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

This happened to my friend and they're just not able to remortgage so have to go on to the variable rate the current mortgage lender offers after the fixed period has ended.

Badnewsoracle - when I remortgaged with my current lender (last year), I did it in 10 mins online - can your friend not do that?

They didn’t even ask what my salary was. Just my house value and my outstanding mortgage figure to get the LTV. I probably could have got a slightly better dead with another lender but I earn a lot less than I used to (mortgage on my own) so I didn’t want to be asked my salary.

a friend did it and though she bought at £300k and her flat probably wouldn’t sell at £275k, she put in £350k as the flat value (not beyond mad as she could have put in a new kitchen and upgraded it more than she has) and got a better LTV without any extra questions.

You remortgaged

and they didn’t ask what your salary was?

We did that before as well.

Now we're with Halifax and their online mortgage site hasnt been working for the last nigh on year. You have to phone and wait on hold for hours its so irritating.

Yes - I remortgaged with my existing lender precisely so I wouldn’t have to go through the whole rigmarole of the application. I just went to their “existing customers” page, logged in, then answered the house value question and confirmed my outstanding mortgage and then they asked if I wanted to borrow more which I didn’t, then it offered me about 6 products, ranging from 2 to 5 years. No questions about salary.

I didn’t know I could do this - a friend who is a SAHM who owns a flat separate to her DH told me they wouldn’t ask my salary. She doesn’t have a salary obviously so just remortgaged this way with her current lender. She had called L&C to ask if her DH transferring her ££ every month would count and they said no, but she could try this method (they didn’t make money from this obviously).

I had been on the SVR for three months not realising this was an option.

I’m pretty sure this is normal. Unless you are changing banks or borrowing more it isn’t technically ‘remortgaging’ it’s switching product.
It took me less than 5 minutes to change my mortgage online when the term was up. Didn’t have to answer any affordability questions, you don’t provide any payslips or anything you just pick the new interest rate and term you want.

If you’re staying with the same mortgage provider and not taking out any more money you don’t have to go through affordability checks again.

Is the Conservative party who made this mess.Don’t forget Johnson & co who gave himself and his colleagues a lots of pocket money so now is the time to pay it back by people.And don’t forget the Conservative party during election that they turned MR Corbyn into monster and all of you were laughing together with Conservatives .Rich party for rich there is no end to this Etonian mess

To the people on this thread indignant that some people took out mortgages when rates were low, here’s a personal story:

my husband and I both have salaries around 40/50k each. No other debt. When we applied for a mortgage around £250K we were contacted relentlessly by our bank asking us why we weren’t taking out a bigger mortgage. We got between us 5 separate calls about this. Eventually they backed off.

How many people were swayed by this type of behaviour?

The issue I foresee is how will they/we/anyone afford anything? Can't afford your mortgage, what will you do? Sell and rent? Rents will be seeing just as high, if not higher increases. So if you can't pay your mortgage, how will you afford rent?

Rents increase above what you can afford, where do you go from there?

No. They've tried. I find it hard to believe that you weren't asked your salary - I've had dozens of mortgages and my salary has been asked every single time.

It’s a global issue, would be no better whoever was in power. Look at any major economy, they are all wrecked. 15% in inflation in the Netherlands, 10% nearly everywhere else.
Rishi said brave words about not leaving this mess/debt for our kids to pay off. Let’s see what happens, but major borrowing against future tax receipts is a cooked goose.

Funny how even the current Tories accept Truss made the problem worse here in the UK. The cost of government borrowing rose out of line with other similar countries when the mini budget bollocks was announced.

So it definitely would have been different if the Tories had not been in power in September.

Exactly this - I did it on my phone, in the car, in the Tesco car park. I had had no idea it was possible. I thought you had to go the whole hog all over again and I would have been up a creek but as you say, I guess it’s not “remortgaging” just a new product with the lender that know you’ve never defaulted and already have a charge on the house.

I’m pretty sure this is normal. Unless you are changing banks or borrowing more it isn’t technically ‘remortgaging’ it’s switching product.

Isn't the issue though that your bank isn't always the most competitive so it may be better to switch banks?

