Is anyone struggling because of mortgage interest rate rises?

Fonz_2

I wouldn't say struggling yet but it's certainly not a welcome change and I'm watching carefully now to see what happens next.

My mortgage payment has gone up from £1,184 to £1,250 in the last 6 months.

The problem is deciding whether to hold on and see it come back down again to be quids in, or to bail out, take the mortgage exit fee and grab a fixed deal.

spud30

bargainbetty wrote: »

Why not set up a few appointments at other lenders and see what they have to offer? Don't be forced into staying with this lender, as they tend to not be as friendly to existing customers as they are to new customers!! I'd been with Halifax for 5 years when they offered me a 0.5% discount on the standard variable rate and nothing on the fixed rate offer..... no wonder I'm now with Alliance and Leicester!

Shop around - do some online research too and make some phone calls. Nothing throws a banker off his spiel faster than someone who knows what they are talking about!!

Have a good one!

Unfortunately, due to the DMP, I cant imagine other lenders being interested in offering us a remortgage either :rolleyes:

ZTD

james23_uk wrote: »

I can see interest rates getting into double figures in the next 2-3 years so I would go fixed everytime.

I woudn't be so sure. If the BoE is panicking enough to offer "unlimed loans" at base rate - would they then cripple those financial institutions by slapping high interest rates on them?

Broken_hearted

Mine goes up next May, I've worked it out so we can cope with it rising by up to 6% AFTER THAT WE ARE IN TROUBLE.

ZTD

Broken_hearted wrote: »

Mine goes up next May, I've worked it out so we can cope with it rising by up to 6% AFTER THAT WE ARE IN TROUBLE.

Given that it's 5.75% and the longterm average is (IIRC) about 8%, then that's not a large margin for error.

It may be that the current troubles may encourage governments to cut rates - but again, it might not.

blackangeluk

I am just in the process of changing my mortgage as my 2 year fixed ends at the end of September and was due to go up but about £250 :eek: I have managed to get it at a very good rate elsewhere and fixed it for 5 years. I prefer fixed rate as I know what to expect for the next 5 years and given that I will be spending the next 2 years clearing debts I don't want any more nasty surprises!

dubgirl

Hi, we are currently on a fixed rate which ends April 2009, however after that I am worried, partly due to what the interest rate could be by then and also about all the talk of lenders getting rid or trying to get rid of fixed rate mortgages, we will be stuffed if that is the case.

HairyHandofDartmoor

Wow lots of responses since I last logged on! Thanks for all the replies. I'm tempted to wait and see, but if lenders stop offering fixed rate mortgages or they get thin on the ground, then I worry that I may have missed the boat.

I've got lots to think about anyway. I may go for the review and just see what the Nationwide have to say, but not sign up for anything, and then get other quotes as bargainbetty suggests.

I am more financially savvy now than 5 years ago. Then we were just so grateful to be offered a bigger mortgage that we just grabbed the first deal we were offered! If we had shopped around we may have got a better deal then, so will certainly shop around now!

Trouble is you need to be able to see into the future to know the best thing to do. I'm slightly concerned about what ZTD says about the long term average being 8%. We are all struggling to pay off our debts now, so how will we all cope if rates go up to 8%

ZTD

HairyHandofDartmoor wrote: »

Trouble is you need to be able to see into the future to know the best thing to do. I'm slightly concerned about what ZTD says about the long term average being 8%. We are all struggling to pay off our debts now, so how will we all cope if rates go up to 8%

Well I'd like to point out that this is an average, so for every year that you spend at 6%, you need to spend a year at 10% in order to "balance it out".

But there are some people who do believe that "this time it's different", and that the long-term average is due to come down. Of course, the reason they believe it's going to be different is that they believe bad things are going to happen.

HairyHandofDartmoor

Okay, now you're scaring me! lol.

I went on the mortgage calculator and we could manage up to 8% but it would mean less money to pay off debts which would be frustrating.

Anyway deal runs out end of September so I'll see which way the wind is blowing then!