Please can someone help, panicking so much about mortgage

Personally I’d keep the £50k in a savings account/ ISA and use it to subsidise your mortgage. I wouldn’t lock it up in the mortgage because I think there’s huge value in having liquid assets, particularly as a single parent.

You would likely make at least 4% interest on the £50k which may fully balance out the interest you would save by using it to pay the mortgage. I make c.10% on my savings in a stocks and shares ISA. I have DMX. £60k savings and a £330k mortgage but it makes more financial sense to keep my savings in the ISA than use them to pay off the mortgage at a 4% rate.

I think you’re spiralling a little, being on your own must be so hard but you’ve started falling down a bit of a rabbit hole as no one knows what’s going to happen in August next year.
A couple of things I would do is to start overpaying now whilst you’re on a low rate.
You’ve managed to save £350 this month, that’s great, try over paying by that much each month (check how much you are allowed to over pay)
I would keep the £50 000 in as higher interest rate account as possible.
If you have a spare room and can face taking in a lodger etc then you are allowed up to a set amount a year by renting a room.
A family member takes in students from the international school over the summer holidays, puts a little put up bed in her room for her daughter and then takes two students for the 6-10 weeks (they usually stay a fortnight and then switch)
Your income is only slightly less then our joint one with three children so whilst it’s daunting because you don’t have the second adult to talk things through/help, once you’ve put a plan in place you’ll feel much better

Do you have a spare bedroom? Are you near a large hospital? Universities pay generously for short term lodgings for students on placement (approx. £65 a night from Welsh Unis). Two 8 week placements in a year max's out your £7500 tax free allowance and would cover your mortgage shortfall.

By default they will all be enhanced DBS checked, and most will go home on weekends/ days off but you will still be paid for the whole block.

Are you capital repayment or interest only?

I have not read all the posts so you may have already answered.

I know you are looking at the worst case scenario right now but you are in a good position, you have been paying your mortgage so you will have paid some of the capital off.. and you will have a good credit rating. In all likelihood there will be some discount rates available next year and you cam keep switching to get good rates. You are paying £1,000 per month now and saving £350. You might get a payrise of £100 and you could reduce your mortgage by £50,000.. Run the numbers through something like this... and see what you cpuld find if you were to renegotiate your mortgage now.. look carefully at your early redemption fees too..

I know you have to make the decisions and pay this alone but there are people who will walk this with you and reassure you.

If you overpay by £50k your payments would be much less than 230/280 x 1600 = 1314
due to compound interest.
It might even be similar to what you pay now.

I'm also on a low rate which ends in February - so I'm looking at a big hike in monthly payments (though I've got less owed than OP).

I'm working through figures and trying to work out if it is worth taking a chunk out of my pension plus some savings to pay it off. complicated.

If I were in your position I would use the 50k to sub the difference for a while (as has been suggested above) to give you some breathing space. Moving house is a huge emotional and financial upheaval (especially as a lone parent) and will still cost money with solicitor and moving costs which would eat into the 50k anyway.
Rates are unlikely to go down in the next 12 months or longer tbh (I work for a bank) so keeping your current home would make financial sense in my opinion.
Don't forget your property will appreciate in value over time so your Loan to value should improve also which will hopefully improve available rates

Contact London and country mortgage broker. They have been giving me 4.75% quotes. We’re currently on 2.1% so it’s a big jump but less than 6%.

Yeah, buggered up, requested it to be deleted as I couldn't edit and it hasn't been yet! Haven't slept and can't multitask! 🙈

10% of the remaining balance usually with most lenders. 20% for NatWest and 10% of the original balance with Nationwide.

But still, she probably wouldn't be able to anyway. When we hit our last year and our ERC halved, we had to have a meeting with an advisor before we could ditch our fix. We were on 1.99% and wanted to fix at 1.24%. We had to sit there while he did a load of calculations (he calculated that we would save £500) and asked why we wanted to re-fix. I told him that I'd got wind that interest rates would start rising. I think he thought I was being a bit daft! Anyway, it was a right faff and our ERC was only £500 as we only owed £50k.

It's still daft to pay £3k to pay more in interest for a year.

I work in mortgages and I’ve never heard this.

your mortgage might have been stressed at 5% but given there’s a lot of rates above 5% now, guess that 5% rule might not be too helpful

I would ask your mortgage provider if you can pay off £50k on the capital amount borrowed and if so , what would the new monthly payments be.

Also I think you’ll get a better deal than 6% if you shop around. Use a broker. I’ve used L&C before and they were very good.

Could you find a side hustle to increase your income if this is the case.

