How are people actually coping with mortgage payments increasing?

brownbagsFTB

grandadgolfer said:

Think about us oldies who were paying 14% back in the late 80s and todays increases don't seem that bad

A rise of £400 a month isn’t that bad?! 🙃 And I don’t even have a massive mortgage, add the tax rise and energy bills into the equation and it’s safe to say a lot of people are going to suffer. 

6% nowadays is the equivalent of a 15% in the 80’s as our loans are much bigger so it doesn’t track to try to compare percentages. This really is a crisis for many people with a mortgage 

housebuyer143

grandadgolfer said:

Think about us oldies who were paying 14% back in the late 80s and todays increases don't seem that bad

Actually, they are worse because people's loan to income are much higher. 10% on 30k is nothing compared to 10% on 300k. 

mi-key

grandadgolfer said:

Think about us oldies who were paying 14% back in the late 80s and todays increases don't seem that bad

I remember my dad in the 80s was paying 17% at one point !! Total madness, and very few people had fixed rates back then

ElwoodBlues

grandadgolfer said:

Think about us oldies who were paying 14% back in the late 80s and todays increases don't seem that bad

Leeds Building Society says 6% mortgage rates today are the equivalent of 25% in 1980. I think that's a bit of a stretch but the point is that there are other variables.

https://www.estateagenttoday.co.uk/breaking-news/2022/10/6-mortgage-rates-are-equivalent-to-25-in-1980-lender-claims

london21

grandadgolfer said:

Think about us oldies who were paying 14% back in the late 80s and todays increases don't seem that bad

True but the house prices nowadays compared to income a lot of people will/are struggling.

It’s the cost of energy, food, mortgage etc all happening at once.

Ray_Singh-Blue

I decided this was a good time to pay off the mortgage. So did.

Large interest only mortgage for many years

Along side this , built up investment portfolio in ISAs.

Benefited from many years of investment gains & investments were approx double mortgage

Low fixed rate came to an end, decided this was the right time to cash in them chips.

Wasn't sad to see the back of the mortgage but did feel a twinge of regret letting go of the ISA

SuboJvR

Our fix is due to end in August 2024, by which time we will have about £200k outstanding and 18 years on the term.  We also have a Help to Buy loan.

I am worried, but I’m past the initial all-consuming anxiety.  There are things we can do at that point if we need to, if our salaries haven’t increased sufficiently, to cut back further.  We didn’t borrow the max of our affordability (in 2017) but I wish we had overpaid more, or used money differently in some ways over the past few years.  

Husband has had a career change this year and should have steady increases for the next seven years (public sector).  My salary has gone up considerably from when we first bought the house.

Above say, 7/8% I become more worried. 

Yes, we did look at the affordability stuff on our mortgage offer back in the day.  Yes, it did register.  No, I didn’t assume energy prices would go absolutely bonkers, nor did I assume a global pandemic would completely turn the world upside down, nor did I assume the price of milk would go up week on week, nor that Russia would invade Ukraine, nor that the government would announce radical financial changes only to reverse them weeks later after seeing how badly it affected the UK economy and on a global scale.  Does that make me an idiot? Maybe it does.  It’s not very fair when people do make out like we are all dumb or lacked common sense for not predicting the absolutely insane state of the country right now. 

We are 37, we didn’t buy some mansion we just happen to live in the south east.  Yes it is a choice, but it was made to be near ageing family, and now our careers are linked to the local areas.  

Anyway… I’m putting some money away now with all this in mind, we are working all the overtime we can.  I’m just not entirely sure what to do with it as everything is so volatile, but I don’t need to decide just now.  On the one side the idea of overpaying to get the balance down appeals, on the other just putting the money aside to help if we need it in 2024 for a couple of years of higher interest rates in the hope it comes down a bit after that.

isadreamalie

SuboJvR said:

Our fix is due to end in August 2024, by which time we will have about £200k outstanding and 18 years on the term.  We also have a Help to Buy loan.

I am worried, but I’m past the initial all-consuming anxiety.  There are things we can do at that point if we need to, if our salaries haven’t increased sufficiently, to cut back further.  We didn’t borrow the max of our affordability (in 2017) but I wish we had overpaid more, or used money differently in some ways over the past few years.  

Husband has had a career change this year and should have steady increases for the next seven years (public sector).  My salary has gone up considerably from when we first bought the house.

Above say, 7/8% I become more worried. 

Yes, we did look at the affordability stuff on our mortgage offer back in the day.  Yes, it did register.  No, I didn’t assume energy prices would go absolutely bonkers, nor did I assume a global pandemic would completely turn the world upside down, nor did I assume the price of milk would go up week on week, nor that Russia would invade Ukraine, nor that the government would announce radical financial changes only to reverse them weeks later after seeing how badly it affected the UK economy and on a global scale.  Does that make me an idiot? Maybe it does.  It’s not very fair when people do make out like we are all dumb or lacked common sense for not predicting the absolutely insane state of the country right now. 

We are 37, we didn’t buy some mansion we just happen to live in the south east.  Yes it is a choice, but it was made to be near ageing family, and now our careers are linked to the local areas.  

Anyway… I’m putting some money away now with all this in mind, we are working all the overtime we can.  I’m just not entirely sure what to do with it as everything is so volatile, but I don’t need to decide just now.  On the one side the idea of overpaying to get the balance down appeals, on the other just putting the money aside to help if we need it in 2024 for a couple of years of higher interest rates in the hope it comes down a bit after that.

My Mum died in May 2016... she'd be aghast reading this... things certainly seemed much 'quieter' then 

Getting_greyer

Scorpio33 said:

Getting_greyer said:

I'm just praying for daily inflation to hit 500000% so I can pay the mortgage off with a weeks wages.

You mean your pay goes up by that amount? Just because inflation increases, it doesn't automatically translate to a wage increase.

Was a joke. I'm not really praying for hyperinflation.

CLG2022

We have £477k left on our mortgage, house worth £850k so approx 55% LTV. Monthly payment £1750. 26 yrs remaining. 
Current fix of 1.09% end in May 2023. ERC is £14k! This is with Santander. 

The follow on rate is 5.5% which would put our monthly payments up to £2835. +£1085. Now, this wouldn't be so bad except I am towards the end of maternity leave and nursery fees will now be £1200 a month also. I will be working full time in a stressful role for nothing basically. 

I don't know whether to try and secure a new deal now and add the ERC onto the mortgage or wait until the New Year? I feel at a loss quite honestly. 

I don't even think we can increase the term as my husband is 44 and me 39. 

It's going to be a tough few years I think.