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

Hi @MooseAndSquirrelLoveFlannel can I ask how you found out these figures? Ours is due around a similar time as yours and when we try to look at what it will be they say it has to be within 3 months of it expiring but we need to know now really?

Thank you, so do I! I think the risk of such a long term is outweighed by the stability of knowing what I'll be paying, its just hard to know what to do for the best at the moment. The only bonus about H fucking off is that at least my other bills have gone down.

It's not exact,but based on the current remortgage rates out there. I'm praying it'll be less.

@HateTheFuckingWorld

yeah, I think all you can ever do is consider your options and make the best decision you can given what you know...then cross your fingers. 🤞🏼🤞🏼But stability counts for an awful lot.

You'll find other bonuses to H fucking off, you really will 🤗

@SkylightSkylight it’s an svr but the rate is only 3.46% and we can fix it at any time so guess we can fix it at 3.46 if we like. We can afford this for the next 2 years ! (My husband would be 77 in 35 years but they allowed it based on the fact he has a really good pension so the 35 years was approved 🙈🙈

Lord knows, it’s terrifying. Our fix is up in May, but we can go for a new one from Jan.

We can probably afford it to go up a bit, but not much. We’ve all got used to very cheap borrowing - and that’s over now.

I’ve just seen people calling for independence for the BoE to end.

Are you actually insane?

Are you actually insane?

it's actually scary

This is terrible advice - the SVR is ALWAYS considerably more expensive than fixing. If you’re concerned about affordability then please fix!

I don't understand why people buying at the top of the market are being bashed. Surely you don't know it's the top until it drops? I stretched to get my house, but paying rent on an equal property would be twice what I pay in mortgage, so worth it. Really not looking forward to summer, when my mortgage and fixed utility amount expires together. Going to be a painful experience.

I did calculate that it was affordable I the rates trippled, but that was before we had kids and everything else went up too. I assume that the length will need extending to offset some of the rise.

no, you are wrong.
if BOE did not raise interest rates. This inflation will be worse.
some pp have explained it in another post.

@Heyahun I'd fix on that rate. I can't see them dropping to that anytime soon!

mines 2.48, I was dithering over how long to fix it for and missed a 1.69 I could have fixed at 🙇🏻‍♀️🙇🏻‍♀️

my situation is a bit complicated, but I ended up taking the 2.48 for 5 years.

Economy needs to lose way more productive jobs and immiserate people before inflation gets under control. Long way to go yet.

An interesting article from the Citizens Advice - but I am a bit sceptical about the data

wearecitizensadvice.org.uk/theres-a-crisis-brewing-in-the-mortgage-market-but-we-have-a-chance-to-prevent-it-2eda480f180d

I can't see the actual data - but this is the results from a survey of 1103 home owners with a mortgage

Looking at the population as a whole, we have found that over 1 in 4 mortgage holders couldn’t afford to see mortgage payments rise by £100 a month and almost half (45%) would be unable to afford an increase of £250 a month

This

no one expected that their gas and electricity would double /triple plus sc raise so much

then add on food increase

and high prices of petrol or diesel

What a ridiculously narrow perspective. Let nobody advance in life, just stay standing still.

No, if you have the potential, then use it to get better paid work. Not least of all because if people work to their full potential, it will get this country back on its feet again.

I beg to differ, absolutely wrong.

This inflation us due to supply issues, not because we’re all out spending with lots of money sloshing in our pockets

2-3 cheaply holidays a year with EasyJet, Ryanair and the like. Buying crap on the never-never, spending £200 on each child every Christmas. Costa coffee every day. Destination weddings, destination hen weeks that people can't afford so burden their guests with the bill to finance it

Peoples spending habits over the past decade to 15 years has been out of control, and MN has been full of threads over the years normalising that kind of expenditure as lifestyle choices.

People thought low interest rates would go on and on and didn't think there would be a rainy day. That rainy day has arrived, and people are now having to seriously pull their belts in, which they have never been used to.

Won’t there also be lots of property on the market as people need to live in their means and downsize? We had wanted to look at a detached property as our next step but we won’t now. We have over paid and decreased term of mortgage over last 10 years and are really grateful we didn’t move. If we had we would be having to sell and move backwards. The people most affected will be those at the top because the number of people looking at top end properties who can afford on increased rates will have decreased significantly.

It’s those who rent whose rates will increase and are unlikely to be able to downsize I fear for most. Very few people rent above what they need in the hope they can save. The increased mortgages mean rents increase and those struggling are left without options

I didn't say standard variable rate. I would get a variable rate deal, for the shortest term available to me.

Inflation affects everyone, and it needs to come down. The best way to do that is with higher interest rates. We certainly don't need more QE - lobbing around billions for Covid has helped fuel this.

The BofE need to keep control of interest rates - when politicians did it, interest rates rocketed around. That's why Gordon Brown gave it over to the BofE.

This crisis is affecting everyone, not just mortgage payers. Renters are struggling too.Inflation needs to come down, so interest rates need to rise a bit.

Odd way of thinking about it. Yes from an outgoing perspective - the same.

But you were substantially shortening the length of time you would have had a mortgage and thereby substantially reducing the amount of interest you paid on that mortgage… by overlying £500 a month!

So you mean a tracker mortgage?

it’s either an SVR or a Tracker mortgage

theres no “variable rate mortgage” that isn’t an SVR

Look back to 1990. It was 18%. Killed my marriage as we were working the whole time . Throw 2 kids in the mix and you have the perfect storm for a break up.

Agreed.
QE during covid is an issue, but the trend started in 2008 by bailing the banks out.

For 15 years we've all been 'artificially' wealthier than we really are, propped up by low interest rates.

Those chickens need to come home to roost eventually, and they've been out in the yard a long time.

Lots of people have been enjoying new cars on lease, an annual holiday in the med and assuming their property just gets more and more valuable, but without QE they would be driving 15 year old bangers and a weekend in Skeggy.

Many need to prepare for a bumpy readjustment back to reality.

I don’t mean to be rude on here as I really hate to see people suffering but honestly, people have been cock a hoop in the last decade as their houses earnt more than they did and were paying tiny amounts each month to service their mortgages.

interest rates need to get back to normal- the U.K. has been on emergency rates since 2008 and the banking crash. Cheap money caused an unsustainable housing boom.

This is the payback- you can’t print money into infinity and not expect inflation. Covid didn’t help. Sunak stoked the housing boom during covid too.