Fixed mortgage ends 2023 support thread

[Echo40]

Just wondering anyone else same boat?

Our fixed 5 year mortgage ends Dec 2023 currently Halifax fixed at 2.44%.

Freinds daughter trying get mortgage currently and she's been offered 6% as rates always above base rate.

Bank of England predict least 2 more rate rises in spring go try and control inflation they say as inflation the enemy.

Looked at recent annual statement.
Worked out what would be left to pay I dec.
Used Martin Lewis mortgage repayment calculator.
Can't extend term due to age.
Want to stay on repayment mortgage.
House definitely worth more than we paid and we put down 22.5% 54k so think we should have least 100k equity so no idea of the loan to value who get us a good rate.
I think we can start shopping around 6months before and think read Lloyd's would honour quote they could give us in July.
I put in worst case interest rate of 7%, as was trying to stress test us and see how much Increase we could be looking at.
Its around £300 per month at 7% as its so far away still no idea I reckon 6% very possible.

But add in Increase in energy and food which continues to rise could be looking at finding a extra £500 per month how is that viable for so many?

Not sure what to do trying not to panic it's beyond my control.
I'm focusing on what is in our control as follows and wondering what everyone else is thinking 🤔 or doing.

We wanted to extend as have 4 kids 3 bed house but scrapped that idea and we moving our bedroom into front lounge as have small lounge at back and divided one bedroom into 2 sides this way 17 year old gets own bigger room.
Son gets small box room and 2 middle girls can share but be divided compromise is much smaller lounge.

Added a 2nd income its minimum wage but every little helps.

Not through choice new boiler as old one condemned hoping long term that save us a little money and placed £2700 on 0% credit as paid 1k cash from savings.

Considering costs and savings of Woodburner in dining room as back of house open plan as worry about energy next winter without any government help at the moment we getting 67 month and cap is £2500. Cap goes up to 3k April and based on current dd we already exceeding 3k a year if stayed same for 12months.
We really need to replace 1 single glazed window and door this summer big expense but offsetting expenditure v energy bills.

Debt we have some credit card debt not because of luxuries just Increase in living costs mostly car related as have very little savings.
Transfered bulk of it to 0% deal think 15 months left on that need to check.
Aim is with credit card 2 which we do pay interest on is clear by summer.
Dont want to go into mortgage with large amounts debt or as they say high levels of gearing.
Credit score fairly good.

Other steps want to achieve before winter is

Save up 1 k emergency fund
Clear overdrafts and use them as emergency not credit card as short term help not live in them every month.

Have a xmas savings fund and buy majority presents early.
Already brought cards and other items cheap in sales.
This should take pressure off in December when I'm stressed about new mortgage.

As above try and find ways save money on energy to help us cope next winter maybe build up a credit over summer months give us a cushion.
Thinking getting air fryer, heated clothes airer and dehumidifier to try save some money on energy.

Stock pile more long life food do tinned / dried things with long life.
No foods like cleaning and bathroom which will help lower grocery bill for 2024 as our increased mortgage payments start xmas.

If we clear debt
Try lower food and energy
Have savings

Hopefully can absord the Increase still a worry hence why forward planning now.

Wondering if very high if even worth moving maybe as well continue with current lender on variable rate.
If we officially in recession will Bank of England start to lower base rates can't see it in 2023.

Anyone else stressing or planning.
Any ideas welcome
Think Martin Lewis keeps warning government this be next big crisis as everything is going up.
Even if inflation goes down energy and food prices won't fall.
Most peoples wages not keeping up with inflation anyways.
Will even effect renters too.
I guess the housing market will drop as house opposite sold 230k during time truss came to power then buyer lost mortgage deal so back on market and now months later sold 290k.

www.manchestereveningnews.co.uk/news/property/word-warning-millions-homeowners-fixed-25932216?int_source=amp_continue_reading&int_medium=amp&int_campaign=continue_reading_button#amp-readmore-target

uk.news.yahoo.com/million-uk-households-mortgage-crisis-155952811.html?guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAANZx-abkLVCD5EFxvgng5NPtX8Qq2XltIoDkkVuowETEvGWU66PWd_TGqRANmEA7ZUHawSNUb5BamGmVaquZnrUjOUSMQoSqvaahvsuV2Zyt20w6XAf0EM-yBWjngmvhje7K5KiagW_Q7tJoXESE-CRkpQDg6kbuIOhC3eqiFpkr

amp.theguardian.com/business/2023/jan/08/mortgage-payers-face-squeeze-in-2023-after-uk-interest-rate-rises

www.express.co.uk/news/politics/1719063/bank-of-england-inflation-uk-economy-interest-rates/amp

