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?

Sounds like they have given you a quote if you revert to the standard variable rate rather than a fixed rate if they have quoted you 8% - that would be ridiculously high for a fixed rate. I would contact them to ask what fixed rate deals they can offer you if you stay with them.

You can look into remortgaging 6 months before your current deal comes to an end so can do it now. L&C seem a decent broker ( & free to you) if your situation is straightforward. They may not be so good for more complicated situations like self employment I don’t know.

Agree - it is perfectly normal for FTBs in particular.

You have my sympathy @HolyGuacamole28 don’t think it’s your fault in any way. I can’t offer any advice that hasn’t already been suggested in terms of extending the term etc. But I do think you can take comfort from the fact this situation won’t last forever. Once your childcare costs reduce you will have a lot more disposable income so can start overpaying on the mortgage to reduce the term again, if you do choose to extend it now.

It has always been the case that lenders charge higher interest rate for people with a high LTV.

But I note you were unable to provide any data as requested by @Butterdishy to support your claim that lending practices have changed with regard to lenders wanting bigger deposits than they used to.

DH works in the city in finance. He mentioned this to me as he is involved in gilts and bonds x

Ah here we have the famous husband that works “in the city” in finance and knows all the Important Stuffs about Gilts and Bonds complete with “x” 🤣 what greater source of evidence could there be?!

Wow that is SO impressive. It has completely convinced me x

This has killed me 🤣🤣🤣

The average deposit put down by a FTB is 15% apparently. I haven't been able to find data on how that's changed over the years. However you can see from this visual that in many areas, the average FTB deposit is much higher.

Sorry it's actually 24% average FTB deposit!
The 15% is the average deposit for 3-bed homes, 24% across all FTB transactions.

Interesting @laclochette

I heard the average FTB in London is 120k ish which chimes with my anecdotal experience

Less than 5% of mortgages are >90% LTV. x

I think most people expected rates to increase back to the "norm" and that it would have happened long before now. They've been absurdly low and caused huge house price increases - which haven't helped anyone (yourself included).

@fonfusedm The average deposit for a FTB in London is £144k!

I would say that's a crazy high deposit but I can well believe it as I honestly don't know how any FTBs get on the property ladder in London unless they have help from the Bank of Mum & Dad.

@Twiglets1 oh absolutely. I put down £75k from a small inheritance and a lot of savings. My partner got £200k from his parents. Another friend put down £250k also from parents. And so forth. Those who don't have family money often buy with bonuses from City jobs which can run into the tens and hundreds of thousands. I also know many friends who have had properties bought outright with family money, everything from £600k to £2m. Only 1/5 homes in London even have a mortgage! All of this supports crazy prices and makes it hard for "ordinary" people to compete. Even high earners will struggle to save enough to compete with being gifted hundreds of thousands or millions of pounds.

With London prices as they are, it's also hard to only have a 10% deposit as the 90% represents such a huge amount to borrow that your mortgage is just mega high, even if you can technically get one.

We had a similar deposit as FTBs & I don’t know anyone who bought in London without help (out of my peers).

“According to Zoopla, the average first-time buyer property price in London was around £425,000 with an average deposit of £144,500. In contrast to the property price, the average first-time buyer put down a deposit of 33.99%.”

All you need to know is that the "10 Year Yield" runs you mortgage rate, a lot of people still don"t understand this though it seems?

That is a lot of "Mum and Dad Money" that is just going to disappear round the U-bend.

Nah, London is full of "Ordinary People", in fact there are a lot more of them than people getting City bonuses, they were competing by sucking up loads of cheap debt, but now that that has gone the only way is down for London prices, so much inherited money that could have been invested somewhere in the stock/bond market is going to evaporate as the London mega bubble blows up.

Did you post the proof that lenders DON"T want bigger deposits though?

Don't need to. My husband also works in the city in finance.
Why have you resurrected this a month later? Get a life.

So your inside information says that they DON"T want bigger deposits? Is that what you are trying to articulate?

ODFOD @CrashyTime boring as ever, resurrecting a thread that died 3 weeks ago to promote your never changing agenda.

Not sure most people expected it to be this fast TBH, and judging by how much some people were borrowing many seem not to have understood what interest rate increases actually are.