortgage deeds and that type of stuff. Is there any reason you wouldn't pay off the mortgage, Monty?

• 52:55Speaker 05

  No, I would, I would actually agree with you there. It's about doing that maths 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.

• 53:09Martin Lewis?

  Yeah, so, 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, 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. 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 7%, 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. And let me move on to the next one for you. Sally says,

• 53:49Martin Lewis?

  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 favour, 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?

• 54:21Speaker 05

  So I'm actually, I always come from the buy when it's best for you to buy.

• 54:26Martin Lewis?

  Yeah, me too.

• 54:27Speaker 05

  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? The 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.

• 54:55Martin Lewis?

  Just a thought, we, we were talking in earlier that the markets are pricing in four quarter percent rises, so 1% 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?

• 55:13Speaker 05

  I think a lot of it has been priced in. If you, if you look at the, the swap rates, which I will term the future cost of funds upon which lenders base their, their fixed rates on. At the moment, you're looking at, you know, five year money is around about 4.7%. So that means that actually it's already factored in those four rises. So the mortgage rates you can get now, which are around about 4.8, 4.9%, a lot of that has been factored in. There is room for, for a little bit of growth. But if the next rises up, there's no reason that swap rates will then go up again.

• 55:53Martin Lewis?

  Because they've already-

• 55:54Speaker 05

  Because they've already factored it in.

• 55:56Martin Lewis?

  I mean, November, there are 80, 90% certainty it's going up in November, you know, a quarter of a percent. So, I mean, that's already there, isn't it?

• 56:03Speaker 05

  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.

• 56:29Martin Lewis?

  And now we're going to, I'm going to finish on this one. 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, are 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. I mean, you're very considerably older than me, Monty. Do you remember that time?

• 57:12Speaker 05

  I'm much older.

• 57:14Martin Lewis?

  How old are you? I think we're about the same, aren't we?

• 57:17Speaker 05

  If it's not a personal question.

• 57:18Martin Lewis?

  Yeah, come on.

• 57:19Speaker 05

  I think, I think I'll be 57 this year.

• 57:22Martin Lewis?

  Okay, so you, you just, I'm 54, so I have a few years on you. But yeah, neither of us were probably working in the late 80s. But it is, I'm right, it was, it's a totally different scenario, isn't it?

• 57:31Speaker 05

  It's a, you're spot on. The real key stat there is the earnings ratio to, to mortgage costs. And, 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, that, that's really what you need to look at. That's not saying it wasn't tough then, but-

• 57:54Martin 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, 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. And it's just, it's not a fair comparison, would be my view.

• 58:31Speaker 05

  No, I totally agree with that. So I do say that actually, historically speaking, we're now in a more normal period.

• 58:38Martin Lewis?

  Exactly.

• 58:39Speaker 05

  If you look at the, the graphs before the credit crunch in, 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 and we can expect more of the same going forward.

• 58:54Martin Lewis?

  Absolutely. And of course, for savers, for, on the other hand, you know, the hugely low interest rates was an absolute nightmare for those people who plan to put money away in savings and to live off the interest. And so all of it balances around in that direction. Monty, or more formally, Andrew Monlake, Managing Director of the Mortgage Brokerage, Corico. Thank you so much for joining us, mate.

• 59:15Speaker 05

  Thank you for having me.

• 59:16Martin Lewis?

  Pleasure. Martin, can we just ask you a quick question? Sure.

• 59:19Speaker 06

  We talk quite a lot about mortgages and savings, but what about loans and credit cards?

• 59:24Martin Lewis?

  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're already seeing the cheapest loan rates shave up very, very slightly. 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 plan needed for borrowing, all 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.

• 1:00:09Martin Lewis?

  You've got to remember, a typical high street credit card is now around 25% interest. 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 that are factored in, carry out. We might see 0% 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.

• 1:00:51Martin Lewis?

  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.

• 1:01:09Martin 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?

• 1:01:18Speaker 06

  I do, yeah, I'm primed and ready.

• 1:01:20Martin Lewis?

  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. 35 years of not being used. I don't know, do bags go up in value?

• 1:01:48Speaker 06

  I think certain ones do.

• 1:01:49Martin Lewis?

  Vintage bags?

• 1:01:50Speaker 06

  I think certain ones do, yeah.

• 1:01:52Martin Lewis?

