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 ;(

Paying it off. Five year fix is up in September. Not much left owing so will end it.

1st time buyer 2 year fixed at 1.64 ends in December. We've just got a deal with Virgin Money fixed for 5 years at 5.30. Payment gone from £700 to £1025. Luckily I got a promotion in January and nursery/childminder fees stop in September and a loan payment stops in November so we will be able to cover it.

Desperately needed new carpets and new car for DH will be out the window though. Just when you think you are doing okish something comes and gives you a right gut punch!

We still own our first flat outright, which we moved out of to buy our current house. We are selling the flat now, so when that goes through we'll pay off a huge chunk of our mortgage. Then we'll stick to a variable rate so we can overpay without penalties. Aiming to clear the mortgage as fast as we can.

I think we've got off fairly lightly compared to some. Ours is going up by £120 I think. But that's still £120 we need to find somehow! 6 of us on one salary here I'm a SAHM and it's getting harder and harder to stretch the budget. Also have school uniform and shoes to buy this month 😱

sit in the corner and rock.

Mines due in a couple of months and im just shitting it. I dont know if to fix for 2 or 5 years. I plan to move within the next 5 years anyhow

Our 1.69% rate is due to end in Dec 2025, so really hoping that they have stabilised or dropped by then. Currently ours would increase £700 a month if we fixed now.

I am due to start maternity leave in October and hoping to be back working in autumn 2024...although we will be paying nursery costs. My current fixed term contract ends during my maternity leave (contract type is usual for the industry) so no guarantee of returning to a job. Employer is super keen to have me back, but I am not naive and know how things often change.

I have a complicated excel spreadsheet of loads of different scenarios based on different rates (between 3-8+%), terms lengths and overpayment amounts.

Plan A - Wait, watch and monitor. Open high interest savings account and put any spare money in there. Have a frugal maternity leave and reassess where costs can be cut and actively do a budget each month. Encourage DH to utilise his lucrative "side hustle" to support us. Hoping that by 2025 we can secure a deal which is "only" between £300 and £500 more per month.

Plan B - Same as above, but if rates are still >6%, then plough a substantial amount of our savings into mortgage and pay off a chunk, reducing monthly payments to match plan A. No savings will be left, but needs must.

Plan C - If rates are very high and I haven't secured a full time job, then plan C includes less desirable options such as taking a loan off family members to see us through baby years or me taking a weekend/evening job.

Ridiculous and worrying situation all round.

Oh I nearly forgot....we will buy a lottery ticket once a week (tax on hope).

Mine has gone from £98 to £318 currently. I could pay it off but the cost is manageable.

Waiting for a crash to buy.

When the interest rate hit 15% (fifteen, not a typo), DH & I did what everyone we knew did.
Start by talking to the lender about increasing the term.
Cut out unnecessary expenditure - we were brutal.
More importantly, get extra jobs. We weren't too proud to work at whatever job would give us extra cash.

Not sure they'll be a crash . There are far more buyers than properties and most people will weather the storm .

Same here , I had to get a second job when they hit 15.4%.

@kitsuneghost

I think you might be waiting a long time
last big recession 90s my husband lost a house and a flat so we have first hand experience
it’s much different now due to fixed rates
so previously you had lots of property on the market at the same time at greatly reduced prices

this time it will be a slow death of a thousand cuts due to people having fixed rates
if everyone had a variable rate then I would agree with you as lots of people would be trying to sell at the same time

my son is buying he’s isn’t a typical FTB as he had a big deposit of around 90k plus all the fees and he got a five year fix of 4.9

I would still tell him to buy now rather than later

We are coming to an end in January. Absolutely s*ting it. We stretched ourselves to buy the dream house in covid and currently have a 1.99%. We also need to do an extension but have this money in the bank. Finally we have just started the long haul of nursery fees again.

We are looking at anywhere up to £1000 per month extra. About £300 of this can be absorbed by pay increases. The remainder will need to come from tightening everything we have. Hubby can do some extra work through his job and worst case we will need to use our banked extension money. This is problematic as the extension is a must and not just because we fancy an instagram kitchen.

I’ll get another job if needed but with three small children this may break me as I already work full time.

No where near as bad as some people but it feels pretty concerning. We also plan not to fix but to go for a tracker on the basis that we don’t want to be stuck paying 5/6% for 3/5 years if we don’t have too. We’d rather have the uncertainty for a couple of years but perhaps that comes from a place of privilege knowing we do have money in the bank.

5k increase? Fuck.

But if we did that we could never retire.

What would the worst case scenario be? If even 50% of people can’t pay their mortgage would all those homes be repossessed? What would that mean for the economy - would houses prices drop again?

Does anyone think the government will help out homeowners? I don’t think they will as they don’t give a shit about us but I have heard people say maybe we will get a payment like the covid payments?

Ds2 is in a position to buy (1st time buyer) he looked at a repossession last week which had been reduced by 27% to bring it into his price bracket. Due to the condition, he would be asking for another 20% to offset the work, and the interest rate rises.

He can live at home and is in no rush, with interest rises shooting up he is reconsidering whether to buy now or wait for a year for when the government's help package finishes. I wouldn't be counting on getting those buyers.

We’ve done an extra payment a month for the last year, hopefully that will have knocked more interest off. Our fixed rate is up next July. We will likely have to extend the mortgage length.

We will extend the term. We’ve done this a few times in the past when having babies etc, to lower monthly payments.
we will extend it back to 25 years if necessary (from 17) - DH would be 75 but we will downsize long before then.

I’m planning to vote Labour at the next next General Election. It’s all down to the Tories.

Ours has just gone up by £377 per month, we can pay it, but we can also definitely tell the difference. No more impromptu dinners out, buying things as a treat etc etc, we pay the bills, and we stay in a lot - rubbish!

We're SE, semi-detached house. Mortgage is increasing by £1500 a month come January. I'm lucky enough to receive a bonus as part of my package and will use this to top up our monthly income and cover the cost. It will leave us with no savings / nothing extra for a couple of years but hoping we will ride out the storm.

Every generation has their challenges but feeling a little frustrated at being on the end of insane house prices, highest taxes since WW2, childcare costs and interest rates.

I'm selling up and relocating to clear mortgage. This is assuming I can actually sell. Market still appears to be moving well where I am in Herts so we will see. My situation is really complicated and I wish I wasn't having to do this but needs must.

For those that are selling up are you worried about this? This may be something we might have to do and we are concerned that the market being flooded with houses therefore bringing prices down.

I have no idea what we'll do. We were living frugally long before we bought a house - second hand clothes, no takeaways, cut our own hair etc. If rates stay as they are now our monthly payments will go from £1450 to just over 2k next May. We're totally screwed, there's nowhere for us to cut spending unless except by skipping meals. We have a 3yo and a baby so can't easily take second jobs - the cost of childcare means it's not worthwhile.
The only thing I can think of is try and get cleaning work in the evenings after my normal job, that don't mind me bringing a baby along.
Years ago I used to raid the big dumpsters outside of supermarkets at closing time, when they threw out all their unsold, out of date food. Only things in packaging obviously, but you could get loaves of bread, packaged fruit etc. I dread doing that again but I honestly think it will come down to paying our mortgage or buying groceries.
It's overwhelmingly awful.

We had reduced our term so increased it again to offset some of the additional cost