Baby due and mortgage doubling - what am I going to do?!

[mrsthomasx]

I feel I just need to let all my feelings out… this is not a moan just need somewhere to write all my feelings down.

After 2 years of trying me and my husband are finally pregnant and expecting our first baby in January 2023 which were both over the moon about.

Our 5 year fix mortgage rate is up for renewal next year and after having a meeting with a financial advisor we’ve basically been told that our monthly payments with the new interest rate will double which quite frankly worries the hell out of me.

We are lucky we are both well paid but as soon as my maternity pay kicks in next year it will basically mean we’re living month by month with everything else going up and will mean that I’ll have no option but to go back to work much earlier than planned which upsets me. How could I leave my 4-5 month old baby??!

We’ve both worked so hard to get the jobs we have even if we’re not paid massive salaries so that we can start a family and just when everything feels like it’s falling into place this happens.

We’ve been saving which is good and will help to an extent but I’m now having to turn around to family and say that we won’t be getting gifts for anyone at Christmas which I feel incredibly embarrassed about (not that they’ve made me feel this way it’s just how I feel!)

I’m just at a loss as to what to think of it all and needed to write this somewhere.

😭😭

Have you factored in childcare costs to your equation?

Not read the whole thread so forgive me if this has been suggested but can you extend the term of your mortgage when you remortgage? It would cost more in the long run but be more affordable in the short term. If you get a pay rise in the future you can always overpay to try and “catch up”

As you’re pregnant it suggests you’ve got a good few years til you would retire so it just means you’d be paying that bit longer.

I assume you are both reasonably young. When you have a young family it is often a time when money is tight without the added factor of rising interest rates. I would push out the term of your mortgage to make it affordable in the short term. when you can afford to you can overpay, this will then over time reduce the balance/term. Further down the line with job promotions etc you can make larger overpayments or remortgage to a shorter term.

Congrats

4/5mths isn’t a bad age to go back. Hits before separation so bsby should settle easier

I went back at 17w as self employed and earns more in a day then a weeks ma so it was a no brainer iyswim

as others said csn you extend mortgage. Even to 20/25/30 years to make monthly payments lower

Then once children back at school over pay and reduce term

Plenty of people have to go back to work at 4-5 months, you’ll both be fine.

Like others have said though it’s worth talking to your mortgage provider to see if you can extend the term or go interest only for a bit, although be careful as they may take childcare into account when you re mortgage later on.

I know rates are going up, but am surprised that your monthly payment is predicted to double.

Are you able advise what your current monthly payment is and what your current interest rate is? And then give an idea of the new offer you’ve been given by your FA.

Its worth doing mortgage comparisons online yourself. And also worth remembering that, whilst you might find a deal a few quid cheaper per month with another lender, you need to factor in the cost/hassle savings for staying with your current lender - no extra credit checks, no new valuation costs etc.

And definitely worth keeping an eye on tracker offers. I’ve always done fixed offers so far through my mortgage term. But am seriously keeping an eye on trackers right now. My fix is due to end next summer.

Re Christmas gifts - embrace the freedom! Me and my small family did this two or so years ago. And I also did it with close friends. I buy gifts for two young children of a friend and that’s it. The grown-ups (family and friends) are more able to meet up for occasional pub lunches, etc which is much nicer. We all still do birthdays. But it takes the pressure off.

How are you preparing for baby?

Theres loads of Facebook pages with mums giving free items away. I just have a carrier, playmat, clothes, monitor away for free. I’d rather things be used than thrown away so I’m sure you can find good quality things for free or very cheap.

Will you be having a baby shower? Maybe your family and friends could all chip in towards one big item like a pram/cot?

Babies are not that expensive once you’ve got the big items. They do get more expensive as they get older then but hopefully by then your finances will be better.

Good luck!

I went back to work when both my dc were 6 months, because that was the maximum mat leave at the time. It was fine. Its actually easier in some ways than at 12 months, because they settle that much more easily.

A fairly drastic option is to take additional borrowing when you remortgage and use this to fund mat leave. I’m doing this because I’m becoming a single parent and I don’t feel ready to go back to work and leave baby and currently very challenging toddler plus don’t have childcare until baby is 1 anyway. It’s not ideal but I feel ok with it because I have a lot of equity in my house and I think my financial situation will improve within a couple of years.

Otherwise mortgage holiday / going interest only is a reasonable option.

You should work out how much you would gain by going back to work early after childcare and factoring in statutory maternity pay. It may not be that much or may be better to go back part time.