I am so financially illiterate it’s embarrassing because I enjoy being educated in many other ways but shy away from maths. DH was very good at it though and thought a variable was the way to go! So yes, I am worried! We have had pay rises but they are swallowed by the increases.

Also no savings. If anything happens to the car we’ll be in the same credit card debt boat as you. And we’ve put off the work we need doing on the house (although in your case it sounds like it will
make the bills cheaper so maybe you should bite that bullet?). I’m mulling over renting out the spare room but I don’t think anyone would want it without a decent bathroom, which we can’t afford to renovate! (Bathroom not just ugly, it’s unhygienic as it doesn’t have extraction or electricity!!)

I'm in the same boat. Fixed rate ending in October.
Have to rush now but will be back later to read properly.

Not sure if this is allowed but I have used Trussle (now known as Better) for a remortgage and a new house buy and they were great - costs nothing and if you use the below refer a friend code and complete on a mortgage through them you get £100 vouchers and so do I.

Here is your personalised Refer a Friend code.

ssqt.co/mznnVFX

When your friend signs up via this link, we'll reward you both with £100 in high street vouchers when they complete on their mortgage.

They found my BIL a much better deal than his mortgage broker who was charging £599!

We looked six months out and booked a deal for when ours ends in March. We would have lost a bit in fees if rates had dropped and we’d switched to another deal, but obviously that hasn’t happened. We are currently on 1.99% and will go on to a five year deal at 3.66% The jump in payment will be about £130 a month, affordable by itself but still worrying alongside all the other rising costs.

We ported a mortgage when we moved. We've got our lowest rate half of our mortgage due to be renewed November 2023 and then the other half due the following year. I've recently reduced my hours to part time so I'm not even sure that technically we could get a remortgage on our house because of earnings!! We'll have to take, therefore, whatever our lender offers. We'll most probably go with a tracker though rather than a fixed until we know the score about whether things will go up or down etc. I don't think we'll ever see those lows of 1-2% again, but I think we can probably get a better deal fixed than 4-6% so tracker it is!

You can currently get rates at 3.8% for a two year fix which is obviously a lot more than you are currently paying, but not the 6-7% you are talking about.

Forecasts are expecting rates to even out a bit after April and not rise as high as people thought they would. Current thinking is they will be about 4%.

Don't put yourself down personal finance is not something we learn at school usually we learn via our mistakes.
I failed gcse maths but have become better than husband at personal finance.
As for the maths the MSe mortgage calculator does all the working out for you.
You select type term and suggested interest rate you think base could be.
Mortgages are always above base rates thats how banks make profit.
With repayment type you pay bulk of the interest starting years of the loan.
As we completed end of 2018 moved new years eve the latest statement was handy as told me current balance to date plus interest each month average interest on ours was £315.

So I took balance to date in bold at end of statement.

I multiplied my monthly mortgage payments of £858 .
Deducted 12months payment from balance then added in 12 months x average interest added which gave me ball park number add into MSE.

www.moneysavingexpert.com/mortgages/mortgage-rate-calculator/

I do keep a spending journal I write down every purchase so I know what we spend on each category.
I di set a budget and find having multiple bank accounts different things work for us.

So current account 1 fixed bills direct debit.
Current account 2 variable so food / petrol.
Current account 3 child related expenses as child benefit gets paid into this account
Savings going to open up extra as really need a car maintenance fund and start saving for new car in 2024 although god knows 🤔.
We already been affected by paying £9 to enter clean air zone as we have diesel.

HMRC bill 2022 was stupid and dreading 2023 need to do tax return.
Minimum wage increases in April will push my income into tax as threshold frozen so basic rate still £12500 and expect husband be screwed at other end of scale.
On paper out income seems good
We have 4 kids and 1 dog
We only run 1 car.
We had no holiday in 2022 and will have no holiday 2023 as making improvements to house and paying down debt before everything goes up has to be the main priority.

