Remortgage due Jan 2024

tony863

I'm in the same boat as well. Mine ends Dec 23 on a 1.43% deal. Broker has said I'm looking at 5.24% which is an increase of over £400!

She advised to bank something in July and then revisit on a monthly basis to see if there is anything better. I'm tempted by a tracker mortgage which is about 4.85%. It can obviously go up, but even a 50 point rise by the BoE will only bring the tracker up 0.11 above the fixed rate.... Is it worth the risk? Not sure tbh, but I know that I'll be living hand to mouth until it comes down again and for someone on double the national wage average, I can't believe I'm in that situation.

I made sure I had ~£800 left per month for emergencies, but all of that has been gobbled up by extra energy costs, council tax rises, food inflation... And now the mortgage rise. But as long as the UK keeps supporting those on low incomes, it's all fine. Don't worry about the middle income earners that always bear the brunt of increases and never get any help. 

housebuyer143

tony863 said:

I'm in the same boat as well. Mine ends Dec 23 on a 1.43% deal. Broker has said I'm looking at 5.24% which is an increase of over £400!

She advised to bank something in July and then revisit on a monthly basis to see if there is anything better. I'm tempted by a tracker mortgage which is about 4.85%. It can obviously go up, but even a 50 point rise by the BoE will only bring the tracker up 0.11 above the fixed rate.... Is it worth the risk? Not sure tbh, but I know that I'll be living hand to mouth until it comes down again and for someone on double the national wage average, I can't believe I'm in that situation.

I made sure I had ~£800 left per month for emergencies, but all of that has been gobbled up by extra energy costs, council tax rises, food inflation... And now the mortgage rise. But as long as the UK keeps supporting those on low incomes, it's all fine. Don't worry about the middle income earners that always bear the brunt of increases and never get any help. 

There are no trackers on the market at 4.85%. The comparison sites just haven't updated, that one will be 5.35% now. 
If you are struggling with the increase then do not go on a tracker as it's likely only to go higher.

FashionHeart

Clare8132 said:

Hi, we are due to remortgage Jan 2024. Our current interest rate is 1.79% - our mortgage is £225k.
Do we look to lock in a deal now or hold out to nearer the time? Very worried the £250-400 a month increase will hit us hard. 

This will depend if your lender will give you the flexibility to lock in a new rate without having to suffer the financial consequences of an ERC.
I'm with HSBC and my fixed rate ends on 31st August 2023.
They give existing customers the flexibility to lock in a new rate 180 days before their rate ends.

simon_or

tony863 said:

I'm in the same boat as well. Mine ends Dec 23 on a 1.43% deal. Broker has said I'm looking at 5.24% which is an increase of over £400!

She advised to bank something in July and then revisit on a monthly basis to see if there is anything better. I'm tempted by a tracker mortgage which is about 4.85%. It can obviously go up, but even a 50 point rise by the BoE will only bring the tracker up 0.11 above the fixed rate.... Is it worth the risk? Not sure tbh, but I know that I'll be living hand to mouth until it comes down again and for someone on double the national wage average, I can't believe I'm in that situation.

I made sure I had ~£800 left per month for emergencies, but all of that has been gobbled up by extra energy costs, council tax rises, food inflation... And now the mortgage rise. But as long as the UK keeps supporting those on low incomes, it's all fine. Don't worry about the middle income earners that always bear the brunt of increases and never get any help. 

Only because you've complained that you "never get any help", with all due respect, you didn't help yourself did you?

If you were that worried, with a fix ending in December, you should have spoken to your broker in April or May as there are banks like Nationwide that will allow you to book a rate for 90 days by doing a decision in principle. Then you get another 6 months on the mortgage offer. Plus another 15 days grace period. 

Or the coop bank lender which will extend a 6 month offer by 3 months.

You could have got a rate close to 4% rather than the 5% one you're looking at now. Maybe save a reminder somewhere for next time.

Also ask your broker if you can extend your term and reduce the monthly payment, some banks will let you extend the term all the way to 80. You can still overpay and pay it off sooner if you want to but this might help reduce the risks that come with living paycheck to paycheck.

If you want to take it even further ask your broker about going part and part. Again, you can still choose to overpay.

OhWow

tony863 said:

I'm in the same boat as well. Mine ends Dec 23 on a 1.43% deal. Broker has said I'm looking at 5.24% which is an increase of over £400!

She advised to bank something in July and then revisit on a monthly basis to see if there is anything better. I'm tempted by a tracker mortgage which is about 4.85%. It can obviously go up, but even a 50 point rise by the BoE will only bring the tracker up 0.11 above the fixed rate.... Is it worth the risk? Not sure tbh, but I know that I'll be living hand to mouth until it comes down again and for someone on double the national wage average, I can't believe I'm in that situation.

I made sure I had ~£800 left per month for emergencies, but all of that has been gobbled up by extra energy costs, council tax rises, food inflation... And now the mortgage rise. But as long as the UK keeps supporting those on low incomes, it's all fine. Don't worry about the middle income earners that always bear the brunt of increases and never get any help. 

Also, "Only because you've complained that you "never get any help", with all due respect, you didn't help yourself did you?" When you bought your first house in 2007, you said the interest rates you were offered were all around 6% https://forums.moneysavingexpert.com/discussion/415124/help

Did it never occur to you to overpay like mad all these years? When the interest rates dropped so low for years that it was virtually free money?

weddingringman

(Removed by Forum Team)

Rates have been rising for 18 months now, from a base-rate low that was introduced entirely as a result of the pandemic.

