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Original poster

Mortgage crisis

188 replies

Supermummy88 · 04/10/2022 22:50

Good evening ladies!

I would just like some advice. Me and my husband are in a major panic and literally don’t know what to do and what our options are. We are currently paying £1200 a month for our mortgage and it’s manageable…we have been paying that amount for about 5 years now. Our 2 years fixed is coming to an end and we have now been quoted £2020 a month. I just don’t understand how on Earth the government think anyone can just magically pull out an extra £800 a month! Interest rates are now above 5%! We are paying an extra £120 a month now for our electricity/gas. So that’s an extra £920 a month for us. We can’t do extra jobs as we work full time already and have 2 young children. One is in nursery so we are paying fees aswel. There are no cuts that we can possibly make to be able to pay that amount every month.

Any advice please?

OP posts:
Iliveonahill · 04/10/2022 22:53

Extend the term of your mortgage. Not ideal but you can always change it once rates start to come down, very few people actually have a mortgage for 25 years. I had my first mortgage in 1989 and in 2022 still have one. But it’s cheaper than rent so why worry about the length.

yoshiblue · 04/10/2022 22:54

I personally would go to a broker and discuss your options. There will be different products/rates available and extending the term could be another option. Even going interest only for a while.

Mimiandme · 04/10/2022 22:57

Hi @Supermummy88 Have you spoken with a mortgage broker at all? If your deal is coming to an end I would get in contact tomorrow with a broker and they can give you the best advice and compare deals across the market. I’m no mortgage expert and it might be the wrong advice long term but could you extend your mortgage term and lessen the payments each month? x

Temporaryname158 · 04/10/2022 23:03

As others have stated you should speak to a broker, London and Country are widely respected.

but what I think you need to think about more widely and consider is, have you over borrowed. I know that’s an uncomfortable question but rates have been at historical lows and it was a certainty that they would rise eventually. Can you weather that?

do you need to

*downsize
*extend the term substantially to reduce payments
*do you have any savings to pay to reduce the amount owed?

also I am unsure if you are aware as you don’t say in your post but did you know you can fix again up to 6 months prior to your fixed deal ending? It’s important especially currently to be aware of this.

DoodlePug · 04/10/2022 23:10

Plenty of good advice above.

Interest rates have been at historic lows for years, they were bound to go up eventually but you won't be alone in not having planned for it. Extending your term or going interest only for a while will allow you to pay whilst figuring out what to do. Longer term you need to earn more (raises, promotion, lodger), reduce costs or downsize I'm afraid.

Custardpudding · 04/10/2022 23:16

Not all lenders have pulled rates but there are fewer schemes about while they watch the economy and see what will happens. If you struggle please call your lender and chat. Their goal is to try and help and make your payments manageable. Do the money saving expert website still list mortgage deals? They are usually a good place for advice.

Bestcatmum · 04/10/2022 23:39

When I was a single mum and paying a moderate mortgage that I could only just afford interest rates suddenly went up to 15%. I almost lost my house, I was working full time but had to take a 2nd job on nights swapping childcare with another single mum who worked, i did this for 6 months. Worked days during the week and then nights every single weekend. It almost killed me.

mortgagescrewed · 05/10/2022 00:43

I posted about this earlier- we are in a very similar position. It's SO crap and worrying. Where do they think this money is going to magically sprout from?
It's so hard with small DC when you can't work more hours and you're paying out for extortionate childcare costs on top.

Popaholic · 05/10/2022 02:51

Speak to a broker urgently.
One option is to sell up very quickly and move into rented, downsizing to the smallest property you can squeeze into/cheaper area. If property prices fall, you may be able to get back on the property ladder in a few years without losing much ground.

Hothammock · 05/10/2022 03:05

The simplest option is to extend the term to lessen monthly payments when you look for a new deal.

MintJulia · 05/10/2022 03:07

Before you sell up etc, look at all expenditure. Consider...

Downsizing cars, selling one car, childminder rather than nursery, cutting gym, pay tv etc, downgrading phones & broadband. Renegotiate house/car insurance. Cut out alcohol, takeaways, holidays.

How long until youngest child goes to school?

mellongoose · 05/10/2022 03:55

Not sure why the Government would have a say in the amount you pay on your mortgage. It's not up to them!