We were forced to redo boiler and had no heating for 4 weeks which resulted In £450 electricity bills in December as used more electric as no gas.
We cook with electric
No gas fires
Electric shower
Using drier because we have to.

Glazing and wood burner seem next big sensible investment but that could easily cost 5k but thinking wider picture and offsetting costs as worried about increasing energy bills and mortgage at same time as xmas.

We going to try and grow lots things in pots on front garden again this year tomatoes did well last year.

Small things help me feel more I'm control.
I can't change the economy/ awful government or what bank of England will do but I can micro manage our household finances.

Doing a pantry challenge in jan and feb because at xmas I filled the freezer with reduced food so we meal planning around what we have and just buying fresh for packed lunches.
Using the money saved to add to savings as have 4 short term goals

1. tax bill worried about this as have pay some child benefit back as exceeded threshold in 2021.
2. credit card 2 wanted cleared by April but think mjght take us longer sadly as husband getting a pay cut.
3. plant seeded brought reduced in sept to try and grow some food to save money on food budget. 4).Big room move means spending some money on decorating plus we need new bed and other furniture. Ordering new bed new but trying find rest of it on market place.

You be surprised what people will rent honestly.
My driving instructor used to have very short term students rent.
Try university that teach health care as many students need short term accommodation In different cities to their uni as 16 week placements all over the country.
As recently looked at radiology open day t local uni with eldest its most likely she stay at home for university.
Our street has loads of HMO and overpriced rentals in very poor condition.

Our house money pit we brought it as doer upper in so so area .
We try and do as much as we can ourselves and husband is not naturally good at DIY.
But we buy in electric/ carpentry and plumbing.
Would love a new kitchen and bathroom but won't be able to afford that for few years.

Your bathroom

Would a deep clean and bleach
Some new lino
New shower curtain and towels
A manual dehumidifier or battery operated one help update your tired bathroom.
Add nice vase flowers candles fancy hand wash sounds better than my uni house share.

Ours ends in a few months and broker has provided options of paying £4-500 a month more.

We have over £100k equity in the house so looking at selling and buying a much cheaper house or event renting somewhere cheaper for a bit if house prices are dropping, so we have some breathing space.

My job is well paid but contract ends soon and I can’t find anything that pays as well so it’s only going to get harder and I don’t want the constant pressure any more.

shame as we’ve only been in this house two years and we love it and children settled in school but moving to cheaper area/smaller house is our only option.

our fixed rate mortgage will end April 2024. So interested to know all the options.

Ia it even possible exited mortgage without fees?
We not even 6months out yet so can't start looking.
Think next predicted 2 rate rises will be before July when we can start looking.
Used a independent whole of market broker last take so will go back see him.

What's difference between tracker and staying on variable with current provider?
Will it be at actual base rate not above base rate?

I would love 3.77% just think by time dec swing round bit optimistic.
I stress tested the worst case interest as freinds daughter been offered 6% now for a new mortgage 1st home.

Personally after renting many years with kids is rentals are more expensive try and stay on ladder even if buying a flat.
As one landlord sold up after 9 years was so stressful finding new place near their schools
3 bed rental here is least £1200 more than our mortgage.

If worse came to worse husband would do agency work on his day off or I could maybe increase hours.

Trackers have rates at the moment but that's because there's a risk. It tracks the base rate and of course is always higher but not 6 or 7% which is what fixed rates tend to be at the moment. (5 years are less but again a risk as you could end up paying circa 4 or 5% when base rate falls in a year or two). So yes a tracker would go up with the base rate, but by the time we renew, I think the general feeling is that rates will be starting to plateau/ fall again. So I would rather track than fix as I believe the risk will be small. However! This all depends on the climate next year, which obviously I don't know at the moment, this is just based on what I've read and predictions

Our fixed rate ends end of Feb. Currently on 2.44% with Nationwide and fixed with them again at 4.95%.

We are so very lucky to be in the final 5 years of our mortgage so the amount due is not astronomical, but enough that we were worried.
You may find that your current provider offers a better deal than going elsewhere.

