Mortgage crisis

[Supermummy88]

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?

@user84 I'm "midlands upwards" and there is no chance £300k would buy you a 3 bed never mind a 4 bed. You'd have to live in a pretty run down part of my area to even get a 2 bed.

It absolutely is the government's fault that they spooked the markets and interest rates are going to shoot up. A slow rose was happening but was more manageable for people - then KK threw a hand grenade into the economy!

I'll give them they covid and Ukraine and prices of fuel going up aren't their fault BUT if they had not stuffed the country since 2010 with austerity and had actually windfall taxed the companies making massive unexpected profits to fund the price fix rather than unfunded borrowing - then the country would be in a better position to start with.

This is exactly why house prices must fall. They have only been affordable due to cheap money and quantitative easing (the Bank of England, independent of any government, basically flooding the money markets with printed money).

This change has to happen, over-inflated asset bubbles will burst and in the long time it is what is needed to redress the balance and make things fairer for generation rent.

But in the short to medium term it won’t be pretty and I have the greatest sympathy for those who have only ever known the post-2007 artificially low interest rates and thought they would last forever.

OP don't rely on the govt to do anything. Plenty of people lost their homes when this happened before.

Previous advice on extending term, going interest only, mortgage broker is something to consider ASAP.

Well that’s surprising and clearly area dependent. I live in Nottingham and you can easily buy a four bed here for £300k plus deposit. DD is in Daventry and it’s possible there too.

Oh I missed the disaster thst is Brexit which has contributed to price rises and the markets thinking UK is a basket case financially!

Brexit was criminal, I'm still waiting for £350 million for the NHS.

This!!!!

I wouldn't consider 500k a small sum and our house is fairly typical for the South East. What us smug ones are trying to get across, is that interest rates have been higher, that we too have struggled to pay mortgages at 5 or 6%, and it is possible (as long as you have not bought a house that you were never actually able to afford). Having a mortgage can be a struggle but it is worth it in the long run. It is a massive amount of debt but people seem to have forgotten this due to the very low interest rates. Owing 500k to a bank is not meant to be a breeze, it's bloody difficult paying it off but plenty of us smug ones managed it at higher interest rates so try not to panic.

"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"

I'm so sorry that you are sick of hearing about it. You have no idea. You had to live through it. It was an absolute nightmare. Try living on £3000 a year with a £9000 mortgage with no family tax credits, maternity leave or pay and negative equity. Wages were stagnant too.

You have no idea. You had to live through it. It was an absolute nightmare. Try living on £3000 a year with a £9000 mortgage with no family tax credits, maternity leave or pay and negative equity. Wages were stagnant too

This shitty attitude of 'you youngsters don't know you're born. I'm my day everything was harder. We suffered so you should too' is pathetic.

You know what? You could say that about anything! And it's also shite btw. Houses cost more relative to earnings than they ever did. Sure people get maternity leave now but since the 2nd wage wasn't factored in its irrelevant to this conversation!

I don’t see the relevance of recounting borrowers’ experiences from the early 1990s, when interest rates hit 15% +. I don’t doubt that it was difficult - I’m 50, so I remember it happening and being reported - but how does that help people struggling now with higher interest rates? It doesn’t. It feels a bit like hijacking the thread to say, yeah, you think you have it tough? Here’s how WE suffered!

Yes - parts of Cheshire and North Yorkshire are comparable to expensive South East prices.

Moving north of the Watford Gap isn't the financial answer to everything!

Do you genuinely think that anyone moving north for more affordable housing would think, yes, I’ll buy in Harrogate or Ilkley or Alderley Edge, that will be a bargain?

Of course not. We all know that housing is on average cheaper in the north of England than in the south of England.

Of course I don't - thats precisely the point, but @User84 said "Anywhere from the midlands upwards for a start..."

So we agree that "anywhere" is clearly not correct.

Are you really trying to derail the OP’s thread with a semantics argument? Anyone reading the PP’s post would have understood what she meant.

In other news, I hear that Bamburgh Castle has just gone on the market for £299,950.

I do feel for you OP!

Some good advice in the first dozen or so posts...I'm making notes

It all feels a bit shit right now

£3000 income compared to a £9k mortgage. That’s 3* your income. How about looking at a £300k house on a £50k salary now. House prices have rocketed over the years. Salaries have not.

Why don't those who lived through shit times before have some compassion for how terrifying and desperate things must feel right now for so many, instead of laying the blame at their feet for not having a crystal ball.

@DreadingWinter I hope you are feeling happy and smug right now. Your posts are coming across and condescending and heartless. And also miss the point massively.

@LittlePickleHead I hope you are feeling a sense of satisfaction at your attitude towards an elderly person who is currently living hand to mouth.

It was no joke living through the seventies and you obviously have no compassion at the struggles of those trying to get on the property ladder in earlier times. I have children who are now going through the stress of the current situation.

My generation don't necessarily have an easier time. Both my now DH and I had no opportunity to build up a pension pot. We have to live on state pensions and never know, however much we cut back, if we can get through the month.

How does this make me smug?

I'll await your apology for being so thoughtless, but doubt you have the insight to realise how hurtful you have been.

Both my now DH and I had no opportunity to build up a pension pot. We have to live on state pensions and never know, however much we cut back, if we can get through the month.

Who was responsible for that....

^ finally someone speak out

and the interest rate is now 4 times compare to Jan this year, which is insane

You do realise your argument is ridiculous and it's possible to have compassion for both these scenarios? Me worrying about how people are going to cope now has no bearing on whether I understand that there have been hard times before. As I'm sure you did to the war generation before you. But the fact people literally lost their houses to bombs before you didn't negate your own struggles did it?

I remember the 90s and the stress my parents went through, working multiple jobs to try and keep a roof over our heads. There is no way they are saying to us now 'well we went through it so suck it up sunshine'

Actually as you say, the current crisis is still affecting them and they are far from loaded. But they are hugely worried about all their children and what we face due to rising costs. I hope you show your younger family members some understanding and compassion in this situation.

I bought my house last year and remember the bank stress tested me for up to 5% internet rates (my fixed rate is a lot less than that!) I remember asking my broker what would happen if the rates went beyond 5% and she actually laughed out loud and said ‘don’t worry that’s not going to happen’.

A lot of people just didn’t see this coming, certainly not what we are potentially looking at now in terms of interest rates and especially after the energy price rises, the cost of food and fuel etc. People are just on the bones of their arses right now and don’t know how they are going to cope. Naturally they are going to look at what the government can do to help them.

Over the years Government has kicked the can down the road in terms of affordable housing. Prices have exploded, leading to over-borrowing and a lot of people who are now vulnerable to higher than expected interest rate rises. It’s absolutely awful and I feel for anyone who is struggling with the impact and the worry of all this right now.

Depending on how expensive the nursery is you could probably halve your childcare costs by going with a childminder. They are usually cheaper and often take around 3-5 weeks unpaid holiday a year. (I also think it's a preferable setting for under 2/3 year old anyway!)