To feel sick and panicky

[yuri46]

Feeling so panicky about costs of everything. With childcare for two DC and a high mortgage I am freaking out about interest prices. We fixed 4 years ago at 2.6% (stupid now I realise, we had a low deposit and I'd had 6 weeks out of work a few months before meaning it was the lowest we could get). If the interest goes up much higher we simply won't be able to afford to pay our mortgage when we remortgage next summer. How much is it going to go up by? With everything else on the rise I am feeling sick

Ok don't panic. Have you done a family budget to try and see how much you are spending and where you can save? Can you afford to downsize? Move to a cheaper area?

Can you fix now? How much would the exit fee be?

Tbh fixed rates already now around that amount anyway.
Is it worth you paying the erc and fixing again? Think mse has a calculator for this?
Go with a broker - I used L&C.
Check out the tips on mse

The fee is £5.5k to leave now. Just checked and that drops to £2k if we leave after November

it wasn’t a stupid decision, because it bought you peace of mind for 5 years. That’s decision is made, forget it. Just because with hindsight there could have been a better decision, doesn’t make that a bad one.

Talk to a mortgage advisor. You can often secure a rate up to 6 months before the end of your fix, so you might be able to fix this winter. You’ll also have paid off 5 years soon, so if you really have to bring your payments down to balance an interest rise, you can look at extending your mortgage term again.

Panicking without investigating options is pointless and stressful. Look at your budget in detail, and speak to a mortgage advisor.

I spoke to our broker this week. We can extend but only by two years as the length of loan was already so big.

We did a budget spreadsheet a few months ago but we will look at this again this weekend I'm sure there's some savings to be made. Thank you

If you've got any wiggle room in your budget could you overpay your mortgage a bit? Then you will have less on the mortgage when it's time to remortgage so the payments might not rise too much (plus you will be used to paying slightly more).

Alternatively, you might be able to slightly extend the term of your mortgage so your monthly payments are less (you will pay more interest overall with a longer mortgage but for me if it would potentially be worth it).

We are currently able to get slightly more interest in a savings account than the interest on the mortgage so I'm putting our overpayments into a savings account. That way we've got it available in case of an emergency and then just before we remortgage we can pay a little chunk off it (it won't be more than 10% of it so we won't have fees).

At the end of the day if you can’t afford your house then you sell it and buy something smaller that you can afford.

We are also having the same conversations and we’re in a decent position finance wise. I think everyone with a mortgage is starting to sweat a bit.

its going to be fucking horrendous with house prices so high plus food, fuel and energy costs going stratospheric. I’m not sure historically if that’s ever happened before?

That’s such an unhelpful thing to say when all houses are expensive and renting even worse. It’s the equivalent of LTB when you have zero idea of what the persons life is like.

Plus selling up and moving is extremely expensive!!!

1970s

Brexshit dividend

When we bought our house in the 70s the mortgage rate was 15%! We were both on very low incomes but we had to cut everything to the bone to pay it. So 2.5% seems like nothing to me now. That said we didnt have children and all the associated expenses. I really feel for people starting out now.

The interest rates certainly hit 15% in the 70s (1976 and 1979 spikes) but it wasn’t a consistent rate throughout the decade.
If you look instead at house prices as a multiple of earnings, the 70s look like the glory days 😭

I went through all of this 20 years ago when I bought my house. Its so stressful and you spend alot of time second guessing yourself, but you do what is right at the time. Don't panic and stress yourself out about the future. Its totally unknown. Take care.