Govt and mortgages

[Madeyemoodysmum]

I know this will be unpopular but it's driving me mad

Ok, the recent mistakes by truss have been monumental and they have lost
My Vote which was teetering Anyway

But interest rates
We're NEVER EVER going to stay this low forever

The govt can't protect you and bail
You put on everything

If you are over stretched then you need to Be honest with yourself.

Rant over. And feel
Free to pile On.

We could afford a mortgage of 600k when we were buying. We bought a house for £350k. Then the pandemic hit and DH lost his job. He managed to find one on a much lower wage. We were barely making it work and now we are fucked. Please please oh wise one OP tell me how I should have fucking planned for a fucking pandemic.

I remember very well the huge jump between 1987 and 88 going from 8 to 12 Percent. Many lost houses then. In those days everyone had SVR. Fixes did not seem to be offered. At least now people can fix for 2,3,5 or even 10 years. Because of this less will lose their houses this time round. Many also overpaid when interest was low. I still feel sorry for those if rates jump up to 6 percent. As energy help has impact inflation will lower so maybe BoE won't need to raise that much.

@User686545677 sorry to hear that & you prove the point that not every circumstance can be planned for.

Many people weren’t overstretched until the Government’s ill thought out policy, now rescinded, forced their mortgage offer rates up by in some cases several percentage points.

@User686545677, if you can hang on a few months rates might come down again. Maybe bank would allow payment holiday or interest only for a few months. I did that years ago for 3 months then I got a job and we struggled by. Banks will work with you if you keep them informed. Hope you find a way.

I agree op. I do have sympathy for people but I'm sick of reading posts on fb and the like along the lines of 'my mortgage has gone up to £1600, it's so UNFAIR, the Government need to DOOOO something!'.

Like seriously...this is your debt and your responsibility. What 'should' be done? All house owners get a subsidy maybe that the whole country has to pay back? Bollocks to that.

It's shit for lots of people but everyone makes their choice and has to live with it.

Some folk are gloating that others overstretched, I’m wondering what did they want the ‘overstretched’ to do?

Average wages are what 25k, double that for a couple then x3 to get a mortgage of 150k? The average house price is almost twice that.

Did you want them to stay in rentals maybe with housing benefit as sometimes paying more than the equiv mort or in social housing?

What exactly did you want them to do?

It's shit for lots of people but everyone makes their choice and has to live with it.

The point is for many younger people it's not a choice....

The point is for many younger people it's not a choice....

Not a choice to buy a house? How so?

I don’t think anyone is gloating, you’d have to be a pretty awful person to do that. But it is the case that lots of people have been at best incredibly naive.

This isn't just a problem for mortgage holders, rent increases will follow.

so they should stay renting even if costs more not too mention the insecurity of that?

Young people haven't had a choice regarding high house prices or wage stagnation, have they?

Well I imagine people expected a more gradual rise rather than everything suddenly going up massively within the space of a year everything except for wages of course

and a lot of people who stretched themselves didn’t do it because they are careless or wanting a big flashy home they did it because house prices are fkin ridiculous and they were desperate to have a home of their own

Everyone has choices. Simply because some of thise choices may not be palatable diesn't negate it being a choice.

It's shit for lots of people but everyone makes their choice and has to live with it.

Don’t have to live with it at all, the sweet relief of death seems pretty appealing right now. At least my life insurance would pay off the mortgage and my family could stay in their home.

@FruitPastilleNut

That's exactly what I mean.

I have sympathy with the cost of living as that's unforeseen and it's unfortunate for all and costing everyone

But the screaming about interest rates
it's your mortgage, it's your risk

@User686545677

If you really feel that way please seek advise from your bank citizens advise or similar.

Interest only Mortgages are out there. They reduce monthly payments hugely.

@User686545677
I'm genuinely very sorry for your situation, and as stated above have seen people in the past in similar situations. As a pp suggested, talk to your mortgage provider (if you haven't already) and try to come to an arrangement with them.

No one forced anyone into a bank to take a mortgage. Personal responsibility should be a factor in borrowing. Feminist's were celebrating the second often female income being taken into account forcing up prices so I'm not overly sympathetic now.

No people weren’t forced but renting can be very unstable and often more expensive than a mortgage anyway so I imagine people felt they were doing the sensible thing

I think it's pretty horrible to tell people they should have known this was going to happen - I don't think anyone could have foreseen all the cost of living increases that have happened and the fact they have all happened at the same time. It's not just mortgages that have increased, it's food, gas/electric, fuel - all those costs add up and go from being affordable to unaffordable very easily.

People potentially could afford the mortgage increases but not when everything else has gone up as well.

Everything is more expensive now so it's pointless comparing it to 20/30 years ago - it's not the same.

@Babyroobs I think your timeline needs to move a bit further back in years. I had a clear out last weekend and on my pile of paperwork to be thrown out, I had this remortage document saying I'm getting 0.99% in September 2015. If I remember correct, the rates plummetted to near 0% in early 2010. There was a period where if you have got a lifetime tracker before the market crash, you would have been effectively paying 0% interest.

However I remember I paid 5.99% when I got my first mortage before 2010. It's been low for a very long time and people would have budgeted accordingly. The problem is the sudden rise so no one can plan.

House prices will fall quickly. A 6% mortgage on a lower priced house will be similar to a 2% mortgage on a more expensive house.
The people who will suffer are those who already have a mortgage that increases and that they can't get out of.

And all this shock is because that Truss believed in chaos. Have you heard her speech about how chaos creates opportunities. It's despicable.

Interest rates had to go up some day but I never expected the government to work against the BoE's attempts to control inflation by implementing policy changes that will require even bigger rises by the BoE.
If banks haven't been stress testing applicants enough then that's not a government issue. They will always be reckless because unlike other industries, they will be assuming support like in 2008.