Can you afford your mortgage at 6%? If not, what will you do?

[Redpathos]

I have a mortgage fixed at 1.04% ending end of next year. At 6%, it will add around £600 to my monthly payment. 😥i dont think i will have to sell or downsize, provided rises in other cost of living calm down a little.
Affordability is supposed to have been stress tested at multiple times of the rate applied, but i guess nobody predicts that food, fuel, energy are all rising at the same time.

Ours is 0.94% and ends next Autumn. We shortened the term so may have to extend it again.

We still have 4.5 years left so I'm hoping that the situation will be better then. We could afford the extra £400 on our mortgage, but together with all the other increases we would have to cut pretty much all extras. I hope earnings will be better by then, otherwise we will just have to get used to not having much.

We are out of a fixed as we were going to move so didn't want to be locked in With the pending rates increase, this seems unlikely now as can't afford a step up now. So I have no idea what to do.. this is a crazy situation for all

tbh I'm less worried about affording the rise but the knock on effect of all that additional money servicing more debt. It's surely going to hit jobs.

We’ve recently fixed for 5 years so don’t need to worry right now, but if rates were 6% in 5 years’ time our mortgage would be just over £3.1k per month!

On paper we can afford it, it would mean massive cut backs in other areas, which in turn (if replicated across the UK) would have a devastating effect on the economy as we all worked to pay our mortgage and not much else.

In the meantime we’ll be doing some serious belt tightening over the next 5 years to try to get it paid off sooner - which will also (again, if replicated) will affect all parts of the economy where we currently spend our spare money.

We need to remortgage in 4 years to pay off help to buy and very, very worried about it!

I've just put it into the L&C rates rise calculator and I can't get my head around why a 6% interest rate would almost double my mortgage repayment which is currently at 1.5%

Yes, I started off 10yrs ago with my mortgage at around 3.69% and stress tested above that. I've obviously paid of quite a lot and my mortgage fixed deal ends in 2 yrs so I know I can absorb up to 11%

Are you working this out based on what you'll owe end of next year?

Our fixed rate ends in 2 years. Currently 1.69%

I've just done a quick calculation and by that time we'll have paid off c. £29,000.

So based on current loan minus £29k at 6% for mortgage term minus 2 years we can afford it. It will cost £100 more than we pay now.

We can also afford 8% and 10% but our quality of life will reduce.

I started a new job this month so I'm waiting for my payslip to come through and I intend to start overpaying a bit more, the amount will be guided by how much my raise is.

I also have a chunk of money sitting in NS&I and I am debating whether to leave it there or chuck it at the mortgage. I only ever win £25 but there's an uncharacteristically optimistic and hopeful part of me which is reluctant to cash it in.

My SVR after the fix is 3.25 on top of the base rate so 9.25% this would be a ridiculous rise for us. I couldn't even say how much our monthly payment would rise to? At least an extra £1000. Our plan is to pay as much as we can off the balance at the end of the fix before we remortgage.

If its a repayment mortgage its only increasing the interest part not the repayment part.

My mortgage is small so I could afford it but I would hate to be throwing extra money at interest. A quick look at a mortgage calculator shows that at 6% my repayments would go from 515 to 748. I fixed for 5 years in May so hopefully things will be better once that's up. I'm going to start overpaying in the meantime just in case things don't improve in the next 5 years.

So pleased we fixed last month. Current rate ends in November so I nagged DH to do it then. Now fixed at 3% for 5 years whioch is higher but manageable

Rates have been ridiculously low for years, in hindsight we should all have taken out the longest fix we could find as soon as it started looking shakey.

When we bought many years ago it was on the basis we could afford it at 8%, estate agent thought we were bonkers and she was right really, we could have bought much larger house and would have made huge gains in value. But I've always been cautious, it's a balance between risk and reward and I'd rather be avle to sleep.

Yes. It was nearly 6% when we took it out.

Both me and himself recieved enough from deceased relatives to pay our mortgage off. We were told that was the wrong thing to do and offered all sorts of advice but I'm glad we stuck to plan "A". Means we always have a roof over our heads and neither of us are stuck in a job we hate. Result !.

I would leave your money in NS&I as you have a low rate now anyway so not saving much more. You can always at the end of your current deal, then take that money out and pay off a lump sum before taking a new deal. You will avoid any fees too if the amount is more than your allowed to pay in a year. In those years you may still win some money..who knows maybe the big one!

@TheBeesKnee oops the comment above from me was for you

Yes, that's basically the crux of it, interest saved Vs potential win 😬

I can’t afford it now. Last year I was earning 4 times my current salary, due to health I’m on minimum wage, not full time. No benefits available (adult children)

Fix ends in Jan, payments going from £500 to £675.

I can top up for a short time but it’ll wipe my savings, I need to try and sell which will now be very difficult.

Fixed rate ends the end of next year. If interest rates are 6%, our new repayment will be £2145, just under £700 more per month.

We can just about swallow that, as DC will no longer be at nursery, but that money we wanted to use for home improvements and to improve our lifestyles again after years of paying childcare.

That money would have went back in to the economy, ie builders for a loft conversion, new carpets, furniture etc, now it will go back to the bank purely in interest.

Ours end in July so seriously considering paying for early switch which will cost us £1100 to go from 2.58% to approx 4.1% which increases the repayments by approx £80 a month which is a struggle tbh but feels worth it to prevent any further rise.

For all those considering to early exit and change deal, you can by all means just apply and decide later, right? The rate offered is usually valid for 6 months, right? That was the case when i bought my house

My mortgage runs out in feb, have to stay with same lender as money circumstances have changed, went from paying £662 to the new payment fixed £989, there was pounds difference in 2/3/5/10 year rates.

have to magically find £332 extra a month 😓
£50 a month I could scrape together but this is astronomical amount of money

we are checking it daily in hope we can lock in a cheaper rate that was 5.8 fixed 2yr

Nationwide forgot to mention