Mortgage hike misery 😔

[Bexbiscuit]

Hello,

we met with our broker today to look at our options as our fixed rate is about to expire.

the cheapest we can get is 2k a month. 2 fucking K. I cried in the car on the way home.

this is an increase of about £710 per month. We will manage it but it’s going to change our lives significantly.

we both work on good jobs with a joint income of 100k but this increase, coupled with nursery fees, utility bills etc etc we are going to be very close to the wire

just how is this situation sustainable?

Yes that's right we all need to be grateful! Like F do we. We have tge highest mortgage rates in the western world. We need to get this government out. They have fd it up for all of us workers through fraud/theft and allowing companies to profteer causing the ridiculous inflation rates we have. Wake up!

@Bexbiscuit I feel your pain - my payment will go up like yours in Feb. I'm even thinking of raiding my pensions to reduce my mortgage.

I'm a widow so no partner to help and I'm self employed which just adds to the woe and risk as we enter this recession properly 😞.

I'm thinking the only option to keep costs similar to today may be to just go with an interest only for a couple of years at least then if the job market goes T-up, benefits would cover the mortgage ie no risk of losing the house. I believe its still OK to make capital payments off the mortgage if things are OK too.

Sending a hug.

This country has gone to the dogs under successive tory governments - it will take decades to dig us out 😞 First time I have properly thought about leaving the UK.

So sorry to see this. It’s the same with so many and it really isn’t fair. I know mortgages go up and down when you re mortgage however you don’t buy a house and expect this sort of hike.

We have had a similar thing happen (also in 40’s) . We have taken a 2 year mortgage and extended our years to the max we can just to reduce the monthly’s. This has been done temporarily and once things settle in a couple of years and we are due to re mortgage we will go back to where we are now.
Another option could be interest only for 2 years? Again these are not great practices especially if you are trying to pay it off however times are awful and I am looking at it as surviving for 2 years.
So interest only, extend years and after a couple of years you can go back to as you were without nursery fees to add?

I hope you manage to sort it. I know it does not help but I feel your pain.

Childcare I imagine. I don’t like in uk so no free hours here. At its height, we were paying 1800 a month and that was only for 2 full days for both and then 2 days of 6 hours for one (with DH and I working compressed hours and nana help 1 morning a week for one). We’ve now dropped to 1128 a month which is only 815-330 4 days a week for one child (DC1 starting school) and a day with nana (includes lunches though). But that’s still a lot. I’m returning almost full time. Still 2 years to go and will go up again next year as always does. Luckily we fixed at 1.29% when we bought so not due to renew until end of April 2027 by which time nursery fees will be done, but nursery fees are often like an additional mortgage

That's an horrendous hike and I feel for you. Mortgage brokers should always point out that base rates have historically been about 4% and so mortgage rates of 5% or 6% are normal. The low rates we've seen for the last few years are absolutely the exception.

Nursery fees aren't forever. The years I paid them, we scrapped holidays, didn't have nights out at all, and I kept the car until it was 12 years old and on its last legs.

It won't last forever. Soon the dcs will be at school and you'll be able to breathe again.

Don’t pay off £20k, you need savings for any unexpected stuff. Highly recommended you keep that in the bank but shop around for a good rate. As others say extend term or is interest only possibly

Agree, I would want to keep at least 10k of that as a nest egg.

I don’t remember people getting so angry at the Tories when their fixed rates were 1.5%, and their house prices were skyrocketing (which if they wanted to upsize was terrible, but big numbers good right?)

Even if OP is on a very high household income I can appreciate a £700 increase to £2k is a shock. But there is some good advice on this thread.

15 free hours after Easter and it increases to 30 free hours in autumn 24. This is the only thing giving me hope right now. What an awful situation with your mortgage increase

The 30 hours is for people
who have single wages under 100k, not joint wages.

Yep you're eligible OP, or will be next month if your 3 year old only just turned 3. It's not a perfect scheme but it could really help.

