Page 8 | Mortgage hike misery 😔

Bexbiscuit · 2023-08-19T20:29:48+00:00

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?

saraclara · 19/08/2023 23:56

frippu · 19/08/2023 23:39

15 % interest rates were savage

Not this again. 15% of a smaller amount isn't different to a lower % of a higher amount.

Many many people lost their homes back then. Fortunately this time round, the government and lenders have worked together to ensure that those with mortgages are supported in various ways to avoid repossession.

Also many others were thrown into negative equity, so couldn't sell either. It was grim. I remember watching the news when the big hike happened, and my normally super chilled husband looking ashen-faced, turning to me and saying 'how will we manage?'

Mammajay · 19/08/2023 23:59

Do you have any parents or in-laws who could do a short term low interest loan for you??The rates will probably be less in two years time??

Solonge · 20/08/2023 00:00

Rentals are no better. Where I live, a pretty average market town £2,000 to £2,500 average rental for 4 bed house, and the rents increase way too often!

oakleaffy · 20/08/2023 00:01

saraclara · 19/08/2023 23:56

Many many people lost their homes back then. Fortunately this time round, the government and lenders have worked together to ensure that those with mortgages are supported in various ways to avoid repossession.

Also many others were thrown into negative equity, so couldn't sell either. It was grim. I remember watching the news when the big hike happened, and my normally super chilled husband looking ashen-faced, turning to me and saying 'how will we manage?'

Show quote history

Exactly...I remember people being suicidal, lots of trauma and tv programmes about it. - Houses were always expensive in real terms in 'Nicer' areas.
It wasn't 'Easy street' for those borrowers.
''Cheap borrowing''..It just couldn't last.

PurpleButterflyWings · 20/08/2023 00:05

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This message has been withdrawn at the poster's request

frippu · 20/08/2023 00:09

Many many people lost their homes back then. Fortunately this time round, the government and lenders have worked together to ensure that those with mortgages are supported in various ways to avoid repossession.

well there aren't any MIRAS now & the lack of repossession is more to do with the fact more people own outright & the majority are on fixes plus lending rules were tightened up.

saraclara · 20/08/2023 00:10

oakleaffy · 20/08/2023 00:01

Exactly...I remember people being suicidal, lots of trauma and tv programmes about it. - Houses were always expensive in real terms in 'Nicer' areas.
It wasn't 'Easy street' for those borrowers.
''Cheap borrowing''..It just couldn't last.

Show quote history

Yep

1992: Black day when interest rates rocketed to 15 per cent

The day began with interest rates at a sky-high 10 per cent. By lunchtime they had risen to 12 per cent, and in the afternoon they stood at 15 per cent.

https://www.expressandstar.com/news/cost-of-living/2022/09/16/black-day-interest-rates-rocketed-to-15-per-cent/

I mean, can you even imagine that day, as a mortgage holder, @frippu ? It's burned on my memory. Our children were 4 and 2 years old. We'd not long bought our forever house. And expected that we might lose it.

Of course now I'm worried for my kids and their own mortgages, and I'm trying to help them. But thanks goodness they're unlikely to lose their homes.

1992: Black day when interest rates rocketed to 15 per cent

The day began with interest rates at a sky-high 10 per cent. By lunchtime they had risen to 12 per cent, and in the afternoon they stood at 15 per cent.

https://www.expressandstar.com/news/cost-of-living/2022/09/16/black-day-interest-rates-rocketed-to-15-per-cent

frippu · 20/08/2023 00:15

@saraclara I'm not sure what bit of my post you found confusing? I've not questioned whether it was grim or not, that repossessions didn't happen.

