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Original poster

Mortgage repayment hike - what to do?

39 replies

ladybluesky · 19/09/2023 13:04

Facing the prospect of a £600 hike in mortgage payments in July next year if interest rates/mortgage rates don't come down. Can't extend term due to age of partner. Both full time and earning full potential and good joint salary/ no childcare costs or school fees but cannot see a way of cutting anything more from monthly outgoings as we are not big spenders except on high housing cost to be in area for good schools and close to work. Interest only mortgage for 2 years would help stave off the inevitable but would mean a big (I think?) jump in repayments when switching back to repayment. Anything else we can do. Grateful for any thoughts, ideas or avenues I haven't explored. Thank you!

OP posts:
CrazyHamsterLady · 21/09/2023 16:48

I’d take in a lodger if I were you. You can charge £7500 a year tax free (£625 a month) It’s not fantastic but at least it would cover the rise in the mortgage without having to take on an extra job.

CrabbiesGingerBeer · 23/09/2023 08:40

CrazyHamsterLady · 21/09/2023 16:48

I’d take in a lodger if I were you. You can charge £7500 a year tax free (£625 a month) It’s not fantastic but at least it would cover the rise in the mortgage without having to take on an extra job.

If you live in a city or big town, you may want to look at a M to F lodger who only stays 4 nights a week. It obviously won’t pay as well but you will get your house to yourself on weekends.

NW1738 · 25/09/2023 12:44

Forget about it until Jan/Feb ‘24?

You can’t get a new deal until then, so who cares what happens between now and then.

I wouldn’t overpay whilst your rate is low, and your LTV is healthy. Save in a high interest easy access such as Chip at 4.84%. Pay off a lump sum(S) around your annual cut off for overpayments (if limitations).

Get the best rate in Feb. Get your broker/DIY to check weekly through to July, change to a better deal if one arises. Not having to commit until your current fix expires means you get the best deal in the preceding 6 months, this means if there are ups and downs in confidence, you’ll still get the best deal. People who did this through 2023 would have got decent deals in June-time, and again now. I don’t actually believe that many people got stuck with 6+% fixes, remortgaging ones anyway.

PS: 2019 to 2024 at 1.5% (I am guessing?). Very jealous.

sicilianpizza · 02/10/2023 14:16

@NW1738 thanks for this - all sounds good. Yes, rock bottom rates for a long time - I know how lucky I've been being able to scrape a deposit for first purchase on a low rate and work my way up and also that it was never guaranteed to last

Zanatdy · 03/10/2023 07:38

Second job in evening for one of you? That’s what I’d do, that’s what I am going to do (full time too, very busy job) if I go ahead and buy. Thinking of continuing to rent for a while

RaceToTheMiddle · 03/10/2023 07:43

Yes- Agree with those saying don’t use your savings to overpay. Such a short period will make no difference.

Sounds like you’ll need these savings. So keep them.

AnneElliott · 03/10/2023 07:51

When your partner gets to pension age do they get a lump sum? As if so, the mortgage company might take that into account and let you extend to that point as at that point you'll have a lump sum to hopefully pay off the balance?

GOODCAT · 03/10/2023 07:55

With reference to your partner's age you can get longer term deals than you used to be able to get. Just make certain you can't go longer if that would help. Term insurance to cover the whole term tends to be more difficult once past state pension age.

43percentburnt · 03/10/2023 07:58

You can take a mortgage to age 75 and 80 with many lenders - speak to a broker (get a recommendation from friends).

However when you took out the mortgage you will have been stress tested at a higher rate. What has changed and made it unaffordable? Loss of job/reduction in hours? Can this be addressed? Or have you increased other debts (car finance/credit cards?) if that is the case can you over pay in them for the next few months to decrease other out goings? If you give us a breakdown we may be able to help?

The downside of extending your term is it maybe cheaper while you work but how will that be affected when you retire (or are you genuinely going to work until 75?).

can you downsize if you have a decent amount of equity?

Dibblydoodahdah · 04/10/2023 12:02

It doesn’t have to be interest only or repayment…some lenders do a combination of both. For example, interest only on 50% and repayment on 50%.

ParrotChatter2 · 06/10/2023 09:33

If you have paid into a private pension
I believe that some private pensions allow you to take a tax free lump sum at 55 (age increasing to 57 I think)
Does this help ?

sicilianpizza · 06/10/2023 19:54

Dibblydoodahdah · 04/10/2023 12:02

It doesn’t have to be interest only or repayment…some lenders do a combination of both. For example, interest only on 50% and repayment on 50%.

I didn't know that - will speak to broker about this as it sounds ideal. But from past experience have found the more niche mortgages including longer terms are never the best deals.

Dibblydoodahdah · 06/10/2023 23:22

sicilianpizza · 06/10/2023 19:54

I didn't know that - will speak to broker about this as it sounds ideal. But from past experience have found the more niche mortgages including longer terms are never the best deals.

Show quote history

Virgin Money do it and their rates are generally pretty competitive but you do need a good amount of equity

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