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?

[Miriam101]

Ours runs out next month so DP has been trying to get a new one today. Nightmare. I think we've found a new one and it's not as bad as we had feared- but it's still an extra 500 quid a month. Fuck me.

[fromdownwest]

@melodypondisasuperhero

@PosiePerkinPootleFlump I’m hoping you’re right but looking at my banks website they are offering a 5 year fix for <5%. I really want to believe they’ll still be offering that in August but it seems unlikely.

Nationwides new rates for a 5 year fix range from 5.19% to 5.84%

[fatnotfluffy]

We also bought our first house last year on a two year fixed rate, which runs out next September. We are focusing on overpaying at the moment, as I believe our best chance of getting a better deal when the fix expires is to improve our LTV - currently at 84.6%, if we can get it below 80% in the next year, that should help enormously. YANBU to be worried, but you're definitely not alone in that

[fromdownwest]

@Trees6

If you remortgage to a new lender, are you obliged to use a solicitor to complete the process?

Yes, as they will undertake the transfer of title and the transfer of funds.

[MarinoRoyale]

Just to reassure anyone in this boat that there are strict rules mortgage firms have to adhere to when dealing with customers struggling to pay/get into arrears. There’s many stages to go through before anyone gets close to losing their home so please don’t panic. My best advice is to speak to your mortgage lender as soon as you are starting to struggle, don’t bury your head in the sand and have a discussion with them about how they can help you if you’re struggling.

[vanHalen]

@melodypondisasuperhero

I’ve requested to go full time at work which will mean doing some work after picking 6-year old up but oh well. If it’s approved I’m planning to put all the “extra” each month into overpayment but with the mortgage being so new still I don’t think it’ll chip away a huge amount. 😬

we have downsized in a similar situation. Would you consider that?

[toomychtiss]

Nationwides new rates for a 5 year fix range from 5.19% to 5.84%

I just checked that & found 2,3,5,10 yr all under 5

[fromdownwest]

@toomychtiss

Nationwides new rates for a 5 year fix range from 5.19% to 5.84%

I just checked that & found 2,3,5,10 yr all under 5

They expire at 8pm tonight.

[Yabado]

My son is buying shared ownership and he has a 90k mortgage 5 year fix at 3.2
if he tried to get the same mortgage now it would be around 4.2 .4.5 I think
he plans to pay an extra £100 a month to reduce it in the future

[Flyinggeesei234]

@Woodsparrow

Is it normal to fix for 2 years on a first mortgage? Genuine question I've never known anyone do that

Anyway, how soon can you start looking at fixing further?

@Woodsparrow why not?!

[Nottidaythanks]

@Butterflyfluff

A decent broker will check you’re still comfortable at affording 10% before arranging lending.

a) That isn’t true
b) That isn’t helpful

It may not be helpful but it certainly is true . No one should be buying a house without knowing they can afford a huge hike in interest rates.

[Strangeways19]

@SometimesMaybe

Look at redemption penalties - if might be better to break your current mortgage and try and fix for 3-5 years. Expensive but for some people it might be better over the longer period if you think that mortgages might stay a higher rate for a number of years. And at least you know what you will be paying for longer and have some security in that respect.

If OP's mortgage ends after the 2 year tie in there's no redemption fee at that stage.
I've moved around mortgages loads over the years & have never paid for a redemption fee as I've always waited until the end of the fixed period to buy into another mortgage (for another fixed period)...& So on...

[MysteriesOfTheOrganism]

I remember the early 1980s when our mortgage rate went up to over 16%. It was a truly dreadful time. I really feel for everyone who is getting seriously worried right now.

[Lcb123]

I'd speak to your broker, but one option is to extend the term so it brings the monthly payments down. We're moving and are going to get the mortgage term as long as we can get away with!

[HereforFSadvice]

To everyone on this page, firstly, it’s important to speak to a specialist to get full advice.

If you are tied to a deal you can technically remortgage at any point, irrespective if it’s next year or sooner. Of course, the longer your deal has left on it the more you will have to pay in an exit fee.

Several lenders have today and yesterday pulled a lot of deals for the short term so might be good to leave it a week before contacting anyone as right now there will obviously be fewer lenders to choose from.

It is impossible to predict what will happen with rates between now and next year, however, there are people available to help!

Good luck

[DogInATent]

@fromdownwest

BOE is using a sledgehammer to crack a wallnut.

Housing has not caused this inflation, it is driven by utilities, food and services.

So crippling households, to reduce inflation is insanity. People will have less to spend yes, but they will still have to pay their eye watering prices for gas and electricity.

Until this week I though the BoE were doing the wrong thing raising rates when inflation was being primarily driven through energy price rises and other cost increases associated with the conflict in Ukraine.

But this week it's become clear that is Sterling tanks the impact on the cost of living is worse. And Sterling is tanking because there's zero confidence in the current government and their economic policies.

Have the people suggesting looking for another mortgage deal not seen the news? - you'll be lucky to get any new deal on your mortgage this week, at least until the BoE makes its next announcement. Lenders have been withdrawing mortgage products since dawn.
www.bbc.co.uk/news/business-63041679

[TheBoxOfWhat]

Get in touch with London and Country, they are completely free, whole of the market mortgage brokers and are recommended by Money Saving Expert. Get their advice on your situation. Won't cost you a penny.

I highly recommend them.

www.landc.co.uk/

[Littleelffriend]

@MarinoRoyale i have spoken to my lender, I am on a variable rate . They can’t lengthen the term, won’t go interest only and I can’t switch lender or product. I have cried during calls, but they will do nothing to help

[MarinoRoyale]

@Lcb123

I'd speak to your broker, but one option is to extend the term so it brings the monthly payments down. We're moving and are going to get the mortgage term as long as we can get away with!

Extending the term is a good option for some people when you re-mortgage, you can always reduce the term again in future re-mortgages when hopefully the economy is in a better place.

[MintJulia]

Yanbu to be concerned but, trust me, they will sort it out.

The last thing the mortgage companies want are thousands of reclaimed houses that they can only sell at a loss. It is not in their interests for you and lots like you, to lose your home.
I went through this with my first home, when John Major was chancellor. It was terrifying but I survived. You will too.

[toomychtiss]

The BOE are stuck between a rock & a hard place. They can't not raise interest rates because they also need to protect the pound.

[MarinoRoyale]

@Littleelffriend

@MarinoRoyale i have spoken to my lender, I am on a variable rate . They can’t lengthen the term, won’t go interest only and I can’t switch lender or product. I have cried during calls, but they will do nothing to help

Call the FCA consumer helpline and ask them to talk you through the forbearance rules and what you can expect from lenders. All rules are set out in the FCA handbook under the MCOB section. And they’ll tell you what you can do if they’re not abiding by them xx

[HereforFSadvice]

Genuinely not trying to promote myself - I know the industry well.

[AuntSalli]

From my previous experience of my ex husband ending up on the standard variable rate because on paper we could no longer afford our mortgage my experiences as long as you pay something and you pay regularly and you keep them up-to-date it takes a very long time to get to the stage where the word repossession is even being mentioned. By a long time I mean eight years.
my very firm advice is just do not ever miss a payment and look as if you’re taking the piss.

[HereforFSadvice]

Probably best to leave it for a bit - you’ll have an exit fee to pay and the market is so unpredictable right now things need to settle first.