I simply stated a mathematical fact 15% of 80k is less than 7% of 200k. How long were rates are 15% for?

frippu · 20/08/2023 00:19

1992: Black day when interest rates rocketed to 15 per cent

The day began with interest rates at a sky-high 10 per cent. By lunchtime they had risen to 12 per cent, and in the afternoon they stood at 15 per cent.

and when did they go back down to 10%?

beachbitch · 20/08/2023 00:20

ssd · 19/08/2023 22:31

Struggling on over 100k

Mn at its finest

Struggling on over 100k (and wanted a big house but now moaning about having to pay it back) MN at its finest

Tryingtokeepgoing · 20/08/2023 00:22

Timetochangegonzo · 19/08/2023 23:41

@Tryingtokeepgoing sorry but to add, the very rich like to imply it’s the average people that determine and maintain the inflation / interest rate but our wealth is so low compared to the top % it makes little difference

But wealth doesn’t drive inflation, as inflation is based on an average basket of goods bought by the average person. I’m not sure you understand how inflation is cause / measured. Clutch at as many straws as you like, but taxing the ‘rich’ won’t impact inflation or interest rates. Sub 2% rates were the exception. Rates at 5/6% are the long term norm.

I’m sorry that those who have taken out mortgages since 2008 didn’t realise that, but it really wouldn’t have taken much research to figure it out. And I don’t know about you, when it comes to borrowing 6 figure sums of money I’d do a little research. I mean, we could have leveraged to the max when rates dropped post 2008, but we discussed it and decided we didn’t have the appetite to borrow a seven figure sum just because we could. Just as well - my husband died at 47. And I certainly don’t regret being cautious 15 years ago…as at least I don’t have to worry now.

frippu · 20/08/2023 00:24

It's pointless me putting this as it's like banging one's head against a brick wall but I have hope!

In 1977 the base rate was 5 per cent, but in 1979, it shot up to 17 per cent on the back of the oil crisis which caused disruption to energy supplies and high inflation. Today the Bank of England voted to increase the rate from 4.25 per cent to 4.5 per cent.
Despite the base rate having risen to a lesser figure since December 2021 – from 0.1 per cent to 4.5 per cent now – the impact on our disposable income has been greater.
Real personal disposable income fell 2.5 per cent last year,” said Professor Millard, who worked at the Bank of England as a researcher for 26 years. “It is the largest fall since the 1950s, possibly before.

specialsauce · 20/08/2023 00:28

With your joint income of 100K - the £2Kper month mortgage still leaves you with £76000 per year - I think you'll manage.

beachbitch · 20/08/2023 00:29

frippu · 20/08/2023 00:24

It's pointless me putting this as it's like banging one's head against a brick wall but I have hope!

In 1977 the base rate was 5 per cent, but in 1979, it shot up to 17 per cent on the back of the oil crisis which caused disruption to energy supplies and high inflation. Today the Bank of England voted to increase the rate from 4.25 per cent to 4.5 per cent.
Despite the base rate having risen to a lesser figure since December 2021 – from 0.1 per cent to 4.5 per cent now – the impact on our disposable income has been greater.
Real personal disposable income fell 2.5 per cent last year,” said Professor Millard, who worked at the Bank of England as a researcher for 26 years. “It is the largest fall since the 1950s, possibly before.

This is all true however what is also true (but uncomfortable to admit for some) is that a lot of people bought houses they simply could not afford if rates went up. Rates fluctuate and to buy a bigger house than you need and then blame the government when they cannot afford an interest rate rise is slightly embarrassing in terms of financial literacy.

hot2trotter · 20/08/2023 00:32

Poor you on your over 100k income, in your 4 bedroom house with a shit kitchen!!!

hot2trotter · 20/08/2023 00:33

specialsauce · 20/08/2023 00:28

With your joint income of 100K - the £2Kper month mortgage still leaves you with £76000 per year - I think you'll manage.

Exactly!! MN at it's finest!

FunnysInLaJardin · 20/08/2023 00:34

@Bexbiscuit if your mortgage is £2k and your income is 100k you should be fine even with childcare.

