To be terrified about mortgage

[melodypondisasuperhero]

We finally managed to get our first mortgage last year and now this is happening. Our rate is 3.09% which runs out in August, currently the follow-on rate is 5% but I imagine this will go up several times before the end of the fix. We could manage 6%, probably just about 8%, but any higher than that and I really don’t know.

AIBU to be terrified? Or am I missing something?

I am absolutely terrified. Mortgage expires in December 2023. We massively regret not fixing at 5%. Foolishly took the advice of our broker and will probably live to regret it. But who was to know that we would end up in this situation. Anyone who voted for this government should be ashamed.

I’m trying to buy, so no it’s bad for me too… just pointing out how fast prices have risen recently, that even a 15% drop only takes us back to 2021 prices.

Fear of debt left me working hard to save for my first house only to be slowly priced out of the market in my ideal locations. I have found a compromise but it needs a lot doing and now with interest rates and being a solen income family, any benefits have been lost. Things are looking scary. I don't know what.to do. Except await divine support

People who are already struggling with cost of living crisis do not generally have pots of money to overpay their mortgage. Of course this is very worrying. Anyone who has voted for the existing government needs to take a good look at where we are now and not forget this moment. We need to get rid of these idiots.

I really feel for you we went through this 30years ago the stress was horrendous but there is always light at the end of the tunnel try not to worry too much; talk to your mortgage broker sooner rather than later & also speak to your bank you don’t need to go with them just listen to what they can offer you just remember they need customers too so they will want to help

I totally agree.

Not only are you clearly a not very nice person, but thick with it
A housing crash would be a disaster for the majority of the population
You might be feeling smug but trust me you too will feel it one way or another

@Jmaho I agree hopefully, @PetuniaT will feel it when she needs to sell for care home fees!

I think the way prices of everything is going up, I'd be inclined to save any extra overtime money to cover any potential increase in the overall cost of living. It's great to overpay the mortgage but only if it doesn't leave you so short of savings that you can't afford all the bills in 6 months or a years time and end up unable to pay the usual payments.

The looney far right Tories are turning the UK into a free market Singapore style economy. If you can't afford it then you are f####d. They'll be cutting on welfare benefits, NHS, the lot, just to make their fat cat mates even richer. People will undoubtedly lose their homes because of this reckless economic policy, but don't expect the government to help you. A disgrace.

Things will only get worse unless Liz and Kwasi relent. The conservatives should do a no confidence vote and boot them out now. It could get worse.

They are right that we should go for growth, but this is not the way to do it. Long term intelligent investment in our country is the only way. Tax cuts for people who don't need them are pointless.

OP, I really hope this is the dark before the dawn. This is a democracy, so maybe someone will grow a pair and step in before things spiral. If they spiral you won't be alone. Housing market crash, pensions going bust, etc. We will all be hurt.

Same stressed out ours runs out in December we stupidly got a two year fixed as our last mortgage was 5 and we sold old house to buy current and didn't want to get another 5 year fixed in case we wanted to move or do stuff and now stupidly regretting that so much

Indeed. They refused to call it a budget even though it clearly is one because if they had the OBR would have had to do all the backup work mentioned to test the effects on things like markets, interest rates, gilts, pensions etc.. So they didn't. Incidentally, for anyone feeling smug because they don't think they are going to be affected, a few pension funds nearly went bust today, and would have done without the BoE stepping in. This clusterf*ck is going to affect most people except the very wealthy (who will gain by it, at least in the short term).

Can you work some extra hours? Take a second job?

@melodypondisasuperhero
A friend was a newly single parent when her husband left, and he left her with zero maintenance.
Interest rates were 14/15 % then..{It seems unreal} 1990's?

She went to an interest only mortgage, it didn't erode the Capital, but when interest rates dropped again, she began paying back the capital.

She managed to pay the mortgage off a few years ago.

Maybe do something like this, if you are in a real fix??

W ensure worked out that ours is going to go up by 450 quid. We are screwed.
I've just heard in the news that pension funds are also tanking and would have been destroyed today had the Bank of England not stepped in.
This is terrifying. Where is the prime minister? And frankly why are people not out bloody rioting in the streets? I'm so so sick of living from crisis to crisis at the hands of these idiots.

Yes. Mine went up from 15 to 17.5 per cent in the 70s. We just cut back on new clothes and bought cheap and cheerful food. No takeaways, no internet, no satellite tv, no mobile phones, so not the outgoings people have now. Is there an option to extend the term for some of you?

There's a post here suggesting that the OP work more hours! OMG that is laughable. Get a grip on your little Tory mentality. Are we now expected to work every hour god sends just to make the rich richer? Get this bunch of swine out of government and anyone here who voted for them should hang their heads in shame. Unless you like the idea of destitute kids?

I saw that. It made me absolutely furious. I'm a care home manager. I have worked my arse off for years never more so then during the pandemic when we were abandoned and lied to by these fuckers. I'm not now prepared to work more hours so they can make themselves and their mates richer whilst I can only pay my team 10p over minimum wage. I'm raging.

Yes. Mine went up from 15 to 17.5 per cent in the 70s. We just cut back on new clothes and bought cheap and cheerful food. No takeaways, no internet, no satellite tv, no mobile phones, so not the outgoings people have now

And don't forget the huge wage growth in the 70s, will we see that today?

No Avocado's either. But this is a governbankment issue really, played loose and fast even after 2008! JAIL THEM THIS TIME!

Where the fuck is Liz Truss in all of this? Nowhere to be seen, not wanting to be associated with the absolute shit show SHE and her joke of a Chancellor have created.

And the selfish right wing Conservative party members who voted her in should be hanging their heads in shame, except I expect some of them are doing rather well out of the changes to NI, 45% tax and corporation tax.

Our fixed is due to end in spring we paying to get out early as of yesterday the best deal we could get was less than 4% but still an extra £400 per month its a 42% increase per month
And it could still be worse if we leave it

If the house prices fall by 25% (2008 crash) - then that affects LTV right?

Yes, doubly shafted.