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?

@Xenia If you have the money to do that then I don't have sympathy. You could have retired early as well.

"demand drives price."

No it doesn`t, availability and price of credit plus sentiment drives price, no one looking at houses to buy in the UK is homeless, when the monthly payment becomes unaffordable (about now for most potential buyers) they will stop buying and stay where they are.

Our loan to value is 40% but the lowest rates I see quoted always refer to 60% LTV. Having more than 40% equity doesn’t seem to give us any advantages (other than a cushion for a house price fall).

To an extent it does though, there are certain places in the UK that are more desirable to live in and as a result property prices are higher there than 10 mins down the road, those desirable places will be affected less by any decline in property value

^^ you’re getting confused by what I meant in terms of price, i meant house price not mortgage rates

One thing I don't understand is why people who voted Conservative in 2019 and for Brexit in 2016 aren't angry. Surely they didn't vote for this ?

If Jeremy Corbyn was PM, or we were still in the EU, the pound would have crashed in French. Or kilograms.

onthefence, luckily we live in a UK where everyone does not have to be the same. I just wanted to help each child buy a first property and I enjoy my work so no problem for me in working until I die. Also it becomes a matter of inheritance tax. If I live 7 years from the gift to the five children then the state does not take 40% of the money. If the children inherit it when I am 80+ then the state takes 40% of it away . I of corse know 90% of people do not have enough assets to pay any IHT particularly those who are married who get DOUBLE the IHT exempt band than we single women get. These are very nice problems to have and I hope I die with no money at all from an IHT point of view, a tax Sweden abolished entirely.

I am content with my choice - giving my ex husband just about all I had in my early 40s on the divorce (he is a lower earner), then paying for the children's education and first property. After that they make their own choices. I do have one working from home here today at my house so I suppose that is a minor subsidy but not huge and essentially the older ones are independent, self supporting and on their own and both daughters are married, work and have children.

I certainly remember difficult times with the mortgage including after my divorce with a 6% mortgage rate, interest only and much else but I am certainly very fortunate to have the health to work full time and happily do so which is not something everyone is able to do.

high interest rates have always been difficult for people even back to biblical times when Christians were not even supposed to lend or pay interest (something Isalmic finance today in a sense revolves around too).

I got interest on my savings this week 77 pence! I will not be spending it all at once. The mortgage rates go right up but the savings rates never seem to do so with the same speed. Same with council tax - took 6 months to get my 25% single person discount and the day the twins' course finished the council gets it immediately right back to no discount, 100%.

Our new mortgage rate is almost 8%.

This does worry me because the husband was made redundant and took a 20K pay cut accepting any position.

I am currently signed off from work due to a bully who has successfully bullied at least one other woman out of a job. I’m now looking at any part time roles just to be able to keep the household ticking over.

I know people say a good broker prepares for 10% but most of have never lived with it at 10pct, I am in my early 40s so was a baby and, you just don’t expect that to happen!

It’s a very worrying time tbh.

That seems very high, I've just looked on moneysaving site and rates are lower than that. Is there a reason why it is so high? Surely staying on a variable rate would be lower than 8% at the moment.

I'd assume you've a non standard mortgage for it to be 8%?

Yes, I feel your frustration. As fellow boomers, but with health problems/disabilities, DH and I are not exactly rolling in it, quaffing champagne....🙄

We have helped our kids with getting on the housing ladder, we manage on what we've got, but younger people seem to think they are the only ones that ever suffered.

Nope - we've all been there, got the T-Shirt.😉

There was a programme on TV last week (Winter of Discontent 1978), which showed exactly the same problems as today.

Rising inflation, rising prices, low wages, fuel shortages, strikes, discontent etc.

The economy wheel keeps turning - todays young people/parents are no different to previous generations.

We had to just get on with it, as todays generation will have to do.

Signed off work because of a bully 🤦‍♀️
unless this bully physically broke both your legs I’m sorry I’d be getting back into that job and fighting to keep your house

Yes, I took out a credit service ‘insurance’ for my mother and also credit cards. I know. Big mistake on reflection.

she cancelled the direct debit and never told me, ironically I give her a set amount each month to cover her expenses but she did this on a lot of things even her phone and internet because she ran up some debts and was using the money to pay them to stay above water.

They put two CCJ’s on my file just before I applied for a mortgage.
as I was then on May leave when renewal came in, I had no income besides SMP so we accepted what they offered.

im now back working but it’s probably two late to switch.

*Mat Leave
*Too late

sorry my phones mugging me off.

@AuntSalli

Thanks for your input.

my husband has enough to cover the absolute essentials and bare bones.

being signed off because of anxiety and depression is not my idea of fun. I was signed off yesterday after relentless bullying that forced my colleague to just walk out.

Don’t worry though, I’ve got an interview next week at another company.

thanks for your constructive feedback though.

Liz Truss just made a speech. How long before the mortgage rate goes up again?

@ComebackQueen how on earth did it get to CCJ level? If the cards were in your name then you would've been informed when the first dd bounced.

It's also probably worth stating on here that you've got a non standard mortgage and it's 8%, people are already concerned and need to realise this isn't the high street offering.

Sorry I should have specified the insurance etc all correspondence was at her property.

her and my father were financially irresponsible hence not being able to afford credit, I would still transfer her a bulk of money to cover the essentials.

Only when I got a copy of my report the broker pointed it out.

yes, to clarify it’s non standard mortgage, although my friend is on a high street mortgage and hers has jumped to 6% so not wildly dissimilar tbh.

@ComebackQueen I don't know of any high street lender at 6% (assuming you're talking about fixed rates).

You're also very financially irresponsible, maybe learnt from your parents?

I don’t know if it’s fixed - she mentioned she’s at 6pct.

whereas my sister fixed for five years at around 3pct just before covid, now that’s savvy!

Most likely, yes, they do say you may repeat mistakes.

I presumed she was paying given she was given the money.

given I have never missed a payment in my life, I wonder who I got that from LOL.

@ComebackQueen rates pre covid were lower than 3 pc, more like 1-2%.

Giving financially irresponsible people money, credit, money to pay the credit is irresponsible! Look at the mess it's got you in.

Mind you giving a friends 1 year old a £200 gift and they don't even say HBD is also irresponsible lol!

Well she fixed at around 3pct, compared to my friend and I - that’s smart.

she hasn’t had to switch during Covid nor this impending cost of living crisis.

In fact I know someone who claims they fixed for ten years, if that’s true that’s even smarter.

It’s a good lesson learned if a someone what costly one.

The CCJ will be gone by the time we need to ‘renew’ or sell the property.

LOL @ the Birthday shade, I did genuinely laugh at that, so thank you, made a bit of a naff day much nicer just to chuckle.

I’ll now see how many people on other threads hold that HBD against me with their thinly veiled digs.

@ComebackQueen nothing in my post is either thinly veiled or a threat! It's a statement saying you've landed yourself in financial issues partly because you're irresponsible.

Sorry dig!

It's a statement, not a dig!

"The Halifax, part of Lloyds Banking Group, will put up the interest rates on a range of deals for new borrowers to well over 5%.
It follows a string of major providers in re-pricing products, which has pushed the average two-year fixed rate deal to 6%.
Four days ago, the rate was 5.43% and at the start of December it was 2.34%."

www.bbc.co.uk/news/business-63131509