Our income is 100k and mortgage is £2.5k. We dont have childcare costs anymore but still managed fine when we did

Al991 · 20/08/2023 00:47

I don’t mean to sound harsh but most people I know pay about £1200 in rent/mortgage but take home less than half what you do, myself included.

I totally appreciate the shock of having this price hike, but it is totally possible to live on what you will have left over - in fact most people would aspire to live on that. Rest assured that it is possible.

Having said this, I do understand how distressing it must be to have the change be so sudden.

FunnysInLaJardin · 20/08/2023 00:47

bit annoying though, all those who now say they have it worse than any generation before.

It simply isn't true. I lived though the late 80s recession and it was brutal. So many people lost their homes due to negative equity and the awful recession.

Very few people will lose their houses now.

Yes you will pay 7% rather than 2%. But come on, the low interest rates were never going to last.

Safe to say I have very little sympathy

fridaynight1 · 20/08/2023 01:04

Nope, sorry but a gross income of over 8K between you a month you are asking for sympathy because your mortgage payments will be 2K. I know you both have to pay tax and 8K is your gross pay but between you both what the hell are you spending your excess salary on?

There are people out there paying 2K a month on their mortgage earning a hell of a lot less than you do and managing ok.

Again .. what the hell are you spending your excess salary on?

saraclara · 20/08/2023 01:08

FunnysInLaJardin · 20/08/2023 00:47

bit annoying though, all those who now say they have it worse than any generation before.

It simply isn't true. I lived though the late 80s recession and it was brutal. So many people lost their homes due to negative equity and the awful recession.

Very few people will lose their houses now.

Yes you will pay 7% rather than 2%. But come on, the low interest rates were never going to last.

Safe to say I have very little sympathy

I lived through that and it was brutal. But that hasn't stopped me sympathising with younger people having today's problems.

These intergenerational spats do none of us any good. A lot of the boomer accusations that I have to endure are unfair. But fighting back with 'they don't know they're born' is equally unfair.

My kids definitely have it harder than I did, overall. Saving for the kind of deposit that they needed was far harder compared to my experience. And there's no way that either of my DDs can/should be SAHMs, as I was for their early years. They're in similar jobs, living in the same area, but they don't have the opportunities that I did.

So yes, I have sympathy for their generation. In return I'd like a bit less of the boomer stuff, mind.

Fooksticks · 20/08/2023 01:09

Can we not at least make this board a place where people can come and talk about their money concerns without all the arseholes piling on?

Ffs, some of you have absolutely no empathy. How do you know what the OP does with 'all her money'? She might be supporting a local charity, or her parents.

Just seriously stop being a fucking twat when someone is struggling because YOU don't deem their struggle worthy.

Thatladdo · 20/08/2023 01:11

fridaynight1 · 20/08/2023 01:04

Nope, sorry but a gross income of over 8K between you a month you are asking for sympathy because your mortgage payments will be 2K. I know you both have to pay tax and 8K is your gross pay but between you both what the hell are you spending your excess salary on?

There are people out there paying 2K a month on their mortgage earning a hell of a lot less than you do and managing ok.

Again .. what the hell are you spending your excess salary on?

Probably Pch german automobiles, lavish holidays, designer clothes and other credit commitments.

On a serious note, having a shit Kitchen while having the best part of 5k throught a perios of record low morgage interest rates disposable income is the op's fault.
Now the rates are back to a normal level many houses will be back on the marker, prices will drop and things will cool off a little to bring prices a little closer to the new reality.

fridaynight1 · 20/08/2023 01:11

Between us our income is £36K a year. We are managing to pay £1150 a month on our mortgage payment. We are overpaying and could pay less but we want to throw everything at our mortgage so that we can pay it off early.

£8k monthly income. 2k monthly mortgage payments. How the hell is your life a misery?

OP please reply.

Fooksticks · 20/08/2023 01:14

OP please reply

Would you come back to this shitshow if you were the OP 🙄