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

@ImBlueDab I think the rates for a 2 year fix are much higher, which is what is driving people to the longer fixes, like 5&10 year because those fixed rates are a lot lower.

We are going to need to find a new deal around the same time as you, and because things are likely to change for the better, we'll probably go with a tracker

How much did you pay for the house, in what year, and where?

When the value of the house goes up/down, it's only the equity that is fluctuating, the mortgage stays the same (minus any repayments you've made). To understand likely LTV for new mortgage you need to know current value, and amount left on mortgage (MSE have a useful calc for that).

@FabbyDab I'm not a mortgage advisor and don't have much knowledge about it so im sure someone can correct me if im wrong but from what I can understand rates shot up when Lizz Truss announced her budget as the banks were really worried about the impact on the economy. Lots of providers also pulled all their products of the market. However since Rishi has come in things are starting to calm so they have been going down slowly despite the BOE base rate going up consistently

Your LTV is easy to work out. You say you have 100k equity so if your house is worth 500k as an example it’s 100k out of 500k (20%) which is 80% LTV.
If you say the rough value of your house I can work out the LTV.

Interest rates have been rising to quell inflation caused mostly by the money printing in lockdown (furlough, jabs, tests, covid loans, eat out to help out). Ukraine then caused further inflation.

Luckily interest rates are now at historically normal levels, unfortunately people borrowed more than is sensible (i.e. very high salary multiples) during the years of artificially low rates.

We were on 1.44% fixed it expired in December. Have renewed on 4.44% with HSBC for 5 years. The best we could get in November was over 5% but the market is calming and mortgage rates are settling. I can’t see mortgage rates coming down anytime in the next few years and I need the certainty of what we’re paying every month. I didn’t want to go on a tracker and start January off paying £600 a month and it be £700 by June.

Ours is fixed until July 2024 then we will have 5 years left to pay on it. We are desperately trying to overpay as much as we can before we need to find a new mortgage. I'm praying rates come down a little by 2024.

That's one thing not worked out as can't quite gauge value of house think worth 300k.
Paid £237,500 Dec 2018
Put down 54 deposit and added fees but got 1k cashback Halifax.
Only borrowed 190k all together fixed 5 years at 2.44%, and think balance be will roughly be taking into account balance now average interest minus 12months payment then adding 12 months average interest makes balance around 160k when we come to remortgage.
Pay £858 now did take a payment break in 2020 and payments dident go up that much. .
We can't afford overpay this year as clearing debt and house improvement that decrease energy costs plus worries about the one car we run.

At 7% montly payments go from £858 to over £1200.
Maximum new term can only be 19 years.
Not sure how work our loan to value as thought part if it depends what it's valued at in December?
I used 7% as worst case.
But of predictions of peak base is 4.5% and trackers 1% more then 5.5% or even 6%not out of realm of possibility hopefully not 7% was stress testing worst case.
But most mortgages I assume run 1_2% above officially base rate thats how banks make profit.

From what everyone else says seems like banks deliberately making 2 years fixed deals more expensive option so forcing many fix longer term at peak rates.
I wish I had fixed 10 years when we brought now apparently in USA they fix for 30 years.
If interest rates definatly come down in 2024 think we might take short term pain and do tracker or stay standard variable rate and hope comes down in 2024 as predicted then try and fix.
I can't see it going higher than 7% especially if we in recession.

Thanks everyone who's contributed great to know people feel same and some have good knowledge and help others understand the mortgage industry better.

We don't ever want to move unless we super rich so need to keep cool heads.
Any improvement we make like boiler will increase house price.
I don't predict a house crash as simply supply and demand more people need houses than houses available.
Also many older people in large houses struggling down size suitable accommodation not many bungalows built these days they seem highly sought after.

We live in large city with 2 large universities that skews housing plus influx of ex Londoners although they migrate posher areas than mime which is wedged between industry factories and a big council estate.
We lucky we have plenty shops/ doctors/ amenities nearby plus great parks all we need is a extra bedroom and would love a downstairs bathrooms and utility the pain of 6 people in house and 1 loo is real.

Apart from 2 single glazed windows doors I think all the ups double glazed windows need replacing so that would be 1 big bay. 3 bedroom windows.
Bathroom/ kitchen and 2 doors at back.
Would love to add value at back
To do whole house big money but the 1 bedroom window leaks when rains.
The howling wind too.

May need to check roof tiles too as had bad damp back extension.

According to your screenshot you currently owe about 159k on a house that (if you remortaged) would be valued at about 300k. Your LTV would be 159 divided by 300 times 100 which is a LTV of 53%.
Even if your building society didn't do a valuation but assumed that the house was still the same price you bought it for the calculation would be 159 divided by 237 times 100 which is 67% so still a good LTV.

