Please can someone help, panicking so much about mortgage

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

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

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.

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.

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.

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

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

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%

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.

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.

You could consider moving to a cheaper property?

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.

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.

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.

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.

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

☝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.

You can earn up to £7,500 a month tax free if you take in a lodger,that's £625 a month.

Selling your home would be too much stress right now.

£280k approx. now, so should be around £270k next Aug.

Use £40k inheritance to bring that down to £230k, assuming no penalties.

£230k would be approx. £1,379 per month, so maybe doable?

Ermm… you can’t say that. You’ve no evidence that is the case.

The announcement from BoE has calmed the market which was clearly in a bit of a panic before, but it is volatile so it can go either way.

but it is better to mentally prepare for a higher rate (that is inevitable as OP is on a ‘low’ one now) and then you can only be pleasantly suprised if they come down.

Fixed rates aren’t linked to the base rate, they are linked to swaps. So even if the base rate goes up, the swap for a specific term may be higher or lower

See what offers they have at your bank or others and what the repayments will be first.

I get it, I have been a single parent and it's not just the financial side - it's the 'everything' ness of it that gets you. All of the decisions and all their consequences lie with you and it can be really overwhelming.

You sound overwhelmed, is this feeling like one more thing on a really full plate? If so that is normal and understandable. I read something recently that said to pick a date 6 or 12 months in the future and write in your calendar on that date - It all worked out. So everyday you're getting closer to that day, because it will happen. It will all work out, you will get there, just like you have before no doubt.

Hang in there, it will be okay

Put the 50k in a high interest account- this should get you £2-3k a year and use this to help.