This has probably been suggested already but there are some mortgages where you can use your savings (in your case the £50k) to offset some of the mortgage interest. Basically you deposit the £50k with the same company that is giving you the mortgage, but you can still access the money if you need it. Maybe that would be enough to get you through the next couple of years and hope for lower mortgage interest rates after that. So as well as looking at high interest rate savings accounts for your £50k, it would be worth getting advice about that in case it gives you a better overall deal.

I was also going to say pay off the 50k and go interest only. As long as you can say how you are going to repay the principal at the end of the term, many lenders will allow it. You will have at least 50k positive equity, maybe more, so you can say you intend to repay the principal from the sale of the house. Without positive equity that would look less viable.

Under the mortgage charter you can change to interest only for 6 months or extend the term, would that help?
speak to your mortgage provider, they will help.

I did mention childcare costs. No answer so far.

You need to speak to a mortgage advisor. They have access to rates that we can’t see on the market. There are some that will charge for their services, whilst others don’t. I’ve personally worked with one that doesn’t. They earn their money via commission from the banks.
We were able to lock into a rate at 6 months out, and then every time a better deal came on the market we locked into the better deal. Ultimately we got a great rate of 3.9% 2yrs ago fixed for 5yrs which was good at the time, and has remained so. You will quickly get overwhelmed trying to figure this all out yourself.
As for the £50k I’d consider using that to offset some of your monthly living costs, rather than chunk it off your mortgage. And make sure you have life assurance in place too.

On my mortgage it’s 1%, and I’m sure about this because I’m selling it at the moment and my fix ends the same time as the OP. I really don’t think 10% is the norm for an ERC. 10% is the amount you are allowed to overpay each year without penalty.

I know you said the term can’t be increased but I would bet it could be. I was surprised when we last spoke to the bank.

Terms might come down, with NatWest you can secure a new rate 6 months before yours runs out. Then track what rate you get. If it goes down you can cancel the current and get the new rate. No impact on you, I did it loads leading upto ours. You can then cancel that rate upto the day before it’s due to start so you can theoretically move to another lender too

There’s been some good advice so far about weighing up if you’d be better to use your savings to reduce the mortgage or use them as needed to make the monthly mortgage payments. I don’t think anyone has mentioned so far that you’ll hopefully be able to reduce your spending on childcare for the small child as they get older too, which added to any pay rises and expense reductions might be enough to make the books balance again.

Does your child’s father pay proper child maintenance?

Talk to your bank. Have a look at how much capital you’ve paid off. And while you’re on that brilliantly low rate, overpay each month. Do the maths - overpaying by as little as £50 pm will help.

Use the wedge of cash you have to overpay as much as possible, within annual limits.

Do whatever you can over the next year to get the capital down.

But if the worst comes to the worst, you have a substantial asset in a house, and you can downsize.

Whilst i understand your panic as that would be a big jump and yes £75k py is a good wage its not in reality as a single income single parent who maybe doing this all on their own with no other parental support. Between myself and my husband we are on £90k no other financial support / assistance and our mortgage jumped by £400 i locked in 5yrs which im glad about thatnks to world economics being so bad but even then belts have had ro be tightened and DH doing regular OT just so we have a little extra spare.

1st things 1st you have just under 1 yr for renewal you can lock in a new deal 3-6mths before just be wary of how early due to ERC
2nd find a mortgage broker a decent one will always look for the best deal and that isnt always staying with your current provider you can also look using money saving expert.
The max most mortgages allow over payment is 10% py so for you £27k while in your mortgage term i would consider doing this if i were you whilst the interest is so low.

Utilise companies like Sprive when doing your every day shopping, you can save up the funds not pay against your mortgage straight away (i manage £60 pm of by just doing my amazon subscribe and save and weekly sainsbury shop)
Also do christmas shopping/ car insurance / home insurance etc using links through companies like quidco as you can save that up and either get the money or vouchers for other companies again over 1 yr even if its £100 its £100 to reduce as you renew our invest for future payments

Save money on you mobile phone by getting sim only if not already at renewal and downloading Airtime rewards

Save money on meals out on firsttable if you can

If in this 11mths you can build up extra savings just through cash back apps. And you pay 10% now off mortgage before renewal (if thats the max it allows) then come renewal the higher rate may not be as bad as you think it will be as it stands now.
And all the cash back can be paid so you borrow less at renewal make sure at 6mths to go you start looking at mortgage deals and get yourself a broker

Good luck try not to loose sleep put measures in place and you can do this you have so far and you will again

Can you over pay a bit ? and I think there is also an app called sprive , with you get money paid to your mortgage when you buy stuff although I don’t know the details .