How's everyone planning to handle the crazy mortgage rates?

[adviceseeker22]

One of my sub accounts expires in November and I'll have to pay £350 on top! If both subaccounts were to expire my mortgage would double ;(

We've fixed ours at 5.69 percent for the next 5 years plus paid an additional 4k which will bring our monthly payments down to around £475. It's an Islamic mortgage so works a little differently.

We fixed to bring us to the end of the childcare years and have been saving so we can pay enough off to keep payments about the same. Shame really as I wanted an extra bedroom but I don't think it would sensible to triple our mortgage right now.

How is that even possible?

By not calling them crazy or unusual, since the everyday rate is pretty average if you compare rates in the last 60 years.
They only slumped in the last 10-15 years, and there's always been a view the low rates were unusual.

For anyone with a fixed rate ending, I would get a quote 6 months before the end, and hang on, see how inflation and interest rates change between the 6 month before end quote and a month before the end.

Meanwhile I would cut absolutely all unnecessary spend out of my budget including holidays, and save in as high an interest rate as possible account. I'd ensure I had no other loans or credit cards owing high % interest.

Decide whether to stick to a variable rate (if rates dropping), and use my savings to pay off a lump sum, or ease the pain of a high but dropping variable

My five year fix ends in April by which time I should only owe about £50k. Was going to be paid off in 4 years after that but may have to stretch it out.
Basically it will mean delaying retirement.

We are lucky that we have 2.5 years left and based on current trends we will have to pay approx £200 extra a month which is annoying but okay. I'm tempted to fix until the end of our mortgage term next time as we will only have 13 years left to pay

I do feel for people affected. I paid mine off after 25 years fortunately. My mortgage started out at 8.5% but at one point was 16%. (We’d had to borrow at way above base rate because we were penalised for our youth and the fact that the female was the higher earner). At one point we had £20 per month after paying mortgage and council tax. So I do remember how it feels to be in a financial crisis.

Hopefully pay it off before my 1.5% fixed rate ends in 2026. Saving like mad. I appreciate not everyone in this situation and we’re fortunate. We do still need to move one more time for space reasons though, and based on new rates our budget has decreased by 100k already.

We are fixed until the end of 2025 so in all honesty we're just waiting and hoping things calm down a bit as we've already got a large mortgage (£250k) and more than 20 years left on the term.

We are just coming to the end of expensive nursery fees luckily, DD2 starts school in September so we're putting the money we're saving aside with a view to putting it towards the mortgage and if our payments increase by that amount we will be ok as we're used to not having that money.

We have 2 products, account 1 we managed to re-fix recently before the very big hikes. It was bad enough (1.79-4.05) and added about £180 a month but it coincided with us getting 30hrs funding so we used that to offset.
Next year account 2 ends, it is smaller so even if the rates are massive it shouldn’t be more than another £200, nursery costs end completely for us about 8 weeks later so we will be using the nursery savings again.
I’m glad we have that option but we had rather banked on having that money to spend on life! But it could be worse, we won’t be in the complete shit.

That’s how I do it (I think working in finance spills over into home finances)

always good to see what might be coming and what you can flex to get through it

Our fix expires in 2027, so we're hoping to maximise investments until then.

Need to make a tricky call when we relocate in a year though. Hopefully can port the mortgage so long as market stays steady (we don't need to worry about our original equity because there was a local price spike relating to new infrastructure, so a negligent chance of negative equity).

But will be tricky to call how much we put into a new property if we want to spend more than our current amount - we're relocating somewhere cheaper.

If you were currently on a low fixed rate taken out 2 years ago (say 1.5%) and had an outstanding mortgage of the order of a couple of million.

Debating whether to sell another property we own and clear most of the balance. We are also seriously considering moving overseas. I don't think mortgages should be link to the general interest rate but rather fixed for the life time of the loan so people know where they are long term, which happens to be possible where we are considering relocating to which would have had us at 2.9% forever!

We bought in 2019, so our 5 year fix ends middle of next year 😞 we’re probably looking at an extra £500 a month, if rates don’t increase loads more by then.

We were originally planning a once in a lifetime holiday next September that we’ve saved for for the last couple of years. I’m not sure that will happen now, and we may well end up using the money saved to pay down our mortgage balance.

We are fortunate that we can (somewhat) absorb the enormous increase in monthly payments, but along with the other cost of living increases we will need to cut down on our spending. I feel for people who don’t have much else to cut back on.

I fixed for 10 years in may at 2.7%. Thank fuck. Probably the only decent financial decision I’ve ever made. It’s criminal. I really feel for ppl. Between this and the cost of living I don’t know how long this can go on for. We struggle as it is

We just had to refix this month an honestly looking at others amount I feel we have gotten off lightly our monthly payment was £600 it's now £730 for 5 years.

Manageable but big chunk of fun money has gone.

We currently have 480k mortgage at just over 2%. We are going to be looking at 1000s more every month. 1% rise is 4800 a year additional interest. 5% rise is nearly 25k a year extra, just in interest. In SE 500k might buy you a 3 bed semi....Ive says before, this is going to be a huge issue in Lyndon and SE for families in pretty bog standard housing.

London! Typing with left pointy finger

Payment currently 2500, we could afford to pay up to about 4K a month but no more. And not many people will even be in that situation.

New job. Saving the difference for now, but will all go on mortgage next year. We're looking at about £800 increase. Frustrating to be doing longer hours with more responsibility with nothing to show for it, but grateful that we can do it.

We’ve put a chunk of our savings into our mortgage, so we only have a small mortgage left now. Thankful to be able to do this.

We currently have £460k outstanding on our mortgage. The payments increased in May from £2100 to £2650. I got a 10 per cent pay rise in April which equated to around £300 per month after tax so that covers nearly half of the mortgage increase. I am waiting on a promotion (terms are being reviewed at the moment). I’m hoping that will cover a bit more of the payments otherwise I will be looking for a new position.

Our mortgage expires end of Sep but I fixed at 4% for 5 years in May. Currently on 1.8%. We're actually taking out equity to help fund private school fees but we don't need the money for a while so I'll get a good rate on that money in savings meantime. We did extend the term to the max we could get (24 years). Overall it's a £350 increase but I think if I didn't take out the equity it would be about the same as now with the increase in the term.