How can people afford to remortgage

[Tead]

I have a £200k mortgage. When aI remortgage I will end up paying around £500 a month more. I can just about manage I think although there will be nothing left at the end of the month and we might need to go into our savings.
how would people who are just about coping deal with an increase in monthly payments

ITT, people buying properties they could never afford.

People will lose their homes. Happened in the 1990s and will happen again.
I think it wasn't such an issue in 2008 recession as interests rates went rock bottom then.
Only there's very little social housing now.
Anyone who thinks the govt will hand out help is deluded.
They need to regulate so banks are required to offer extended terms, interest only to people who can't pay at remortgage. Not refuse to remortgage and repossess. But the tories won't do this.

Labour will at least get onto of the energy crisis so we aren't at the mercy of Russia again like this.

ITT, people buying properties they could never afford.

how did they buy them then?

Of course it will

Those who are struggling are in the minority. Things would have to get a lot worse to tip the scales.

Many on MN forget that, as there is a large majority on here who aren’t financially sound.

Yes lots of people aren’t struggling and won’t be even if things get worse. Out of all my friends and family, no one is struggling to afford things and there has been no talk of cutting back. For many it just means less in savings each month.

Because if I don't remortgage I'll be paying 4% above base rate and I'm worried about what base rate will go up to.

Yes lots of people aren’t struggling and won’t be even if things get worse. Out of all my friends and family, no one is struggling to afford things and there has been no talk of cutting back. For many it just means less in savings each month.

I don't know many struggling but know many moaning. Who likes paying more interest?

Quantitive easing is the last thing we need. It is used to encourage spending, which will push inflation higher. Also, your comment about the BoE being under Gov control is crazy in my opinion. Historically governments have used the interest rate to impact the economy short term in a way that benefits them at election time and then we have to deal with the consequences later

Our mortgage is up in June, and we're facing £800+ a month more each month, on top of the daily costs.

We earn well, but this will push us to the brink.

How can people afford to remortgage

Well it’s usually cheaper to remortgage than go on the standard rate so who can afford not to remortgage?

When people have to pay an extra mortgage £700/800 on their mortgage, 3 x energy prices, growing food prices, how are more people not struggling? I understand it may not be immediate if they have locked in to a good rate in their mortgage, but surely over the next couple of years it will be more and more of a problem. People will lose their houses. I really can’t see how it will stay in the minority. Wages have stayed the same and costs have spiralled.

Because the number of people who'll have to pay that much extra on their mortgages is pretty small at this point. There were slow incremental increases from about March onwards then we saw much faster rises in September and October. So in order to be affected, you'd need to either have a fix that's come up in that period that you hadn't sorted in advance or be on a variable rate, and you'd also need a big enough mortgage for an increase in interest rates to cost you an extra £700 per month. My mortgage isn't even £700 per month in total, and that's common in many parts of the country.

The average mortgage balance in the UK is something like 140k, so an increase from let's say 1.5% to 6% is about £350 a month over 20 years. Of course, for many people that smaller increase will be significant in itself.

Exactly this. We could afford our mortgage when stress tested, wouldn’t have taken it otherwise. The stress test obviously doesn’t include everything else rising in price at exactly the same time.

There are a lot of people who have little discretionary income and little savings.

At the same time, there are also people who have both a lot of discretionary income and a lot of savings. Once your mortgage is paid off, children have left home and you are doing well in a career, there is potential to save money.

corporate.asda.com/media-library/document/asda-income-tracker-september-2022/_proxyDocument?id=00000183-693b-dc2f-adef-fdbfb8160000

A fifth of households have negative discretionary income

The Income Tracker measures the amount left over to spend on discretionary purchases such as leisure and recreation goods and service

Absolutely right.

They bought them at the top of the market using cheap money. Which is a risky thing to do.

The problem for a lot of people was that they had to over stretch themselves to buy any property, because housing is so expensive in comparison to wages. The choice was to either overstretch themselves to buy, or to rent houses that cost more than a mortgage would, with all the associated insecurity of renting.

They bought them at the top of the market using cheap money. Which is a risky thing to do.

For many less risky & cheaper then renting though...

Good for your Fb friend getting onto the property ladder. Surely you must know that it is quite possible for people to improve their circumstances.

They have a couple of years to try and increase their income by taking up extra training, or finding a job with more prospects of advancement. Just because people are in one set of circumstances today doesn't make it a fixed situation for evermore where things can't improve tomorrow.

People have to stretch themselves to buy a house , houses prices have gone up hugely compared to wages. Renting would cost us far more than our mortgage. Do people really not see this?

Yes everyone should just get better paid jobs, don’t know who will then look after your children, care for the elderly, look after you when you are ill, work in shops and restaurants, but what a great solution, can’t think why we haven’t all done it.

When we bought we did think about interest rates of 20% but not on top of rapidly rising fuel and food. Everything can go the shit before I let us get repossessed. A ccj would ruin most people for a decade or more. You never get back into the housing market for over five years

When we bought we did think about interest rates of 20%

20%?!!!!!

@HateTheFuckingWorld

I hope that works out ok for you in the long run, but knowing you have 10 years at an affordable cost per month certainly counts for a lot. Best wishes!

@Heyahun

Have you fixed your rate or are you on SVR?

... I don't think my bank will agree that I can pay my mortgage until I'm 88😂😂