Anything under 80% is considered to be a good LTV so you should be able to access a decent mortgage deal whether you stick with your existing provider or whether you look elsewhere. I expect your mortgage provider will make you an offer when you get close to the end of your current deal. You could ask a free mortgage broker to see if they can find you a better deal.

We really wanted to fix for 2 years as I think things will settle, but the rates were so high that it was much cheaper to get a 5 year fix. We don't plan to move, so we'll just have to get on with it.

I've just calculated our LTV ratio and its 36% which from what I can see online is pretty low, and yet our mortgage will still go up £200 a month if we stay with current lender.

May not sound like a lot to some but it's half again of what we pay so big deal for us.

Surely with LTV that low we could get a better deal?

@Largethighsbadeyes what % are they offering you?

I'm in a similar position - deal ends in September and although I have 5 years left in theory, the outstanding balance will be a little less than £30k so finding a deal will be a bit harder and remortgaging fees would have a disproportionate impact. The flip side is that a change in interest rates makes less difference at this stage as more of the repayment is capital so moving to SVR doesn't look at bad as it would with bigger numbers.

Originally I'd planned to make a small repayment to bring it down to maybe 2-3 years to go, but I'm now tempted to just pay the thing off. I do have £30k in cash savings which I could use, I'd just need to hope for no emergencies until I build my savings back up.

I appreciate I'm luckier than many (although I've earned it with 20 years of repayments!) but wanted to share how I'm approaching it.

I don't know if your mortgage provider is offering you the best deal you could get but if you feel doubtul I would contact a free mortgage broker for advice. Martin Lewis suggests some brokers on his website

www.moneysavingexpert.com/mortgages/best-mortgages-cashback/

There are plenty of 3.5-4% rates around for 75%+ ltv.
Lenders jumped the gun and raised rates hugely last year so rates are gradually coming down.
Fwiw, I’m advising my DD to go with either a tracker or a 2 year fix when her deal ends in April.
5 year fixes are lower so they are obviously expecting rates to keep falling, long term.

I agree. Wouldn’t personally be locking into a 5 year deal now while rates are high but due to fall in 2024.
Though I do appreciate some people want the security of knowing a rate is fixed for a long time & they can pay it.

I think it was around 4.5% but I'd have to find the paperwork.
Appointment with mortgage advisor next week so will report back

anyone is on tracker. What is difference between tracker vs. variable?
How do you revalue the house (in order to bring down the LTV) ? Will you need to pay additional fees for a valuer to come down?
Thanks

A Tracker is normally 0.5-1.0% above base rates and rises /falls as the rate does.
Lenders like Halifax/ Nationwide etc. will use their own calculations to revalue your property based on area prices, if you are simply choosing another deal when your mortgage is already with them.
DD paid £268k with a 10% deposit in April 2020, according to the house price index, prices are up 16% in her area so she should have 25% equity, fingers crossed.
She can either go on a tracker with Nwide for the least hassle or go with a broker to see the best option, which presumably involves a new valuation.

I've been advised to approach my mortgage company when my deal ends this summer - husband is 75 this summer so our interest only deal should end, and we would need to repay the capital, but broker advised they may extend at a new rate as they don't want to be seen to disadvantage vulnerable groups (eg having to move when old and in a tricky market)

thank you

I went on the Halifax website yesterday and wasn't quite as terrified as I thought I would be, their rates for existing customer are around the 4.5% mark at the moment. I'm hoping by the time we get to September they come down a bit

I'm with Halifax and fixed at 2.44%
Mine expires Dec.
Issue is bank of England meet 8 times a year and they predicted rate rise feb and may so what we offered sept/ Dec maybe quite a bit higher.

Can anyone clarify the standard variable rate for me as I'm sure husband misunderstood.
Example we take out mortgage 5 years fixed at £858 a month.
The paper work gives illustration after this period will be £1100 per month.
Husband thinks that's fixed and that's what we will pay.
I think he's wrong as offer made will be subjects to base rate at that time and bit higher than base as that's how banks make money.

@Echo40 I'm pretty sure that's what you'll pay if you do nothing and stay with your lender. Every time my fix has ended, I've then got a new fixed deal which is better than the SVR. Most people get a new deal with their existing lender or shop around and move to someone else - whatever gives them the most for their money.
I think people stay on the SVR for reasons such as wanting to move and not be tied in, or they can't get a better deal due to their credit record etc.
So I think you're correct on this one.

Oh hang on @Echo40 I think I misread what you meant.
You're still right I think. The SVR will be whatever it is at that time, so the illustration is just based on what it is now, not telling you that's the rate you'll get after the fixed ends. As you point out the SVR will change depending what's happening in the market etc.