Mortgage payment increase…

[HolyGuacamole28]

Our 2 year fixed mortgage rate runs out soon. I knew we’d have to pay more but it’s going up £800 to £2.5k!!! I’m really shocked and scared. We have two kids in nursery and life is not cheap and both me and DH work already work full time. Want to cry. Anyone else facing the same?

I read somewhere that a third of the population rent, a third own their house outright (that seemed high to me) and a third have a mortgage but of those, not many have very high mortgages or long left on the term. It’s FTB who are fucked.

"It’s FTB who are fucked."

🙄 that's not the case whatsoever

I can't see how that's right. Where did you see that?

@SaintJulian 32% of British people own their homes outright. 37% have a mortgage. The rest rent. These are the 2023 stats. That's why using interest rates to control inflation is an approach that falls so highly on a relatively small percentage of people.

@HolyGuacamole28 Ah, I understand. That is a tricky situation to be in if you have a high LTV and no chance to overpay and meaningfully shift it (and of course the higher the total sum you owe, the more you need to pay to move LTV bracket). And if you don't want to have affordability assessed, you won't want to move to a different lender, as they will need to do that (as well as value your property, and there's a risk that its value may have fallen since you bought, the way things are, further affecting your LTV).

I'm not sure if you can increase your term within the scope of a product transfer with an existing lender. If you can, this may be your best bet, with a promise to yourselves to overpay as soon as you can afford to, when eg childcare costs come down or your pay increases, so that you end up paying it off by the same date in the end. (I overpay by £100 a month since I got a pay rise and it will mean I'm paid off 3.5 years sooner.) I know it's scant consolation, but inflation and pay rises over the years will eventually eat away at the relative cost of your mortgage.

Thanks for that info @laclochette

I didn't know that. I'm surprised by the number who own outright I guess.

I know, right? I agree with PP that the rate increases disproportionately affect the population. A third of adults aren’t as squeezed.

Yes that seems to be the case given those figures @HolyGuacamole28

I hope things work out for you. The monthly outlay for you must be enormous.

SO many people are affected by this. We downsized in October because of a £900 pm mortgage increase, we just couldn't manage it.

@SaintJulian I was surprised when I first heard it too! Even more so to learn that in London, where I live, only 1 in 5 homes has a mortgage!

@cardboardnumerator

thanks for sharing this! Can you provide a link to this broker? I think I need to change mine

@cupcakesarelife yes, they come up as L&C but it looks like land in the URL. Loads of best mortgage deals showing on their website too.

www.landc.co.uk/

I also can't remortgage due to finance issues so having to stick with current provider going from 640 to just under 800, from 1.63 to 5.12. I'm keeping an eye in rates as was locked into one with current provider and already cancelled and fixed again as they went down. Hoping they somehow go down again this month

That's why using interest rates to control inflation is an approach that falls so highly on a relatively small percentage of people.

yep, huge intergenerational inequality re housing.

It's a demographic issue... and the demographic most likely to own outright (and to have made huge unearned gains in value due to house price inflation of the last 20 years) are also the same demographic most likely to vote Conservative (and tbh includes the only age bracket now saying the majority are planning to vote Conservative.) So there won't be any policy solutions this year that risk upsetting them (includes proper house building policies, dealing with the triple lock, shifting the burden of taxation more evenly between income and wealth, etc...)

also the general ageing population issue which is not helping the economy or rather the lack of planning for it.

This will be us this autumn/winter as well. House is going on the market in the summer and we hope to do a crab step sideways to a house of a similar size but in a slightly cheaper area. We have the added complication of a Help to Buy loan coming to the end of it's five year term as well and adding the £75k we borrowed onto the current mortgage (1.4%) would literally double it. That, on top of two monthly childcare payments, is an impossibility.

You need to get a mortgage broker, which is often free, to do a search on mortgages from all banks and building societies, like a comparison website. There are several mortgages out there for under 5 percent. How much loan to value do you have?

She's already said they can't be assessed again due to her husband's low earnings.

It sounds like he needs to go back into employment if his SE income isn't sufficient to get a better mortgage deal, tbh.

It sucks don’t get me wrong but I feel better off than a lot of people as it’s still affordable for me. I’ve just finished paying off my car loan which was really my only other debt so will try to overpay. It’s hard though there always seems be another thing. Storm blew some roof tiles off, child is going skiing with school next week and needs salopettes etc.

@cardboardnumerator is there anything to pay with l&c if you use them, like solicitors fees for deeds etc?

@Paw2024 L&C are a brokerage, not a conveyancer. So you will still need to pay conveyancing fees.

Thanks. I've never remortgaged before and clueless and also struggling for cash up front

Really, where does this figure come from?

It seems awful now but we had to do this in 2007. It added 6 years to our mortgage and made us feel sick but DC were young and we had no other options. However after a few years and the rates came down we kept paying the same amount so overpaid and we managed to pay off an £8k lump sum after my Auntie gave me £10k. She didn't want to wait until she died so she gave all 17 of her nieces and nephews £10k each. Anyway we finally repaid our mortgage last August over 3 1/2 years earlier than when we originally took our mortgage. So adding on the 6 years actually made no difference as it was just temporary. Rates will come down again and when they do keep paying the same if you can so effectively overpaying and you will recapture the lost ground.