How are people actually coping with mortgage payments increasing?

Ballymoney

Wow £710k is the biggest mortgage I’ve seen on here yet. That’s a whopper! Especially with interest only and a larger than normal term too. 

I hope you find a solution that works for you. When does your current fix end? Guessing if you have 28 years remaining you only fixed for 2 years originally?

simon_or

CLG2022 said:

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. 

My mortgage goes to 80. As per my broker, you definitely have multiple hs banks that allow that, for desk based professions. So you could get perhaps get a 35 year term if you needed one. And you can always use the 10% overpayment allowance to overpay if you want to.

fletcher1985

Londoncheesecake said:

CLG2022 said:

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. 

Similar situation here mortgage debt of £360k for a family home worth around £700k (London area where we have always lived as children and work) fixed rate mortgage 1.25% with Santander which ends July 2023. 

From what I have read we cannot remortgage with them until 4 months before due to high early repayment charges.
We are public sector workers (health and police) with very small pay rises so unless we can squeeze in a lodger (with no spare room)we may have to consider relocating or emigrating which is my current mindset right now.

im with santander and they let me lock in my new rate 6 months early. my 2 year fix ended in october lucky for me and i was about to get a better deal with them 6 months before so went from 1.74% to now a 5 year fix at 2.78% if i had done it a bit later would have been a lot higher.

simon_or

So you were already with Santander and they let you book a switch to a new rate 6 months early without any ERC?

That's amazing, I thought existing Santander borrowers could only select a product switch 5 months early.

fletcher1985 said:

Londoncheesecake said:

CLG2022 said:

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. 

Similar situation here mortgage debt of £360k for a family home worth around £700k (London area where we have always lived as children and work) fixed rate mortgage 1.25% with Santander which ends July 2023. 

From what I have read we cannot remortgage with them until 4 months before due to high early repayment charges.
We are public sector workers (health and police) with very small pay rises so unless we can squeeze in a lodger (with no spare room)we may have to consider relocating or emigrating which is my current mindset right now.

im with santander and they let me lock in my new rate 6 months early. my 2 year fix ended in october lucky for me and i was about to get a better deal with them 6 months before so went from 1.74% to now a 5 year fix at 2.78% if i had done it a bit later would have been a lot higher.

WittyUserName

CLG2022 said:

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. 

To cope with the prospect of a potential 5% interest rate (we dare not contemplate even higher rates) we’ve decided that our options are: 

Plan a) throw as much as we can to get our balance down to a target number so that when our fix ends in 2025 a 5% interest rate might mean we’re paying roughly (or only slightly more than) what we’re currently paying on 1.6%.

It’s demoralising to think we could deprive ourselves and sink all our spare cash into the mortgage for the next few years, just to ‘stand still’. But it is what it is. 

Plan b) when our fix ends we try to remortgage to interest-only or a part and part mortgage for 2 years, to ride things out. 

Of course that depends on if IO mortgages are still available and whether we meet the criteria at the time. But I feel that unless banks don’t mind people handing over their house keys en masse, they’ll leave some options available. 

Plan c) admit defeat and sell up! Who knows what house prices will be at the time, and whether we’d be facing selling at a loss. 

We’re currently paying £2,400 a month (London property) and if we weren’t on a fix, a 5% rate would push that up to £3,400. Alongside all the other cost of living rises, like CLG2022 said it would feel like we’re working for nothing. 

It’s not looking pretty but we’ve decided not to make ourselves sick with worry - we have a plan and a budget we follow religiously, so we’ll just stick to the plan and see what happens when the fix is up. 

wobjelly

Ballymoney said:

Wow £710k is the biggest mortgage I’ve seen on here yet. That’s a whopper! Especially with interest only and a larger than normal term too. 

I hope you find a solution that works for you. When does your current fix end? Guessing if you have 28 years remaining you only fixed for 2 years originally?

Our current term ends in May 2023.. it is 2 year fix with Halifax. I guess as lots of others do, we will try to secure remortgage offer in January. 

We have just done a large scale renovation in the last year putting lots of my thoughts into the design of the house and will feel totallly gutted if we need to sell the house off now..!

MattMattMattUK

I do not have to worry for another two years but I still expect relatively high rates at that point. For me it will mean I will have to stop overpaying my mortgage, holidays will likely go as well, though with Covid I have not been for a few years anyway and general cut backs on going out, I already am good with food and home expenditure. Ahead of that and to get a bit more money together ahead of the rises I may well get a lodger, although I would rather not.

Sea_Shell

Reading some of these posts, you realise how much money is going to be sucked out of the wider economy, if the otherwise "quite well off" are having to pay £1000s more a month in mortgage payments, rather than discretionary "nice" things ☹️

Similar with fuel bills, but on a smaller scale, which hits further down the income scale.

bamgbost

Our current term ends in May 2023.. it is 2 year fix with Halifax. I guess as lots of others do, we will try to secure remortgage offer in January. 

We have just done a large scale renovation in the last year putting lots of my thoughts into the design of the house and will feel totallly gutted if we need to sell the house off now..!

Has Halifax extended the period for remortgage offers. I always thought it was 3 months?

MattMattMattUK

Sea_Shell said:

Reading some of these posts, you realise how much money is going to be sucked out of the wider economy, if the otherwise "quite well off" are having to pay £1000s more a month in mortgage payments, rather than discretionary "nice" things ☹️

Similar with fuel bills, but on a smaller scale, which hits further down the income scale.

That is going to be the bigger problem and it makes the energy price rises and food inflation look like an irrelevance. Even high earners I know are slashing luxuries and saving and/or investing in anticipation of things getting even worse. The interest rate situation is going to make a mildly bad economics situation far far worse.