Lost our 4.4% rate ... mortgage going up £1k

[Kalodi]

I thought we were being so sensible, I secured a 4.4% rate 8 months with Natwest via a mortgage advisor but somehow we have lost it. Just got off the phone to them and sat here in tears. I don't understand.

We will need to go onto a new product at 6.8% rate.... which means £1780 a month. We currently only pay £795pcm. DH only takes home £1600 a month

Mortgage advisor said it might be best to phone Halifax and ask to go interest only for 6 months. And hope interest payments come down in 6 months time and/or sell our home in the meantime.

Sat here in tears because I'm 20 weeks pregnant and thought we would afford another baby, we had carefully planned by securing it early and now this baby won't even have a home.

Doesn't help that work today said no planned promotions will now be happening this year and instead we are facing some redundancies.

We remortgaged last October but you can arrange a deal up to 6 months before so we set it up in May. The first broker lost our initial deal because he delayed processing it by a day and the deal changed. I was so annoyed as we’d got everything to him by the deadline. I then tried London and country brokers for a comparison and they actually found us a much better deal so we went with them.

I’d try them and look at trackers for a year.

I know this might sound tough but you need to look at all options. If you are the high earner can you take a very short mat leave and pass remaining as shared parental leave to your husband? Not sure how it works but I read it might be a thing.

I think @Mulhollandmagoo‘s advice is great. Make your peace with switching to interest only for a time, stash any spare money and then reassess in a couple of years and pay a chunk off that you’ve saved (hopefully) then.

That's so tough. Most mortgage deals will only last 6 months at the maximum. If you'd secured it 8 months ago then you should have moved on to it 2 months before old deal expired even if you had to pay a penalty. I'd take the extra 5 years and ask for 6 months interest only but pay off anything extra you can. From what news papers report by Xmas rates may have peaked and then in New Year start to come down. In 2008 we had to extend our mortgage term by 5 years. I cried because it felt like we were moving backwards. Then rates got lower and we overpaid and after 4 we remortgaged taking off 8 years from mortgage. We also overpaid whilst rates were low and now we've paid it off early. So don't think that because you extend your term now you can't still pay it off earlier. It's always tough when kids are little but once they are both at school you can go back full time and you will be better off.

With your current low mortgage, have you been continuing to save or has your surplus salary been taken up with renovations and childcare? What are your gross annual salaries and what percentage of the purchase price did you put down as a deposit?

depends on your timeline. wont come down much for years, if ever. x

Interest rates will continue to rise. House prices are falling. Interest only is a terrible idea. If you're going to sell to cut your expenses, do it asap and aggressively.

This kind of thing is going to happen to all of us with a mortgage to one degree or another.

Thanks Tories!

(You can't sell except as a huge loss around here at the moment, although it is an expensive area.)

Have you actually spoken to an independent broker or only directly with the bank? If the latter, find an independent broker as they will probably be able to get you a better deal. We've previously used London&Country and they were very good, also recommended by MoneySavingExpert (also have a look on that side for advice re mortgage rates).

I've never heard of locking in for 8 months either. How much do you earn, is there any way you can cut back? Do you get more than just smp. ? Have you checked entitlements to Universal credit adding in childcare costs etc so you could cut mat leave short ?

You can thank the conservatives for that!
No advice, but you have my sympathy. Things will be very tight for many for a long time to come.

Sympathy OP. Hope you can come up with a plan. Let us know how you get on.

I’d try and ride out the storm , rates will definitely come down next year and house prices will rise again from 2025 onwards.

Prior to this latest Tory fuck up we were paying our mortgage off faster when we could and hoping to get mortgage free in about 7 years.

Thanks to the mortgage rate rises we've had to extend our term almost to back where we started to weather the increase without having to take in a lodger (that we don't have room for) Or weekend jobs that we are contractually not allowed to do and wouldn't cover it anyway.

One of my mum friends has term time air bnb type lodgers now to help her afford it while her eldest is at Uni, or weekends when the kids at hair dads. She puts their details in our WhatsApp in case they murder her.

Very bad advice. x

It's not going to come down that much! The days of 1% mortgages are over permanently

Not to be facetious but that's how my mum's friend lost her house in the 80s and ended up staying with us with her kids. Trying to ride out something unaffordable that went on for years.

Mortgage rates went up to 15% and her mortgage payment quadrupled, house prices dropped, people were in negative equity. She was repossessed and two of our neighbours in our close were repossessed too. It really hit home to me. It was so shocking that people could lose their homes because of something so out of their own control.

Rates will probably come down marginally next year but long term base rate average is currently sitting at between 4 and 5%. Which is the historic average. So nobody should be sitting waiting for interest rates to go back to what they were. People need to take action and plan for a 'new normal'.

When I say rates will come down I don’t mean to 1%. Next year we will see rates start to drop and then over the following 1-2 years they will settle around 2-3% as the new normal. 2025 will see the start of prices increasing as confidence grows. By 2030 house prices will more expensive than they were 2020.

When I say ride it out what I mean is , if you can go IR only , extend term , rent out house / move somewhere cheaper then consider it (obviously the OP will know their situation better). If above happens then this period may be a very bad/hard period lasting 2-4 years but over a longer stretch of time it will show growth

W head a call with our mortgage advisor last night, and have had to kick in a deal at 5.9 % that means out mortgage will double in February when our fix runs out (another grand and some a month). She said she was hopeful this would be the worst case scenario and interest rates might come down a bit between then and now in which case we can get out of this deal and get a better one with 5 days notice (at any point between now and 1st March). We can just about afford the increase but we will be watching every penny and there will be not much left after food, bills, petrol. So im praying for a small miracle on interest rates or else we'll be a bit screwed. We can't even downsize with any ease as we have 4 kids between us and nothing is selling here anyway.

A division of Nationwide, Mortgage Works, has launched a 4.99 fixed today. Get in quick to get an offer.

I have just read an article in the Guardian saying there are now residential mortgages available for 5.15 with Halifax 5 year fixed rates. Could you try this OP?

@Kalodi Hi I just wanted to make sure you know the Halifax today brought out a new 5 year fixed rate of 5.25 percent for residential mortgages. That's a lot cheaper than the over 6 percent one you were offered. Could you look quickly because it is sure to be snapped up.

5.15 not 25

Thanks everyone, buried my head in the sand a bit as had a shit scan on Wednesday which was then followed up by need for a cerclage to keep baby in on Friday and still recovering today

Will give my mortgage advisor a call Monday (sister has recommend I use her one)