old house and mortgage rates - killing the budget

[lankylucy]

Buy an old house they said.......

So we have lived here for 3 years. Me, dh, ds ( teen) and dd aged 2. We decided to give ourselves a project, and believe me, this is a project. It's a big old victorian terrace but in need of a lot of work. We have done quite a bit, however the mortgage rate increase is starting to bit as we are no longer on a fixed.

We both work full time and have a decent income, but the mortgage stuff is starting to make us feel vulnerable.

JOINT INCOME £5848

Mortage £1518 who knows where this will end up :(
Childcare £750
Council tax £135
Water £40
Scottish power dual fuel £236
Car lease £385
Parent loan £135
Credit card payments £300
Kitchen finance £175
Food £400
3 mobile phones £72
Internet and TV package £60
Apple TV £4.99
Car fuel £280
Breakdown cover - £28
Pet insurance and health club for 2 cats - £36
Life insurance - £37
House insurance - £22
Car insurance - £38
Teen DS money for school lunch etc - £80
House repair savings - £200 – quite a bit to fix!
Days out/Christmas/birthdays etc - £100
Personal loan payment - £148
Clothes - £50

TOTAL - £5229.99
SURPLUS - £618

I know we are lucky to have a bit of surplus, but I am not sure how much of this will be needed for the mortgage. I also know that there are some non-essential areas that we can cut back on.

yesterday I was of the mindset that we needed to sell the house and buy something modern and more affordable, however that isn't what I really want to do.

Not really sure what I am asking. I think I just needed to vent a bit!

I think that we need to start building a bit of a buffer for the possible mortgage hike. What do you guys think?

OP you seem to have disappeared. As you yourself say, you don't really know why you're posting or what you're asking. You could do worse than study the above replies carefully and read between the lines of what the inferred message is; your lifestyle has relied on too much credit, insufficient financial discipline and a tendency to place responsibility for your decisions elsewhere when you can.
Correct these matters and your financial future will be secure.

I would also suggest paying your car insurance, house insurance and breakdown cover annually when you next renew, as this will save some money. Not masses, but you've got the money to pay it in one go, so paying monthly is just throwing money away.

Do you have any savings?

Can you deprioritise the debt over the repairs for the short term?

Get rid of those debts as quickly as you can and you'll feel a whole lot better.

Hi OP. The one thing that jumps out to me here is the token £100 for 'days out, Christmas etc'. For me, a single day out with the family would cost about this much, let alone covering Christmas or anything else! It would be better if you broke this down into all the different jobs it has to do and made a proper estimate of the cost. So...days out, Christmas, birthdays, holidays/trips...what about car repairs/MOT/Tax? Haircuts? Vets/pets fees? Yearly subscriptions? If you don't budget for these things, when they inevitably occur they will wipe out money you have set aside for other things (or worse, end up on a credit card).

I always get my breakdown cover in with my insurance. It's one of the options on the comparison sites, and invariably works out cheaper than getting them both separately.

Have you tried looking on confused for breakdown cover? My 8 year old car is less than £30 per year for national recovery/home start/onward travel. Broke down earlier this year and they were with me in 40 minutes. So many cheaper options than going with AA/RAC!

Some of your outgoings are similar to ours but I think there are a few ways savings you could make which might make you feel a bit better:

Eg breakdown cover - we pay 60 per year (£5 per month)
Cat insurance x 2 £140 per year (£15 per month)

Not much but it all adds up.

I would then use your surplus to clear debt ASAP (no judgement- but you do have a lot).

We were in a similar position (but smaller house needing a lot of work) and what we did in the end was fix the mortgage for five years but increased the borrowing to include the house repairs so we had the security.

I'm in a similar position with mortgage rates increasing and buying an old house, childcare etc.

Things that stick out for me, loan payments/finance/car lease - these need to go. Can you get rid of car lease and buy a cheaper one, then slowly upgrade as and when.

Could you pay car insurance annually, may save a bit.

Sim only phone deals

Cat insurance - if you put away £25 a month you'd build your own vets pot.
I have horses, dogs, cats and none are insured. I'd only insure my top competition horses not my 'pets'.

Have a sort out, anything you could sell