Please can someone help, panicking so much about mortgage

☝Take this as a worst case scenario OP. Once you have reconciled yourself for a worst case, the only way is up!

I think you are likely to be able to negotiate something to bring the payments down a little tbh.

Interest rates are likely to increase over the next year rather than come down.

look at discounted deals rather than standard variable rates. Speak to a broker

Okay, so if you manage to save 350 a month now on top of paying a 1000/month mortgage, this means that you could, at a stretch handle a 1350 a month mortgage. You'd need an extra 250 a month to get to the 1600 a month you suspect it will be.

If you have an inheritance of 50k combined by the 350 a month you're saving between now and august, and you took 250 from it each month - that would last you 215 months ((50,000 + 11*350)/250)

215 months is around 18 years.

In 18 years will you be able to earn more? Probably!

I understand that this probably isn't what you'd dreamed of doing with the inheritance. I'm not trying to minimize your challenges, but I just want to point out that by your own numbers, I think you'll be okay.

It is very natural to feel like this op. Being a single parent isn't easy, and you have done well to get into the position you are in.

There WILL be a solution, though maybe not your first choice, and you are giving yourself time to plan.

Give yourself a big hug and a pat on the back for all of the above.

Once your rate ends you can move providers for a better rate or to get interest only potentially. Book a free appointment with a fee free all of market broker like London and County to discuss your options. It might be much better than you think.

Good advice in this post OP.

You can also ask about interest only if that helps get you through a tricky patch.

Please don't despair until you have talked this over with them.

You could consider moving to a cheaper property?

Do you know what your current LTV is? You often get lower interest rates if you have a lower ltv so that's something to speak to your broker about. You could also use the 50k (or some of it) to pay off a lump sum which would bring your mortgage down further.

I think it's unlikely rates will come down anytime soon, so it's best to plan for a worst case scenario.

It’s a non issue if you have access to £50k. It will last you about 6 years. Other than that move house if you can. Honestly no need in your situation to get into such a state.

You will get a remortgage with NatWest at 4.X

log in online and check, but that’s who mine is with and there is plenty of options that are sub 5%

How about an interest only mortgage? You won't pay off the debt, only the interest, but it will give you breathing time (((hugs)))

Rent a room to a lodger. £7000 per year is tax free.

Op, you are catastrophising. Nobody knows what will be happening in a year.

I understand it's hard if it's just all on you, but atm you are able to save a little each month as a buffer.

If you did have to use the 50k, you could leave that in savings, making interest, and use a little each month for any increase in your monthly mortgage payment.

50k, even taking out £1000 each month ( not adding on any interest) would help you for over 4 years.

You'll be fine.

What did the broker tell you at the time? I got a mortgage in 2007. Average then was 5.5%. 6-8% is commonplace over decades. At that point in time, the banks were willing to lend me much more than I took. Because even I could see back then they at 8% I would not be able to afford my mortgage. So I had to settle for a tiny house in a bad area. I can’t understand how people are taking mortgages out and not risk assessing it for the future. Bonkers.

You need to buy a cheaper house AND use the very lucky £50k you have. You could along interest only but I’d avoid that if possible.

I also wonder if you need to take a good look at your outgoings. Your income and mortgage don’t sound too bad on the surface.

Could you be strict and up your monthly saving to 400 and stick it in a savings accounts until August 27? Then you could drawdown on that amount to supplement the increased mortgage payments

Would it be possible to take in a lodger? The income is tax free.

Using the 50k 1800 at a time to overpay while you have a low rate sounds like a good idea.

You can also shop around for a different provider who will offer a longer term - you can get terms up to 40 years, and it doesn't mean you can't repay early further down the line.

Otherwise put the house on the market and downsize unless you're already in a two bed.

There are always options, and you have time.

I wouldn't pay the £50k off the mortgage, that could be useful for other things as well as a financial safety net. And as said above you should only be drawing it down very slowly to cover the part of the mortgage you might find difficult to pay preserving your safety net.

Can people PLEASE stop telling the OP to overpay. It would be a ridiculous thing to do while her rate is 2.7%. The £50k should be earning over 4% interest in an ISA, which hopefully it's already in, plus the OP has her £500 pa tax free interest savings allowance to use.

I also don't understand why she thinks her rate will go up to 6%, rates around 4.5% are available, so not as big a jump.

OP you could probably do with reviewing your spending to make sure you're on top of your budget and see if you can save more each month. You could use some of the £50k to supplement your income over coming years until your disposable income grows eg due to payrises or lower childcare costs, but with nearly £3k pm after your mortgage, you should be able to cover your costs and have a decent lifestyle.

It’s 12 months away. By all means check in with your broker for reassurance, but it will be fine honest.

With respect, I am quite confused by your level of panic. At £74k, your take home should be around £4,275 (assuming a decent 5% pension contribution). With one DC and assuming they are in nursery with 30h free childcare, the most expensive nursery would still be at £800 so

£4275 - £800 (nursery) - £1600 (increased mortgage) - £150 (council tax) - £75 (car insurance) - £100 (fuel) - £150 (utilities) = a healthy £1400 for food and outings!!!!!

And that is without touching £50k inheritance money...

Yes you can unless you are already at a retirement age of 80. Some lenders will lend past your 70th birthday. You can change term again down the line.