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 ;(

@UrsulaIsMyQueen

Yes it is getting a bit tight.....I've been doing it for about 4 years and at some point I will need to up it a little bit! However I am also on prolific and tend to get about £40 a month in from that so am using that to subsidise that.

But we have definitely cut back - especially takeaways and less paid days out. My DD are getting older so they often just pop out with friends anyway rather than me needing to amuse them. I have never been one for grabbing coffee out though etc.

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%

What investment vehicle did you use for these return & how many years did it take?

Our fix ends in january and we have 7 years £25k left. Most available mortgages seem to have fees attached which are not worth it for such a small amount and few years. Fortunately the increase wont cripple us despite us being low earners but DH does some small amounts off grid work we use for holidays and treats and this will now go on bills. He works for free in exhange for wood so we wont freeze over winter at least.

Annoying.

I’m interested in this for a number of reasons. Currently our rates with our lender are lower if your an existing customer than a new one.
Also a lot can happen between now and January - why would you fix now when there are so many unknowns?

I’m not saying you’re incorrect but am genuinely interested in your view as to why?

No we haven’t either, there isn’t a huge amount to cut back on, bar the children’s extra curricular activities which would be an absolute last resort.

Just fixed for 5 years at 5.7% which is an utter shitter but it is what it is. Deal doesn't end until December so hoping for some rate improvements before then but not holding my breath.

Luckily we are fixed until late 2026. Because when we moved in 2021 that was a big increase to our mortgage (so high LTV) we didn’t have the best rate anyway, so I’ve done some calculations and we would be looking at a £400pm increase. I’ve started overpaying by a small amount and plan to try and increase it each year so that when we get our new payment amount our finances won’t be impacted. I understand it would be better to put it in a savings account but I know I’d spend it 😂we will also be finished paying nursery fees by then so that should free up some cash flow. I had hoped we’d have more fun money at that point but sadly doesn’t look like it! We could have borrowed much more money in 2021 but we chose not to and I am so glad we did now!

Took out a 5 year fix in 2021 at 1.29%, 18 year term. Mortgage around 150k. Have over paid 10% each year, plus my annual repayments, plus using investments I have, means I'll pay off the whole balance at the end of the term in 2026.

This was always my intention as interest rates were always going to rise. Paying off mortgage is no.1 priority, meaning work to the house, any big spends etc will have to wait. This year's holiday was camping, which was perfectly enjoyable, you get the idea.

You can get savings accounts that lock your money away, and you have to give a certain amount of notice to access them, so you can't impulse spend savings. Zopa do one, but I'm sure there are loads of others.

I'm a solo parent. Work full time. My fix ends in a few months. I secured a new rate last week - 6.24%. Repayments just over £300 more per month. On top of that, my leasehold fees (service charges) have increased a lot with a new management company.

I changed jobs this year to a fully remote job, so I no longer have to pay high train fares. I will then tighten things as much as I can. I'm also thinking about reducing my pension contributions slightly.

I live in the South East so I'm also thinking about relocating somewhere cheaper. I have no family in my area but I'm still weighing it up as DS is thriving at his school and has good friends here.

"Grim" has got to be the biggest understatement of the year! An extra FIVE THOUSAND POUNDS A MONTH?! And here I am, worrying ours may go up a couple of hundred, and how that will make life extremely difficult. Who can just find an extra £5k a month?!

Please contact your bank and ask if there is a lower rate that you can go on

I have just fixed my mortgage for a year so it is manageable it went nearly 50% in 18 months (variable)

the banks do not offer all their rates online or advertise them you have to ask specifically (shocking tactic) regardless of you are working on a payment plan, asking for a mortgage holiday

this has allowed me to keep hold of my flat I simply wouldn’t have been able to otherwise what I shall do next year I’m not sure yet but hopefully things will have settled down

We arranged a 5 year fix back in September at 2.84% which started this January.

Not a brag - we're late to the house buying thing as didn't manage to save the deposit til we were in our late 40s/early 50s, with two teenagers who need their own rooms, and so as we're paying off the mortgage over a shorter length of time it already takes up half of our combined salary.

We can't take any chances, and even back then it was starting to go up (just before the disastrous Truss/Quarteng government) and was being predicted to carry on. On our fix we now pay £300/month extra, but if we'd waited we'd be paying over £1K more a month which would be a disaster.

Even now, all it would take is for one of us to lose our job for 3 months and we'd quickly go under.

In 5 years, the payments will be easier to cope with as teens will hopefully be in their 20s and will be either working and buying their own stuff (and contributing to bills) or living elsewhere and paying their own way. Hopefully our wages will be higher too to cope with the extra payments.

If we were paying what's outstanding on our London flat (almost 500K) at 6%, we'd be selling up and giving up on home ownership altogether at our age.

We took the decision to use every penny of savings we had to pay the mortgage off 5 years early. If we hadn't, we'd have ended up spending a few grand more overall, so we think it was the right choice. We've had to go without some luxuries this year but, ultimately, I'm mortgage free at the age of 32, which I think is quite good.

This a million times. I think the ripple effect will be huge and nobody talks about it.

I think a lot of people are being very shortsighted and not looking at the bigger economic factors.

Once unemployment rises and more people are in negative equity with fewer options around remortgaging, many of the ideas on this thread will be moot.

£5k a month increase is a shocker. I hope you have the means to cover it.

Our plan is over pay every penny we can afford to get the balance down and clear it as fast as possible. No overpayment restrictions on ours thankfully, that MSE calculator helped me convince DH when he saw how much we’d save. It’s a good tool

Our 5 year fix ends in November we managed to secure a 3 year fix back in June at 4% with our existing lender taking our payments from £835 to £1040 a month. Could be worse we were hoping to upsize but now priced out going to have to hang on here for a few years yet I think.

Son has 30hrs nursery funding and I've recently got a new job with a £10k per year pay rise so we will be okay. We were hoping to have another baby next year but really not sure now. Planning to save most of payrise into high interest account for maternity leave/over paying mortgage

What do you suggest then? People are just doing their best to keep their roof over their heads.

So what would happen? Will all of us homeless? What’s the worst case scenario?

I don't understand this comment. How are people being shortsighted? What exactly are people supposed to do other than make the best of current circumstances?

Fundsmith equity, accumulation fund. You can access the etf via an Isa or Sipp, as well as general investment accounts.

u dabbled with high street bank ISA’s initially but that was a waste of time. I re-started investing in 2007/8, initially bank shares. From 2010 til October last year is when I made the bulk of my returns, and realised what I’d made was more than enough and index were crazy, and cashed in.

I guess if someone has a mortgage that they need to pay £5k a month on there must be the option of moving to a cheaper area or smaller house unlike many who will not have that option.

@Clutchy - sorry ( genuinely) what are you suggesting is short sighted specifically and what is it you recommend instead ?

Not having a dig, I'm just not following you ?

It's an absolute bastard. I actually don't know what we're going to do.

I expected interest rates to go up but not so quickly, I expect that is the same for most people.