How is everyone coping with mortgage rates increasing?!

[Undecided94]

This might be a thread for the money matters section but hopefully, it makes equal sense here.

Early 30s and looking to buy a house with land. The idea is that we will have more space for a home gym, home office and somewhere to keep my horse. I have found a house, it’s been on the market for 5 months with no offers so I’m tempted to make a cheeky offer.

That said, even if they accept the offer, mortgage would be around £2k per month! Add bills on top and it’s feeling scary. Is this normal? Our friends seem to have borrowed much more and earn much less but their interest rates are half! I’m looking at over 5%.

There is a cost either way, if we stay where we are, I continue to pay the monthly fees, which are less than the jump to the house with land but I’d have the convenience of having my horse on my own land.

The cost of living seems to have just shot up. It’s not just the mortgage rates. It’s absolutely everything! How are we all coping? Honest opinions welcome 😊

So if things stay around where they are, ours will go up in may by about £500 a month. It’s fine, we earn well, but nobody wants to pay extra in interest of course. Few things that we are doing:

1. Overpaying the mortgage now to get a bit used to the bigger sum of money coming out. Not by £500 but a couple of hundred. Will make the leap in spring not so big.

2. Clearing down all out debt. I’ve just got a few grand to go now and we’ll then be completely debt free (minus the mortgage of course). The payments for credit cards and the car loan were costing me about £1k per month, so with those gone now that is a lot of money to absorb the mortgage increase (and some).

3. Will be booking a new deal asap this month. If things improve then great, if they don’t then we’ll have around the 5% mark. We will both have pay rises next April which should come to about £400 after tax a month. This is another thing to bear in mind if looking at a five year fix. What feels expensive in year one will be pennies in year five. If inflation carries on as it is, your capital will keep getting cheaper and cheaper to service. In our example, we will be getting after tax about £1600 a month more in five years time against an increase that is fixed at £500 ish. It won’t be a big deal.

4. I’ve been saving each month with the goal of paying the council tax in one hit come April. This will put a few hundred quid a month back in my pocket, and again negate the monthly rise. Not saving any money of course doing this, but will mean the monthly cash flow unaffected by increase in payments.

In short getting myself financially lean for next year. Nothing I can do - if you rent you’ll just get your landlord putting the rent up to cover his increased mortgage costs. I’d far rather have a mortgage and be working towards a point where I owe nobody anything for the roof over my head.

Not many people have a horse, a home gym and a home office, so not many people need to spend £2k a month on a mortgage. There are cheaper houses.

Of course it's a lot of money, you're looking at buying a huge house with land.
It's a lot now, but could you afford it if rates go up again? Sounds like a niche property to try and sell in the future too.

Post covid we made the plunge to buy house with land - I also have horses!

Our mortgage is eye watering, in part because we kept a relatively short term.
We managed to recently remortgage earlier this year for 3.8%, but if we couldn't get a decent rate we would have had options on duration to make it affordable.

My suggestion is to not over extend, ie dont do it if you can only just afford it on a 30yr term. If mortgage rates climb further you'll be stuck.

How much is 2k in relation to net earnings? 60 % 25 % ? If 50% of earnings then do not do it .
And your friends mortgages will go up next year or when current rate deal expires

Also, dont under estimate the cost of having your horse(s) at home.
The maintenance is endless, easier if you have lots of acres.
This weekend has been all about muck spreading, seeding and spiking the summer fields, plus replacing rotten posts. Lots of time and lots of money!

We bought on much lower salaries and borrowed much less than we could as we are very risk averse. However, we are now stuck in our (lovely) house as we cannot afford to move to a bigger. I am very grateful we can afford the bigger payments but I am thinking it will probably mean we stick at 2 children as we won’t be able to get a bigger house.

I have a lot of friends who borrowed the max they could and have a lot of outgoings- I wonder how they will manage. Debt I suppose.

It’s around 30% which feels slightly insane because bills are not exactly cheap. We don’t have a mortgage so 2k feels like an enormous leap!

Rent is driven by wages and demand not mortgage costs, immigration is reversing and wages have gone nowhere for most people for 20+ years, landlords trying that are going to have empty properties and be paying double bubble council tax, you may eventually own "something" but if you bought recently the debt costs involved in getting to that point could be brutal over a number of years.