  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, Isabel's no use either. But you never know, Deborah, you might be sitting on a gold mine. I mean, you shouldn't be sitting on the bag, that will break the leather, but you might be, you know, it might be worthwhile. What have you got?

• 1:02:11Speaker 06

  Well, I was going to give you mine, actually.

• 1:02:13Martin Lewis?

  Oh, it was a Simon one?

• 1:02:14Speaker 06

  Yeah, well, so just as it turns out, we're speaking the week of my wedding anniversary and I was chatting to Linda 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.

• 1:02:35Martin Lewis?

  Yeah, fair.

• 1:02:36Speaker 06

  So she then sort of sacked them off.

• 1:02:38Martin Lewis?

  I have very similar issues with my heels.

• 1:02:39Speaker 06

  Yeah, exactly, yeah, yeah. So I mean, but they are, so they've never been worn and are still up on vintage and available, I think.

• 1:02:46Martin Lewis?

  Okay, fine. You've just broken BBC producer guidelines advertising product? You haven't given the, we're all right. No Gina, 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.

• 1:03:01Speaker 06

  Martin, this one's from Martin.

• 1:03:03Martin Lewis?

  Okay.

• 1:03:03Speaker 06

  He asks, do insurance policies count?

• 1:03:06Martin Lewis?

  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? And what counts as use? 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.

• 1:03:47Martin Lewis?

  I decided not to count insurance into the way that this works because I just think it, I think it's sort of.

• 1:03:54Speaker 06

  You're hoping it'll be a waste of money?

• 1:03:55Martin Lewis?

  Yeah, well, it isn't a waste of money because you've got the protection. The fact that nothing's happened is a good thing. 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 get, 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.

• 1:04:21Speaker 06

  That is exactly the sort of person I am.

• 1:04:23Martin Lewis?

  Yeah, I just.

• 1:04:24Speaker 06

  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.

• 1:04:30Martin 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 can do, you do Deb next.

• 1:04:40Speaker 06

  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.

• 1:04:56Martin Lewis?

  I think I need to do an intervention here, Deb. I need to be honest, I think I need to do an intervention. I mean, an air fryer, the name is a misnomer. An air fryer is basically a hot air circulating mini oven that, and you can, 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, and the wattage isn't as high. And it can be a really efficient way to cook. Where I tend not to suggest using air fryers, 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.

• 1:05:41Martin 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, use any voice you like. Go, let's do a couple more, then we'll start.

• 1:05:58Speaker 06

  Dan, he says, bean to cup coffee machine, just too much time and maintenance, far easier to just boil the kettle.

• 1:06:05Martin Lewis?

  Fair. Doug's, 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. 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 is sort of looking at, if it's an ornament, you know, you, 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.

• 1:06:32Speaker 06

  And presumably he'll be covered of aliens in there.

• 1:06:34Martin Lewis?

  God, yeah, I've just read them. You do Justin and I'm going to finish on Poppy. I like Poppies.

• 1:06:39Speaker 06

  Justin says he bought an electric scarifier for my lawn.

• 1:06:42Martin Lewis?

  Do you know what a scarifier is?

• 1:06:43Speaker 06

  I do, it kind of churns up the, basically cricket grounds do it at the end of the season. That's how I know.

• 1:06:52Speaker 06

  To lean into my, my big interest that I bring up all the time, yeah.

• 1:06:56Martin Lewis?

  Yeah, exactly, fair enough.

• 1:06:58Speaker 06

  Justin's scared to use it, so he always says, I'll use it next year at his daughter's first house.

• 1:07:04Martin Lewis?

  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 hairdryer sitting in the drawer? You know, even if, go and give a brand new unboxed Dyson hairdryer to your local charity shop, they would be over the moon with it.

• 1:07:31Martin Lewis?

  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. 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.

• 1:08:02Martin 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.

• 1:08:50Speaker 07

  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 [email protected]. 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.

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• 1:10:36Speaker 07

  This week on The Interface, millions of kids have grown up on camera with their childhoods turned into content. There's a new law in California that gives influencers the right to be forgotten and it could impact adults too.

• 1:10:47Speaker 06

  And an attack on Russian data centres started a rumour that all the evil disinformation bots had been deleted from the internet. But the truth might actually be a lot scarier.

• 1:10:58Speaker 07

  For our take, join me, Jess Maddox.

• 1:11:01Speaker 06

  And me, Thomas Germain, for The Interface.

• 1:11:03Speaker 07

  Listen on bbc.com or wherever you get your podcasts.