Mortgage rate rise - what a nightmare

[sallynew]

hi.

I am fuming. Our fixed term is about to end and the best we can get is a deal that will add £450 onto our current payment of £1100. Not quite sure how we are going to do this.

At the moment after mortgage, bill, food and fuel we are left with about £1600. This will now be £1150. It just feels so very unfair

To those that are saying interest rates are likely to go down in 18 months, where are you seeing this because many of these 'experts' are saying the exact opposite and the days of low interest rates are over.

While the cost of living increases mean we all have less at the end of each month, having a sudden increase in the costs and being able to absorb that cost without sleepless nights wondering where you can cut other bills by eating cheaply and not hearing your home is a privileged position. That doesn’t mean it feels comfortable but you are in a better position than many.

maybe look at extending the term if you want to reduce the payments.

You still have a very comfortable amount left after all your bills. Yes it's not ideal, but do a short fix and pray there's a lower interest rate when it ends.

It's terrible op, I feel for you. Our fixed term was due to be up in Sept 2023 but we paid around €600 early repayment fee to break out last March. I hope you find reasonable rates, it is tough everywhere.

Lucky you've got that £1,150 a month buffer after all the essentials are covered then, isn't it?

That's a lot of headroom before you start having to cut back on essentials.

Some families barely have that to live on before essentials.

Sorry but it’s not really unfair. It’s just life. As other have said, interest rates were too low for far too long.

I have sympathy.

Our energy rates have yet to increase, they go up in June. We are already paying £300 a month.

Our current 0.99% mortgage of £750 a month is going up to £980 and that's with extending the term 6 years (max allowed)

Our food and grocery bills are massive. £800 a month for four people plus two cats.

Diesel can be £500 a month.

Council tax has gone up again, now £220 a month.

Insurances are around £150 a month, also just shot up.

No childcare bar in holidays which is about £250 a week, we prob pay 6 a year so call it £125 a month

Added to which saving money for MOT, car or house repairs , keeping kids in one club a month each, annual uniform, school trips etc, presents, celebrations etc.

Even with decent disposable income it's a lot of increases to fund in a short time. And it's a lot of money.

I get it OP, we're all in the same boat. Money is not going as far due to wages stagnating and everything going up.

BUT interest rates being so low? Well, they were only going to go one way weren't they? It can't be a surprise? We bought 25 years ago and fixed at 7%, paying £500 a month. When rates were their lowest that mortgage would have been £320 a month. Low interest rates have made buying property artificially affordable.

I don't think it is unfair. With that much available money after set outgoings you should have a good amount of savings. If you had planned ahead you could have paid out of your deal early and fixed at a much lower cost as soon as it was obvious that rates were going to rise. We were due to renew our deal now but paid to get out early and fixed again for 5 years before things got too bad. 🤷‍♀️

Well if you have over a grand left a month I say you are doing far better than many other

Am quite partial to a quiche myself actually.

Having absorbed the cost of living increases in your mortgage, bills, food and fuel, you still have £1150 left over every month…..

Sorry OP, but that’s an incredibly fortunate position to be in.

It’s not a race to the bottom - we’re in different financial positions. But with more than a grand of disposable income every month your whole family can enjoy “little luxuries” without worrying about paying bills.

Bearing in mind the country is in the midst of a cost of living crisis, to be in such a fortunate position does mean you’re very privileged. And good for you - no one should have to struggle. But you are a very, very long way from “racing to the bottom”.

We paid just over £300k and sold last year for nearer £700k. Probably a lot of that was thanks to low interest rates. But we also managed to buy somewhere which has become more desirable over time.

That’s the property market over the last 15yrs- like I said I’d rather pay higher interests on much cheaper homes. Current generation is screwed across the board!

I do feel sorry for young people. I am not sure if I would have been able to buy a house if I was young now.

I can’t believe how mean people are being on this thread. You know this is how the very rich want normal people to behave to each other, focus on blaming the individual rather than look at the structural issues which are reducing our quality of life. With that mortgage increase on top of huge increases in fuel and food costs, the OP has experienced a significant decrease in her quality of life. This is happening to millions and millions of people across the country. Everyone’s allowed to be pissed off about it.

We bought our house for 160k 20 years ago. It's now worth 950k. That seems insane.

The BoE want you to feel poorer. Their top economist literally just went on a podcast and blamed rising prices on people not accepting they are now worse off than before.

It's all our fault, apparently 😒

If you have £1150 left after your mortgage, bills, fuel and food it will be ok. That's £265 a week for extras. It may be less than you currently have but it has been incredibly cheap to borrow money recently.

Peoples standards are on the floor 1k a month disposable is fuck all in today's world.

@Fallin I agree but this thread was always going to go this way. So many here would be much happier if everyone was just scraping by so £1150 is apparently a fortune.

In the world of finance, if you work in certain areas of it, it is widely thought it will go up some more before it comes down.

So I'm about to fix for two years at 4.48% should I be doing 5 years at 3.88%

Broker advised the first as he thinks rates will drop below 3.5% in two years

We did the five year at the lower rate. Hopefully we'll have a competent government, and an open conversation about the savaging Brexit is giving our economy by then.

It is also likely in the brokers interest for you to take out 2 year mortgage and come back to renew rather than take out lower rate now.

@ScandiNoirNuit wouldn't that be misselling?