Worried our mortgage will be unaffordable when fixed rate ends

[SorryNotSorry6]

..and I don’t know what we should do about it. We’re currently on a 3.9% fix which costs us £2140 per month so it’s already quite a big mortgage by a lot of people’s standards. But it is manageable for us. Our fix runs until August 2027 but I just did an online calculator thing and the best rate it offered us came to £2450 per month 😮 so an increase of £300. I’ve read that there will be up to 4 more increases in interest rates before then and realised that if rates go up to 6% then we will be looking at £2800 a month which we really can’t afford. I actually feel quite sick. We’ve got 34 years on the mortgage already so don’t think we can increase this to reduce payments. Sorry to sound stupid but what do people do in this situation?! The only answer is to move surely?

We don’t have huge savings given our income, we bought a larger car when our youngest was born and then moving house wiped out the rest. I think we have around 4-5k. I’m now prepared to be told I don’t know I’m born because that’s a fortune etc etc but then simultaneously I’m sure I’ll also be told that this shows how awful we are with money and we should have at least 50k in the bank! Basically we have a small safety net but not loads.

We have used most of our income to build equity, we only bought our first house in 2018 (with no help from parents or inheritance before someone assumes, neither of our parents had that sort of money) so that is where our money has mainly gone over the years. As well as three maternity leaves!

Sorry to hear this OP. I think your best bet is a good mortgage broker and advisor. There may be options available.

Well that is 4 or 5k to keep if needed for boiler etc. So .....better than nothing.

Trying to overpay even £100 a month will pay dividends on your mortgage because getting it below 60% ltv should get a better rate. I found even something as simple as stopping buying coffee out helped, I have a thermos

Don’t beat yourself up, OP. You are at an extraordinarily expensive time of life. I think it’s normal to be extended when your family is growing before you have time to build up equity and savings. Some of the childcare expenses will go down in a few years, and you can catch up then. Just keep your head above water now, and trust you will make good choices when you have a bit of breathing room.

Awww OP I feel for you and I understand why you are feeling anxious. I think there are lots in a very similar situation, where on paper you earn a decent amount but with rising intrest rates and rising costs of living its difficult and there isn't much money, if any money left at the end of the month.

I don't think moving is the solution at the moment, as this will cost you alot. I would personally be saving as much as possible and either saving this to create a bigger safety net, or to overpay on your mortgage, to help when intrest rates go up next summer.

We don't know what intrest rates are going to be next summer and they may very well not be as bad as you think. Whilst there is a pay freeze ATM this may change and you may be able to up your hours, get a pay rise or get a promotion. Childcare fees will also go down in the future once your youngest is at school.

I would talk to a mortgage broker around 6 months prior to mortgage to try and lock in a rate.

Sorry you are going through this and best of luck. I'm sure it will work out for you and you will ride this wave.

Thank you for all the tips and advice. I am grateful we are not in dire straits but as a pp said if we are in this position then a lot of others must be as well. I appreciate most people have been really kind on this thread.

I replied to a poster who said £100k is nothing nowadays and difficult to live on. Your current standard of living seems unaffordable to you if a slight mortgage increase is worrying you. There’s probably lots of ways for you to cut back.