Earlier this year we moved from a fixed 5 year mortgage on 1% interest to 4% and now we need to upsize, but we’re very limited to a very small area due to school catchment. We’re now having to increase our mortgage by £130k as well as interest rates now hitting 5% - it doesn’t sound a lot, but the increase is an extra £1k a month and that’s for a basic 4 bed house. I feel sick at the thought of paying £2k a month + bills. We also have 2 kids in nursery and we could have actually borrowed upto £600k which is frightening

"I have a lot of friends who borrowed the max they could and have a lot of outgoings- I wonder how they will manage. Debt I suppose."

Absolutely horrible way to live.

It’s 12 acres and has new agri fencing but this is food for thought as I haven’t properly considered the additional costs of the land. It just seems like a no brainer but I should probably sit down and put pen to paper and have ball park figures for everything.

Could you house other peoples horses and charge them and let the home gym out to people by the hour when you’re working to generate some income?

And how much will bills and maintenance be? Council tax water feed insurances energy cuttung the grass on the land etcetc ? Horse box? Horse gear? Vet fees? I do not think you will have much leeway . Up to you but Is there something cheaper?

30% is generally seen as very affordable.
I've never "only" paid 30% of net income towards our mortgage.

Even more so, of course when the 70% you'll have left after paying the mortgage is going to be a larger amount than most people bring home.

Many people borrowed more than that, 1% was never ever going to be a realistic long term rate, I am really surprised that the central banks managed to suppress interest rates for as long as they did TBH, they can"t control physical disruption to oil supplies though, and if Japan starts hiking mortgage rates will go even higher.

https://www.cnbc.com/2026/09/18/japan-raises-rates-30-year-high-yen-jgb.html?msockid=3621718953066d431f55666152d86c95

It’s bonkers isn’t it?! We could move into a slightly bigger house but there isn’t much in it and if I’m spending all this money on moving, I want to ensure I don’t have to do it all over again!

Managing land is mega expensive and mega time consuming. Go rent a field for a few months and find out

Buy something cheaper with less land, keep the horse elsewhere. In an entirely different scenario, I was very pleased not to be maxed out when dh lost his job. His earning power did not recover either. It's always good to have some breathing space.

We got hit when interest rates spiked when the Russia/Ukraine thing kicked off.

We had managed to save £90K to pay off a chunk from the mortgage while we were on a better rate. But when the rate went up when it came to remortgage, the repayment still ended up increasing, albeit by a lot less.

I would just ensure that you have decent emergency fund and not to overextend yourself. Do your own stress tests. We could have borrowed so much more than we did, and we would have been really stretched when rates went up.

This house is “cheap” because it has land but no outbuildings so it would be an enormous expense and it is rural so nobody would travel out to come to our home gym and it would be a security risk to have people coming and going. Thank you for the suggestions. I will try and think of other ways we could make money from the land.

Rent is absolutely driven by mortgage costs alongside of course demand. It’s exactly the same as house prices which are driven by mortgage costs and demand. There is no difference. If mortgage costs go up then your rent will go up. A quick google shows there are still multiple people chasing each rental property, more so in London and other prime cities. If the demand for housing isn’t there, or will shortly be collapsing then why has Burnham just committed to what is in effect another help to buy scheme?

I’m not saying renting is a bad idea - I did it for many years and suited me when I was younger. You do you ultimately, but for me personally I’d much rather be working towards an end goal of having no outlay for my housing in later years.

Some food for thought

https://forums.horseandhound.co.uk/threads/dog-run-field.819889/
https://forums.horseandhound.co.uk/threads/enclosed-dog-field-land-to-rent.839562/

www.canstar.com.au/home-loans/weekly-fortnightly-monthly-repayments-better/

We would if we could but this is the cheapest on the market that is suitable. There are a couple a bit less but they are derelict.

I would only be borrowing £300k. So I didn’t think it was an enormous mortgage. We wouldn’t get anything decent with land for less than the house I have spotted. This house needs work doing to it hence the need for the mortgage.

My mortgage is 50% of our earnings, it's a small house but we had to go in at the top end of mortgage rates at the time, we manage by tightening our belts and stopping unnecessary costs. Obviously we thought rates would be falling by now but thank you, Trump.