This is slightly worrying. We are in a rented house (private) the landlord is looking to remortgage. Now the house we are in has issues. Wooden windows, wooden doors. The kitchen is from the 60's the bathroom, pretty much same era. It's damp, in our bedroom and of course the bathroom, only room with double glazing. I also think the roof needs checking. If he remortgages to do the house up, I don't mind. As it needs it an hopefully will save us on bills. But I hope he doesn't expect a 500 a month on top of we are paying. As it wouldn't be worth it, even done up.
For people on the edge, try saving as much as you can, as social housing doesn't help. Our council in Sheffield, has 18 year waiting list for social housing. This was 5 or so years ago. So is probably higher now. Deposits and month in advance for renting is over £2000. We are stuck as, we don't have any savings and so are hoping they don't kick us out.

Yes - in a perfect situation you would have had pay rises and be in a good position to take the pick of the bunch in terms of across the board mortgage products. But - if, like me, you earn about 30% of what you did before, and may fail affordability checks run by a new lender, you can get a fix with your current lender without having to disclose your new circs. I fixed at 1.3% for 5 years. someone richer than me could have got 1.1 but I’m ok with that!

We weren’t asked salary when we remortgaged either. As I said above, if you’re staying with the same lender and not taking on extra borrowing no further checks are done. This is standard.

When I bought my house 15 years ago the interest rate was 7.5%. I just found the paperwork. There was no stress testing back then. I was fixed for a while then stuck on a variable as my house went into negative equity a month after buying it. House prices dived and I had taken the very last 100% mortgage (they were withdrawn the following day or week if I recall). There were two of us then paying the mortgage - based on my one full time income but that’s a whole different story. Now there’s just me, now working part time, getting tax credits with children added in. I eventually was able to remortgage to 1.99% a few years ago which lightened the load for me. That fixed rate is due to expire in July. Luckily it’s not a huge mortgage now and I have paid off some balance - prices still haven’t got up to what I paid for it!! But my energy has gone from £90 a month to £220 a month (£177 with the rebate monthly for the 6 months) and then it’s due to go up again (projection was around £400) so we are really cutting back on consumption. My income hasn’t gone up since I had kids and went part time. Any slight increase comes off the tax credit payments so catch 22. When youngest starts secondary I might have to go full time. Going full time comes with additional fuel and childcare costs and a decrease/total loss in tax credits and not actually likely to give me much more income.

Picking up what others have said, my remortgages have been with the same lender so basically just a product switch. I can’t remember if I was asked my salary but I do know that any other lender would have rejected me as a new borrower. Hoping that come next July I can switch product again without too much issue - other than the inevitable increase in price. My current salary would not get me a new mortgage for half of what I owe. I was massively surprised when I was able to remortgage with my current provider.

I had 3 btl up for remortgage. I managed to get a five year fix for 4.10 percent for 5 year fixes about 2 weeks before mini statement. I am worried for my sister who's mortgage is up in April. I rang her to tell her to get a new quote straight away as it would last for 6 months and she could then follow rates and decide whether to take the quote or not and I know she does not watch news or follow politics or finance markets. She left it too late as preoccupied with her dd dancing show and when she tried almost 3 weeks later the rates had jumped to 6.8 percent.

Wrong.....the Tories believe in hands off government, they will let whatever happens, happen. Remember what Johnson said about business? Fuck Business is what he said....and if you look at this country, you know he meant it.

We took out a Nationwide mortgage with a fixed rate meaning we have been paying £2700/month. It finishes next month. If we had just gone onto another Nationwide mortgage now it would now cost £3643 - so nearly £1K/month more!

We were lucky in that our financial advisor advised us to arrange one with a different building society 4 months in advance, which should kick in after the last mortgage. Even then, it's going up by £300 a month.

We were stress tested for our mortgage like everyone else, but we're basically one redundancy away from disaster.

I saw on news couple of weeks ago the number of people affected now are low but if BofE keep putting rates up as they will have to if they are to curb inflation then next spring more people get drawn in and by Xmas 2023 more still. Basically as people's fixed end unless government and BofE can drive inflation down and get on top of it then each year more people will be affected.

You think Labour would have had a full costed budget? Liz was a disaster but the train was already coming down the tracks.
The markets won’t tolerate any more borrowing on the never never.
If Rishi doesn’t come up with solid policies to boost gdp, and not by just increasing immigration, he’ll go the same way as Liz.
It wouldn’t surprise me if he increased NI again, which would be great as everyone wants more spent on the NHS.