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 ;(

Would love to learn how you model this .

We’re selling up and moving abroad. To be honest it was always in the back of our minds after Brexit, and this latest shit show has just cemented it. DH has connections that will hopefully lead to a job, and I am currently taking a course which will allow me to use my expertise and set up a business. We’ll be gone within the year, all being well.

I should add that we’ve lived and worked abroad before, so although we planned to settle back here it’s not the unknown for us. We are a fairly high earning family, but it feels like there’s nothing keeping us here. There are far better prospects for us elsewhere.

I've been overpaying for most of the 5 year fix I took out in 2019. We can absorb an increase up to about 10%. Was hoping to reduce term at that point and continue to pay the same. But will need to see what rates look like at point of remortgaging. Very glad we stayed well within our our means. I am very risk averse!

Mortgage rates are still on the average to low side. They were kept artificially low for a very long time after the 2008 crash, so it was inevitable that they would have to reset eventually. It would help for people to accept that these rates are here to stay, and may increase, and when purchasing property always work on the basis that you have to budget for rates to keep rising.

Ours has gone up from £70pm to £700pm! We lucked out by taking out a lifetime tracker of base rate plus 0.18% just before the crash in 2008 so have been paying probably no more than 0.5% from 2008-2021.

We've recently paid off a big chunk so has gone down to £350pm. We will hopefully be able to pay it off by the end of next year.

Rates might go up to 6.5/7% for a while and then gradually come down, but they are very unlikely to go below 3.5/4% again, 5% is the historical norm.

I'm surprised so many are saying they can absorb the rises of hundreds a month with a bit of belt tightening. Seems lots of people have had significant pay rises also. I guess this is what the government want, they want people to stop spending but it's going to hit some sectors hard. It's a worry.

Mortgage had gone from £1,500 to £4,850.

how has it changed that much?!

Multi million pound home I expect.

Our fix ends at the start of 2027 but I’m preparing for an increase now based on 5% rates. This would increase our mortgage by £2k per month. Frightening.

whats even more frightening is the erosion of lifestyles that people are commenting on. I fear this isn’t a blip, it may be life moving forward in the UK. Middle classes getting smaller by the year, the mega rich owning all the assets. Thanks Rishi for lining your friends pockets

Of course they won't help. Young homeowners (let's face it, that's who most at risk) aren't a key voter base. We're in this situation in the first place because none of them have given a shit about us.

whats even more frightening is the erosion of lifestyles that people are commenting on. I fear this isn’t a blip, it may be life moving forward in the UK. Middle classes getting smaller by the year, the mega rich owning all the assets. Thanks Rishi for lining your friends pockets

Even if people can afford it it's hard to get your head round servicing so much more debt & losing that money from being spent in the wider economy as opposed to going to banks

Wer going to go on an interest only mortgage for 2 years when fixed term is up in December, then hope an prey that rates come down.

I am fixed at 2.35% until 2027. I moved house yesterday and increased my mortgage by 40k and am sitting here wondering wtf I have done. That said if it goes to 6.7% it would be another 350 per month but I am planning on overpaying by 500 so can ride it out. Fortunately in my line of work overtime is plentiful but who wants to work overtime when they are full time anyway. I really want to get it paid off in 14 years by the time I hit 60, if not I will be using some of my pension lump sum to pay it off. This is where being single and only having one household income is shit.

@stevalnamechanger I do similar. I just have my normal budget and then a section where I put known changes to income - eg payrise (use a basic 3%), end of loan, end of electricity fix. I then also list everything I need to save for. Uni fees, etc. I can then see how much I can save every month.

I tend to not take any increases to income into my general spending pot.

Our fix ends summer 24. We have a high amount of borrowing and are already on a term which takes us to statutory retirement age. Not sure if we can extend term beyond that?

Things we have done to try to buffer:

Been overpaying by £250/mth to pay off capital and get used to a higher payment. Increasing this by a further £200/mth in September

I got a new job with a 20% pay rise. Likely most of this will go on mortgage (which is why we will increase payments in September)

DH negotiated a 10% rise with his job (he was underpaid in his grade so really he should have been earning more the past year)

Delaying taking out any more credit for loans/car/big purchases to ensure maximum borrowing power

Things we might do if we get to 2023 and will struggle:

Go interest only for a bit and overpay whenever we can

Consider weekend pt work for one of us (but additional tax might mean it’s pointless)

Total last resort will be to seek help from a very well off relative, but I really don’t want to do this. The help would be offered I’m sure but I would rather sort my own issues.

My fix ends in September but I only have 3 years left on the term. If rates had stayed low I'd have kept the mortgage but as it is I'm just going to pay it off as I have the savings to do so. Which actually then means more disposable income each month (although some of it will be used to rebuild the savings). It would only have been about £60 more per month anyway as it's not a huge amount, but I may as well get it paid off.

That's a huge increase . I'd definitely be contacting a mortgage broker to get the best deal as soon as I could.

We are very thankfully mortgage free these days. Yes, we rode it out through 15% rates and it was tough and we were skint, but you lot have it much worse. By and large, you've had to take on huge mortgages, proportionally way much higher than my generation, and many of you are already on 40 year mortgages - I don't remember more than 25 years back in our day. If you already work full time and juggle the family as most of you do these days, how the heck are you going to manage second jobs too? That's assuming there are any if a recession starts to bite.
Rents are at sky high levels too, which rather takes the edge off of selling up and renting, you've got to live somewhere, there's sod all social housing, so either way you're screwed.

We're fixed until 2026 on a low rate. Current mortgage is £800 per month and nursery hill is £900-1000, which we won't be paying come 2026 when both DC are in school so we're lucky that rather than being better off as planned we'll just have to use that extra money on the mortgage. It's grim, our house is in no way extravagant we just live in the SE!

That’s surely a struggle with inflation being as high as it is though? Most people’s pay increases are used to pay for increases to fuel/food/childcare costs etc. I haven’t had a pay rise which matches inflation for years.

I'm on a fix at 1.04% until September 2026, so am saving as hard as I can just now.

I would really like to move to a house from my flat, but am a single parent in my 50's with a mortgage till I am 70, so realistically won't be able to move now.

I hate where I live - a fixer upper 3 bed flat right on the flight path & can't face living my days out here but that looks most likely.

Most mortgages will let you port the deal over to your new property. Just something to keep in mind if that's a contributing factor to your decision.

I’ve always done my finances a bit differently to others.

The stupidly low interest rates were an abnormality with with QE inflation and a return to the mean plus an over correction, was likely. so I took the opportunity to invest tax efficiently the difference between what is historically a normal rate of 3 to 5%, and what we were paying, and at a return about about 18%, it compounded quickly and so I will pay off the bank. When we got to Covid, I saved more, but wasn’t entitled to furlough.

We weren’t tempted by a mansion at any point and thus never increased the mortgage, never over stretched ourselves.

So when our current fixed rate ends, we will clear the mortgage.

Liquidating all our savings to pay a big chunk off the mortgage