Many nurseries don’t accept the 30 hours so it doesn’t matter what you earn.

She may be eligible but that doesn’t mean that the nursery will accept 30 hours. The nursery and pre school that I used (two different places) only accept 15 hours.

That's true. Although the OPs wording makes it sound like they don't get it rather than can't use it, but you're right it's possible.

This is an excellent idea… helps you to manage your short term issue whilst still ensuring you have a back up pot for unexpected events. id do this.

But if banks put up interest rates LL will put up rents so renters will feel the pain too.

Thing is I’m not stupid. I knew that rates would only go one way as they’d been so low for a while and we’ve enjoyed that (as has everyone).

house prices have sky rocketed. We have a 3 bed end of terrace house. Nothing fancy. We bought the house for £550k. Mortgage of around £440 5 years ago. Now around the £340k mark.

it is going to initially be a shocker. But we are fortunate that house values have increased as rapidly as they have and that we’ve paid off the mortgage as much as we have.

taxes for us have increased. Wages have stagnated. Energy prices are high (and we can’t switch as there is only one electricity co here).

so we need to take a step back. Really look at our finances which we’ve never really done properly before. Because we’ve always just sailed through. But yes an increased mortgage is going to hit hard initially. We’ll get used to it.

household income is around £90k. We both work full time. Both kids in school (early years - reception and y1).

I think we naively thought we’d done the hard bit - two kids in nursery. At a point 2 years ago we had nursery payments which were more than the mortgage.

but we need to look at the best new mortgage option for us and then ride it through. And yes we’ll have to change our lifestyle a bit.

Ours has gone up £410, we were on 1.89% and now it’s 5.34% it’s just the reality (almost doubled my mortgage payment 🤢)I would never of chosen to pay that amount however here we are.

I do have sympathy for the OP as whilst we can ‘afford it’ that £400 is our savings/ extras/ holiday money/ emergency fund 🤷‍♀️ you know the reason we go to work and don’t sit on the dole just surviving each day. isn’t that the point of working, to have the nice extras and be comfortable. Take me to anyone who would ‘want’ to take that hit - few and far between.

And to those who say interest rates would never stay so low, fair enough that’s probably true. However many of us have always experienced these low rates- I’m 7 years in and my first 2 year mortgage was 2.7%, next 5 year deal 1.89%.

I don't think the comments about low interests rates in the past were meant unkindly. The fact is that many people have become used to very low interest rates, they borrowed accordingly, and again that isn't a criticism, but if interests rates rise due to factors beyond anyone's control then mortgages may well become very difficult or unaffordable for some. And for many people this is the first time they have had this happen. I think generally,many people have been used to low interest rates, being able to borrow, have easy loans ,been able to buy cheaper foods ,energy etc. Those days have ended for now.
I'm older, just for info, my mortgage is paid off, but i worked as a homeless officer for many years and saw cyclical mortgage repossessions when interest rates rose and the market for selling houses collapsed.

I don’t remember people getting so angry at the Tories when their fixed rates were 1.5%, and their house prices were skyrocketing (which if they wanted to upsize was terrible, but big numbers good right?)

Plenty of people with savings are rejoicing at the current interest rates as they're making thousands of pounds each month in interest. Swings and roundabouts.

We bought our dream/last house OH was 48 me 42 with two children then another one at 44. We extended our mortgage but then overpaid when we could. Got rid of it sooner than expected. So my advice is extend it for now. Looking at rental prices here we'd be paying 2k a month for a comparable home.

Nah, it was a twat thing to say and you're being far too kind.

The idea that paying increasingly high prices fuelled by low interest rates amounts to some kind of benefit to the people lumbered with that market is idiotic. There's nothing to be grateful for, if you're in that cohort.

This is what I want to know.
If you’re individually under 100k then you should get it. I did read many people don’t think it applies to them because they interpret the wording wrong.

I thought it was a household income of 100k, not each individual 🤷‍♀️.

safe to say our household income IS under 100k therefore never looked any further into it 😂