Vancleefandarpels · 05/10/2022 04:13

As a pp said, it’s market conditions created by world events not the government that are at the root of your current issues. For those of us who remember 15% mortgage interest it’s not a massive shock but the country has been hooked on cheap borrowing for many years. Instead of focusing on who is at fault, you need to spend a good couple of hours with your DH really forensically examining your household finances to see where your money goes. And get hold of a mortgage broker asap. There will be savings to be made in insurances, energy use, credit cards, holidays, utilities, food etc. child care is your biggest outlay I’d wager, so do the sums of reducing your hours but getting tax credits maybe as a way of reducing child care costs in the short term. If you can’t do this, one or both of you need to find an additional source of income you can do in the evenings/weekends, you only need one of you to watch the kids, not both. No one is pretending it’ll be anything other than shit for a bit, but your income won’t stay at the current level forever and your child care costs will go down as the kids get older. Unfortunately you are in the worst of all worlds with childcare costs at an all time high which is added pressure. Download all of the voucher/saving/too good to go food apps etc. get selling on eBay anything you don’t need. There are useful threads on money saving on MN so take note of all of the tips. Plus look at MSE website to make sure you are claiming everything you can.

frozendaisy · 05/10/2022 04:16

Listening to a financial expert on BBC radio last week.

Advice about this exact issue.
Talk to a broker and then your lender. Everyone wants to keep you in your house with a mortgage you can afford.

Pay your mortgage first. Then look at your other costs.

happyfishcoco · 05/10/2022 04:29

same here , really don't know what to do and come so suddenly

Dannexe · 05/10/2022 06:22

As others have said, talk to a broker asap and sit down and go through all of your expenditure. Cut out everything that isn’t absolutely essential.

little good comes from saying you ought to have known rates were artificially low and planned for it. Now you just need to focus on getting yourselves in a position where you can keep paying the mortgage and you need to think about the fact that rates may well continue to rise.

waffless · 05/10/2022 06:25

The government is not responsible.

Meltingsocks · 05/10/2022 06:34

@waffles

They are partially responsible

wigywhoo · 05/10/2022 06:48

mellongoose · 05/10/2022 03:55

Not sure why the Government would have a say in the amount you pay on your mortgage. It's not up to them!

This.

OP, also Rates have been ridiculously low for ages, this has been shit for savers. Rates are rising in the US and the Eurozone - this day has to come. I know the additional cost will of living issues compound things right now, but people need to take responsibility for the amounts they have borrowed. Did you never think "what if rates return to "normal" levels?"

Sestriere · 05/10/2022 06:53

Really good advice on here, and I’m also one of those that paid 15% interest, I still remember the fear at the time. We literally didn’t have a penny left. I got a bus pass. We didn’t have any niceties such as Sky TV or gym memberships or meals out. We food planned and did nothing and went nowhere for months. All mortgage rates were variable so each month it just went up and up. it NEVER came back down to the rate we started at. We probably paid around 6-7% for most of our entire mortgage term.

I remember afterwards when we moved house saying I will never get a mortgage for an amount where I cannot pay it if it goes up to 15%, I cannot have another sleepless night.

Sadly, due to such tiny rates for so many years there is a whole generation of people who don’t know any different and assume these rates are for life.

I feel for you OP.

gogohmm · 05/10/2022 07:01

My first mortgage was 5.8%. When calculating how much i could afford to pay on a house I always worked out repayments if interest rates increased to 6% and beyond.

Extending the term and paying the interest only until your youngest starts school is one option. I would also if you can hang in there, lots of movement in the currency markets this week, inflation prediction has been reduced. Takes time tj work through to mortgage products

Nw22 · 05/10/2022 07:05

I am so sick of hearing about people who paid 15%. It has been shown that 15% then is the same as 6%, given the higher house prices and stagnant wages.

incywincyspiders · 05/10/2022 07:10

Nw22 · 05/10/2022 07:05

I am so sick of hearing about people who paid 15%. It has been shown that 15% then is the same as 6%, given the higher house prices and stagnant wages.

This.

Also sick of people who think that just because they had to go through something, so should other people.

britsabroad · 05/10/2022 07:12

What @Nw22 said! Fed up of hearing about people who paid 15%.
Houses were much cheaper, cheaper energy and fuel, no university fees. Totally different ball game. And all those baby boomers that bought cheap houses and sold later made a fortune.

FreddyHG · 05/10/2022 07:18

To be fair people should factor in what they borrow if it is actually affordable to them. Interest rates are still historically low and will rise further. If this is unaffordable now you definitely over borrowed. People blame high house prices which are caused by loose credit. We could have avoided this if banks lent to only 3x income over shorter mortgage terms and excluded the second (usually women's) income.