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?

@Ctu24agent

Im guessing I have move to pay off than you and our rates were lower than yours before a remortgage. (270k to pay off and current rate is 1.5%)

How did you get such a small a increase?

This is just an estimate from compare the market, hopefully breaker can get us a better deal come October/November.

@Ctu24agent
we are also not extending the term and reducing by 3 years as we have extended before and need to catch up. There is never a good time to catch up but we realise we need to do it or we never will and who knows if rates will stay this high!!

Yes as a single mum on much less than half, I stand by my statement. Yes I pay childcare and tax too.

FYI I've read the first couple of pages and all the OP comments. It's too many pages for me to cover all of them but I wanted to make sure this was said:

OP if you're 'just able to manage' (and I don't know what that means, just able to afford to live plus a basic holiday? Just able to feed yourselves on beans? etc) I would absolutely do that before extending the mortgage. If you aren't able to manage, of course go for it, but extending the term will mean paying many more thousands in interest so it's not just a matter of taking longer to pay the same amount.

(I realise some people know this but not everyone does, I thought it was worth saying!)

" but extending the term will mean paying many more thousands in interest so it's not just a matter of taking longer to pay the same amount."

Yes worth saying and good advice.

but extending the term will mean paying many more thousands in interest so it's not just a matter of taking longer to pay the same amount."

It is a matter of seeing long term mortgage as a form.of rental from the bank
So rather than sayng "i own my home" when you mean you have a mortgage,
You can see it as "i am paying the bank to live in my home" with a chance of being able to repay the loan by selling in 30 or 40 years time

You are renting the money from the bank as a mortgage debt owner, you are renting the property as a tenant, the mortgage debt can obviously leave you more exposed to interest rate risk where the rental on a property is more dictated by the economy and wages within the U.K where the interest rate risk is more dictated by global trends and economic actions of the other large economies. You could possibly pay a mortgage off before selling the house but that gets less likely the nearer your buying point is to peak house prices and peak low rates.

Well it's like anything, you have to prioritise. What might not make financial sense over your lifetime might make sense in the short term.

As a higher rate tax payer it would make financial sense for me to put more in my pension to reduce my taxable income, I'd have more money to show for it over my lifetime, but I need the money now I have a family and mortgage, so the distribution would be wrong, my pension contributions are sufficient, no point me throwing loads down into my pension for when I am 60+ when I have more obligations now. I could prioritise my mortgage and pay it off over a much shorter window to pay less interest, but at the cost of my youth, health and family life. You have to strike a balance, I accept that I am paying more interest in the long term to have more disposable income right now, when my children have flown the nest (or if my income continues to grow) I will re-evaluate.

So extending term is good advice, but yes people need to understand what that means.

Fair enough.

On an opt in basis from the early years facility aka they don’t have to offer the funded hrs