Our five year fix is due to renewal September next year. I was going to shove a bit of lump sum before going into the next fix therefore can’t really book a rate in advance as need to be on SVR for a month not to be hit with ERC. Not sure I can tho as started dipping into savings due to CoL crisis.
LTV is good unless house price falls 50% or so and should be in LTV 60% bracket (not that it makes huge difference to LTV 90% tho).
Cant extend, too old

@Onegingerhead have you tried speaking to your lender about when you can put that lump sum in? If you stick with the same lender they may let you do it without ERC before the fixed deal ends, sometimes months before. Probably worth asking. Also depending on the amount it might be possible to pay 10% lump sum without penalty

Thank you so much for explanation.
What I don't want to do is fix again 5 years at highest rate.
Thinking about it most I would fix would be 2 years.
Trainer sounds more sensible.

I can't make any sense out of financial journalism or economists predictions anymore they nearly always wrong.

When truss/ kwartang did disastrous mini budget they were predicting rates of 7% or higher.

Then Hunt took over and they acted like he saved the economy all would be good..

The biggest issue is inflation its pnly lever Bank of England have and that's clobbering anyone with mortgages extra to try and bring inflation down.
But inflation is not so much demand driven its issues with supply and demand thats pushing up energy and food prices
Its very different to recession and downturns of the past.

If the bank of England guy is saying 2 more rate rises in 2023 needed although will go to vote then I expect that's what will happen .
Bank of England usually copy the FED and American inflation is lower than ours.
The government will support higher base rates as they need inflation lower.

www.theguardian.com/business/2023/jan/09/bank-of-england-high-inflation-could-last-longer-than-expected-chief-economic-energy-prices-uk-recession

@BookwormButNoTime where is doing rates of 3.8 for a 2 year fixed?

No I haven’t yet, but will try to give them a call. EPC shouldn’t be too big as in the last statement was quoted around £1K if I fully repaid the outstanding balance (I wish!). It would be more than 10% though. Have time to think until March when it will get to 6 month before renewal…

@Echo40 I know what you mean, all the predictions don't seem to have come about in as awful a way as they first predicted - but things are still hard enough! Once our mortgage rates are renewed, even with trackers, we could be paying £300 a month more. It's frightening. We'd planned on a lot of home improvements when we moved, but that's all on hold now as we're too scared to spend the money we have in the bank. Our LTV is 60% but it doesn't make a huge amount of difference. And that's hoping that we can get away with our house being worth the same as we bought it for! (It's a very competitive area, luckily)

Ours is on 1.6% due to end in June, but we overpay a bit. Am relieved to hear ppl getting lower than 6%, as I had assumed that would be the average. We'd like to move so everything is with the mortgage broker. We can afford a lot less now rates are higher yet the market has not really dropped yet, so considering delaying the move. Not quite sure what to do.

Mine ends this month and I've gone for a 2 year tracker so whilst it's a lot higher than I was paying (2.2%) its not for long, it should come back down in 2024 and there was no fee attached.

I didn't want to fix for 5 years at the rates being offered as the current prediction is that there will be a peak and then things will drop back a little. I have stress tested for higher than predictions so I know I can still afford in the worst case scenario.

Tracker is 1% above base rate.

We're up for renewal in June and spoke to a broker yesterday who said our best rate is probably somewhere around 4.7 (LTV 60%) We'll be paying around £700 a month more.

The 3.8 deal above sounds amazing but does it come with high fees?

We're inclined to take a gamble on a variable/tracker rate with the view that things should settle by the end of this year.

@BigGreen the prices or at least the demand, seem to have dropped a bit in our area over the last few months. It's not hugely significant though so far and there are a lot of conflicting predictions out there. Some saying it'll drop significantly and others saying it won't really drop as such, just won't rise at the rate huge rate it was previously. We bought in October at the top of the market (so offers made in August). I do have these pangs of worrying we paid way too much (we overpaid based on supply and demand in this area) but we also sold our house at a premium so it's all relative really. If I was you, and your circumstances allow, I'd wait a bit and see what happens. But also get that life must go on

@NashvilleQueen agree with your approach 100% and if things are the same in a year then I'll be doing the exact same as you