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?

2k isn't too bad - my sibling has just bought a flat & that's her mortgage. Cheaper then her rent! It's your nursery fees, are you using tax free childcare. You must have some good equity, could you move to a part & part mortgage

@ConstitutionHill

@Helpfulperson123 is right though.

As a FTB DH and I were stress tested up to 5% when we got our 1.25% mortgage 2 years ago.

We are out of our fixed in December and have secured a rate of 5.56%

£300 more a month....but we didn't overstretch ourselves in the first place (SE by the way)

We could have gone £80-90k more than we did, but we didn't. £70k between the 2 of us.

Choices are made.

Not wanting to add to the pain, but people are being optimistic when saying this will be just for a couple years. The 2% rate was a privilege enjoyed for many years, when before that it was the norm for 10% interest rates, or thereabouts, for a long time. Great if this is just temporary, but people shouldn’t count on it.

I don't disagree, and we made sure we could scrape by even if things went up to 10% because I am a total pessimist (I also always wanted to ensure we could afford our home on one salary)

But doesn't mean we cant be sympathetic to the op. It's still a blow to find that you are going to have to budget very carefully

I'm so genuinely sorry for you @Bexbiscuit Both my (adult) DC have mortgages that they got at fixed rates. I think maybe 2% to 2.5% ...some 2 to 2.5 years ago. One got a 7 year deal, one got a 5 year one... So they're quite safe for quite a while.

We are all praying that the mortgage rates come down before their fixed rate mortgages end. They've got like £150,000 and £170,000 mortgages, and I think they pay about £525 to £550 a month ... but it would go up to over £1000 if there was no fixed rate. Not as bad as some, but still a harsh hike!

They could weather it - but like you, they'd have to drop a few things and won't be making any savings. Right now they're both on very good incomes and are overpaying on the mortgage to try and get a buffer, and then they can maybe renegotiate the mortgage when their deals are over. (Take a lesser amount out - as they will have paid quite a lot off.)

I have no advice I'm really sorry, but I do have lots of sympathy. We are quite fortunate that we have no mortgage now. But we did have a similar thing going on a couple of decades ago - when a similar thing happened with rising mortgage rates, and I know it's really, really tough ... We were on the bones of our arse, and living on basic food for a couple of years, and didn't have a holiday for 3 years at one point. Not even in the UK.

I hope things get better for you soon. And everyone else who is suffering like you.

Why? Why were lower % rates a "joke" ?

They certainly are an anomaly in terms of historic rates. And they massively inflated house prices.

Extend the term. We deliberately switched to interest only for half our mortgage when rates were low (was in two separate parts) - the interest only part was lower in our case and we concentrated on paying off the repayment part which was on a higher rate. When rates went up we had got ourselves into a position by then that we could pay off our mortgage entirely. I think we had about 13 years left on the term. Do want you need to do to buy yourselves some time now, your situation will change in future and you can adjust accordingly then.

That’s the problem though - it’s rough for a lot of people, and if you’re in the camp of ‘can but don’t want to’ you’re a lot better off than those who ‘can’t but have to’.

It’s a shit time, but you’ll be able to manage it with less luxuries.

That's so helpful 🥺

7-8% seems to be the top end of predictions, but the high rates are here until at least the end of the decade.
Anyone pretending otherwise is kidding themselves

I do agree that people should not have maxed themselves, but even so, the banks and building societies have to take some of the blame for this! And also, not everyone suffering now did actually max themselves out! Not everyone bought a massive house with 3 or 4 extra bedrooms!

Some people suffering and struggling bought just what they needed, and paid a reasonable price that was in their budget. Bit rude to say 'ha! serves yourself right for having the temerity to get a 4 bed house when you only have 2 kids!' (or a 3 bed house when you only have 1 kid!)

You earn £100k a month between you and can't afford £2k a month on your mortgage? What luxuries are you spending your money on? Just cut those. I'm guessing holidays, hair, nails, gym memberships. There you go. Ours has gone up from £600 to £1k a month and we're on £50k income between us. Haven't moaned because you cut your cloth don't you?

It's not like you're not going to be able to eat is it?

Not to mention the £20,000 in savings.

I've said on here before it's a huge mindshift to get your head around paying so much just on debt, many can afford it but who wants to lose disposable income to service debt.

It's definitely not sustainable for houses to keep going up but so many think it's a good thing.

@babbscrabbs where has the OP said that one of them earns more than £100k? You have decided that they do because they don’t get 30 free hours. Well I’ve got news for you, not all nursery’s and preschools accept 30 free hours. Some of them only accept 15 hours. The day nursery and pre school (two different places) that my DC’s went to only accepted 15 hours.

Agree, many first time buyers were paying almost 6% as recently as 10 years ago (if they only had a 5% deposit) we were them stress tested for a further 3% so was a struggle to get a mortgage on our incomes. We couldn’t believe the drop in rates when came to renew but never assumed would last forever

What is the reason you can't access the 30 hours childcare? Do you not qualify or is it a lack of supply?

If you have 4 bedrooms, can you let one out to a lodger? International students are popular with some people I know as they are here for chunks of time but their rent covers the bills.

In all fairness, £2k a month mortgage payment on a joint income of £100k isn’t a walk in the park. Our joint income is £50k a month, in the North, and we pay £1k a month, which on top of high utility bills and pricier grocery bills, isn’t as easy as people might think.

😆 Like you even know me !!!

I'm just a normal person trying to get through life as best I can. not pissing money up the wall so don't make assumptions about me

This is a huge hike - ignore the silly comments. Most people would be horrified. Paying interest is literally money for nothing.

I will be going on to a new mortgage rate in three years. I am dreading the hit.

out if interest how much do you owe??

The 30h isn't done on combined income, you lose the second 15 if one parent earns over 100k.

So either you should be getting it (there you go thats £220 or so right there off the nursery bill) or one of you actually earns over 100k in which case - you'll survive.

It’s not the government though, it’s all of us, sorry why shouldn’t parents caring for their children at home get subsidies too? I say that as a working parent, yes I pay tax amd childcare costs. Most working parents are eligible for tax free childcare plus funded hours so already get subsidies far in excess of the tax they pay

Dibblydooddahdah yup and so loads of people use two settings to access it all.