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?

We have a higher income but a higher mortgage and are a year behind you
Ie. 0 and 2 i hear you

Until oldest is in school...
We are dropping pension contributions to bare minumum.
We have agreed no clothes unless essential for us and all clothes 2nd hand and then resold for the kids.
We have also shifted to veg meals 3 x pw using pulses and dropped all "fancy foods" (no fresh berries, no nice fish, no steaks , no nice cheeses etc)
We also wont go on hols for the foreseeable future despite me googling "ikos discount deals" on a weekly basis

You mentioned 100k joint you should still get 30 hours for the 3 yo if you both work at least 16 hours pw

Doesn't everyone?

I decided to break up with my ex at the height of the boom, so instead of being able to clear out cheap mortgage between us this may just gone, instead I bought him out at a 40% increase in properly value, and increase in mortgage rates from 1.9% to 3.8%! And paying it on my own now! Ha!

so yeah, I feel you, it just seems like madness how things can suddenly just inflate like that…..! I’m just glad I never mortgaged up to the hilt when things were cheap, else I’d be screwed now.

Sorry if I missed this, but why cant you get the free hours? Theres no income threshold

3.8%! FTBers for the next decade can only dream of such rates.

I spent my entire 3 month renewal window checking the rate every single day and jumped on it the moment it went down for a few days. Gotta do the homework.

It’s still a big jump, and I was over a barrel with the price I ended up having to pay to buy my own house from my ex, so look at it how you want but I’m far worse off financially after this. Mortgage would have been paid off by now if I’d stayed with him, and we’d only bought the house 7 years prior. So yeah, not the best for me really!

I’ve just done a mortgage calculation and if we re mortgaged today ours would go from 1100 to 1450 rounded for ease. So a 700 increase from £1300 to £2k seems like a bad deal. Try London and country - they were great when we remortgaged last summer. We went from £850 to £1100 but the increase was partly due to us shortening the term by 2 years and partly due to interest increases. Our dc are all in secondary so we don’t have childcare costs anymore (although uni costs scare me).

Someone at the wind up?

Yes there is. Both parents need to be on at least 16 hrs per week at NMW, and neither earning more than £100k adjusted net income per annum.

I stand corrected. A little baffled then at the freaking out at a mortgage of £2K a month.

Didn`t the rule used to be that you should always be able to pay your mortgage comfortably at 10% mortgage rates or something?

We are in the North so the figures are lower but we are also being hit with a huge jump at the start of next year and it's gonna hurt!
Our 5 year fix has us paying £660, once that ends we could choose a 2yr tracker at 900ish or a 2yr fix at 950! There are cheaper, longer fixes but I don't want to commit to 5 or 10 years at these rates, I'm leaning towards the tracker in the hope rates will have peaked by the end of this year and possibly even start fall slightly.

Might have been mentioned but free childcare hours are changing from next September should everything go to plan and free 30 hours should be at 2 years old instead of 3 years

Rates might peak and fall slightly but the slightest inflationary shock from the much changed geopolitical landscape and they will go straight back up again, and I don`t think there is any way they are going back to the lows we have seen since 2008, central bank policy has obviously changed and the various central banks are no longer co-ordinating to keep rates low. I would take the cheaper longer fix over a tracker any day in this new volatile environment.

Our fixed term ends at the end of this month as well and our mortgage advisor suggested extending the term a couple of years to bring the monthly payments more in line with what we have been paying. We spoke to the mortgage company yesterday and they said it was no problem, they have signed up to this charter. Hopefully in 2 years time, the rates will be a bit lower and we can bring the term back to where it should be.

I don’t. Know if this is help ful or not? I am 66 and when we moved into our house 38 years ago interest rates were 14-5% !!! We had 3 children 6, 4 and 1 . For the first 6 months i remember crying as we only has £20 a month spare after everything was paid off, all the bills food etc. we got through ,it was very very tight. We bought the house for £38,000. A 4 bedroom detached house. It’s just been valued at £500,000! Unbelievable! So I really understand your tears that’s a massive hike and will make your lives tight. All I want to do is help you see into the future and know it might not be forever. Good luck and my thoughts are with you.
🥰

I am not sure why 2k out of 8k a month is such a problem. It seems a very luxurious amount of income even with childcare factored but maybe I am missing something?

Er, tax, national insurance and pension contributions.

The OPs income will probably be about £6k pm at most, not £8k.

After the £2k mortgage payment and nursery fees for two preschoolers they will likely be down to about £2k pm for all bills, food, travel/car costs and everything else.

I'm sure they will manage but the OP is quite rightly shocked by a big drop in their disposable income that will take some adjusting to.

Why don’t you get a tracker which doesn’t tie you in for now, until rates drop?

Also…I’m a single mum of 3 on about £50k and £1k/month mortgage. Albeit I don’t have nursery fees but I support a household on one salary - the ONLY thing I get to pay less for is council tax (25% reduction). I manage quite happily on this and have money left for holidays etc.

Aside from nursery fees, there must be other areas where you could save. Also how about a nanny or nanny share instead of the nursery which could work out cheaper.

Op has spare room for a lodger and has 20k savings to help get them thru next few years of childcare costs. Op will be ok. It s not nice but they will manage.

I see that the squabbling amongst generations has begun, it’s a handy tool to keep the nation divided. People can think they are good with money and some do have a knack, I certainly do but overall no one chooses to be born in a specific era and we are all victims to the financial shenanigans that go on at a macroeconomic level that we have no influence over. I am actually embarrassed by some of my friends opinions on money and wealth with their back in my day attitudes. I am older Gen X as are most of my friends.

Pay off as much as you can from savings - if your savings rate is less than your mortgage rate then it's dead money and actually losing value. See whether you can go interest-only for a short period. Move to a smaller house suitable for your family and budget. It's rubbish but we have to cut our cloth, and I'm very grateful we've had 20-odd years of ridiculously low interest rates, it's just a shame we are going back to normal now.