Would you take this mortgage rate?

[Hangrysaurus]

3.7% 80% LTV £1250 per month?

or 3.7% 75% LTV at £1100 per month

or would you keep as it 2.2% £750 per month with a deal that expires next December?

genuinely having panic attacks over this

Is there a fee to get you out of your current fixed deal?

What are your redemption penalties and how long would you be fixing for? Also what is your remaining term on your mortgage?

Yeah there is works out at about £4500 and can’t be added to mortgage balance.

we have htb equity loan and trying to work out if we should rank our savings £40k into it, that’s the difference with the 75% and 80% ltv. The 80% is adding the full htb balance onto mortgage.

take home salary after tax is £4900 nursery fees £880

Fix would be 5 years as we’ve got over a year left on mortgage. Term is 30 years, extending makes no difference really £50

£4.5k and an extra £500 a month for 12-14 months is £8.5-£9.5k...to be honest I would save that cash and wait to see what rates are next December.
Of course it's a risk, and I'm sure rates will go up, but I think they will come down too. It all depends on how much risk you are willing to take.

*Sorry meant £10.5 -11.5k

I would wait til current deal runs out

I’d hold tight until December next year & save as much as you can to overpay the mortgage.

we won’t be in a position to make over payments until we clear the htb sadly because the interest on that will be higher than mortgage rates

If we don’t add the htb and put a pin in that it will go from 755 to £985 and then look at additional borrowing in December next year for the htb

I'm confused: how much do you owe for the help to buy equity loan? How much do you have in savings, 40k?

Use the 40k to pay off the HTC equity loan before the high interest rates?

sorry my head is all over the place, we owe around £75k in the htb is based on the value of the house and it’s sky rocketed since we got it.

so using the 40k to pay some of it off is the 75% ltv and the monthly repayment of £1100 v adding it all to the mortgage as additional borrowing and that’s 1250 a month- doesn’t make a tremendous amount of difference sadly

Stick.

review in June. If house values drop so will the HTB loan.

You could apply for a remortgage six months before yours ends, and if something better comes alon after you’ve received that offer then sack it off and take the new deal.

that 4.5 k is better in your pocket at the mo.

But our equity in the house will also go down if house prices fall like they inevitably will

its such a horrible situation i could cry

Stay where you are.

Can you afford the difference between £1250 and £750 now? If so use that to overpay and reduce your LTV, or add it to savings to clear the help2buy when it becomes due.

We also have a H2B equity loan, will be around £50k total based on house value, we intend to clear it in steps - so half when the 5 year fix is up and half 5 years later so only paying interest on half of the balance.

I would also stick. It seems scary right now but there’s still over a year until you have to fix again and things will hopefully have settled by then.

Everything atm is totally unprecedented so everything is volatile- this has to be sorted, it just depends how and by whom..

Try and just save as much as you can.

I'm forsaking my final cheap year to fix for five at something I know I can afford. In total it's costing about £4k in higher payments next year and the exit cost, but I think it's neccesary.

It would leave us about £1k left at the end of the month but then with kids clothes etc we’ll be squeezed in a way we’ve never been before

I mean, having £1k a month leftover for us would be a luxury even with a 2.04% rate as we have at the minute. Childcare fees are crippling enough - between us (for clothes etc as you suggest) we have around £400 a month, but we find this more than comfortable. I guess it’s just what you’re used to but if you think it’ll be right I’d stick with what you have but save the difference, live like you’re on the new rate - without actually being on it - at least then you have the bugger there If you desperately need it, if you don’t you can use it to reduce the capital come next December.

Buffer 🤦🏽‍♀️

I’d wait. I know it’s not popular but we are due for renewal in May and even we have just decided to hold our nerve on our current very low rate until then. Rates have to come down again at some point. Disclaimer- we do have some savings to overpay at our low rate before May to help offset any completely hideous new rate. Obviously if it’s over 7-8% by then I’ll be very worried but will cross that bridge then. The rates are already high so we just decided to take the risk and see where we are in May rather than fixing 4-5% for 3-5 years or more.

Rates have to come down again at some point

They don't and most probably won't.

I don’t think they’ll come back down to the almost artificial lows we’ve seen the past few years but I’m not sure how the housing market and how people with mortgages can withstand rates as high as this esp because of what the banks used to deem as affordable and the income multiples they used to lend, and then the htb and the 95% mortgages . Surely can’t be great for the country if everyone defaults on their mortgage

I’m in a similar position with fox ending next November. Current instinct is to stick it out and see what the situation is nearer the time. There’s a lot of panic at the moment and I don’t want to jump and regret it

I was in the same position as you a few weeks ago OP, pretty sure I have grey hairs now! and my parents trotting out the old 15% interest rate line wasn't helpful either.
We are due to end our fixed rate in May so we've started the process to end the fixed rate early, we have another 4 months paying at our 2018 rate and then our payments go up by almost £200.
We're paying 2% of the balance to end the fixed rate early but rates have gone up more than 1% since we fixed so we definitely did the right thing.
We also have the option to switch or ditch this new offer within the 6 month arrangement period if anything good happens but that's looking unlikely at the moment.