It amazes me that millions of people didn’t consider paying the early repayment charge on their fix at some point in the last year to take a better rate than those we could see coming down the road. I know a few people that paid the fee and took a 10 year fix. 

In 2018 I got a really small amount of inheritance and I used it all on the ERC of my 5 year fix which was at the mid-point, because rates had fallen enough for it to represent a net saving. 

I appreciate people are coming on here for advice and not a telling off, but the narrative is always that people are the victims here when they should’ve taken a lot more responsibility for their finances.

simon_or

weddingringman said:

Edi81 said:

OhWow said:

tony863 said:

I'm in the same boat as well. Mine ends Dec 23 on a 1.43% deal. Broker has said I'm looking at 5.24% which is an increase of over £400!

She advised to bank something in July and then revisit on a monthly basis to see if there is anything better. I'm tempted by a tracker mortgage which is about 4.85%. It can obviously go up, but even a 50 point rise by the BoE will only bring the tracker up 0.11 above the fixed rate.... Is it worth the risk? Not sure tbh, but I know that I'll be living hand to mouth until it comes down again and for someone on double the national wage average, I can't believe I'm in that situation.

I made sure I had ~£800 left per month for emergencies, but all of that has been gobbled up by extra energy costs, council tax rises, food inflation... And now the mortgage rise. But as long as the UK keeps supporting those on low incomes, it's all fine. Don't worry about the middle income earners that always bear the brunt of increases and never get any help. 

Also, "Only because you've complained that you "never get any help", with all due respect, you didn't help yourself did you?" When you bought your first house in 2007, you said the interest rates you were offered were all around 6% https://forums.moneysavingexpert.com/discussion/415124/help

Did it never occur to you to overpay like mad all these years? When the interest rates dropped so low for years that it was virtually free money?

Lots of very short memories these days!

It amazes me that millions of people didn’t consider paying the early repayment charge on their fix at some point in the last year to take a better rate than those we could see coming down the road. I know a few people that paid the fee and took a 10 year fix. 

It's great that it worked out for you but that's just hindsight speaking.

It may have worked out (or may work out in 5-10 years time) for some of the folk that did that looking back now, but at the time you're guaranteeing a cost (ERC and loss of low rate) in the hope that you'll save later on, there was nothing guaranteed about mortgage rates going up by so much and so rapidly.

Plus some of those who panicked just after the Truss spike, paid an ERC on a low LTV mortgage to fix at 5% might have missed out on the significantly lower rates in April-May (which they could perhaps have got without an ERC) before they started rising again.

So I would humbly suggest that it's a bit more nuanced than being a slam dunk decision at the time.

housebuyer143

simon_or said:

weddingringman said:

Edi81 said:

OhWow said:

tony863 said:

I'm in the same boat as well. Mine ends Dec 23 on a 1.43% deal. Broker has said I'm looking at 5.24% which is an increase of over £400!

She advised to bank something in July and then revisit on a monthly basis to see if there is anything better. I'm tempted by a tracker mortgage which is about 4.85%. It can obviously go up, but even a 50 point rise by the BoE will only bring the tracker up 0.11 above the fixed rate.... Is it worth the risk? Not sure tbh, but I know that I'll be living hand to mouth until it comes down again and for someone on double the national wage average, I can't believe I'm in that situation.

I made sure I had ~£800 left per month for emergencies, but all of that has been gobbled up by extra energy costs, council tax rises, food inflation... And now the mortgage rise. But as long as the UK keeps supporting those on low incomes, it's all fine. Don't worry about the middle income earners that always bear the brunt of increases and never get any help. 

Also, "Only because you've complained that you "never get any help", with all due respect, you didn't help yourself did you?" When you bought your first house in 2007, you said the interest rates you were offered were all around 6% https://forums.moneysavingexpert.com/discussion/415124/help

Did it never occur to you to overpay like mad all these years? When the interest rates dropped so low for years that it was virtually free money?

Lots of very short memories these days!

It amazes me that millions of people didn’t consider paying the early repayment charge on their fix at some point in the last year to take a better rate than those we could see coming down the road. I know a few people that paid the fee and took a 10 year fix. 

It's great that it worked out for you but that's just hindsight speaking.

It may have worked out (or may work out in 5-10 years time) for some of the folk that did that looking back now, but at the time you're guaranteeing a cost (ERC and loss of low rate) in the hope that you'll save later on, there was nothing guaranteed about mortgage rates going up by so much and so rapidly.

Plus some of those who panicked just after the Truss spike, paid an ERC on a low LTV mortgage to fix at 5% might have missed out on the significantly lower rates in April-May (which they could perhaps have got without an ERC) before they started rising again.

So I would humbly suggest that it's a bit more nuanced than being a slam dunk decision at the time.

This!
Timing the market well was lucky, it's not down to any special abilities, you wouldn't be on here telling us how you fixed for 10yrs at 3% just before the rates dropped to sub 1% would you? but that's what lots of people did and were badly caught out. 
No one could predict the speed which rates would fly up. 

I fixed my energy for 3 years one month before the increases. I don't tell people I saw it coming, I tell them I got lucky because anything else would just be a lie.

Jonboy1889

housebuyer143 said:

simon_or said:

weddingringman said:

Edi81 said:

OhWow said:

tony863 said:

I'm in the same boat as well. Mine ends Dec 23 on a 1.43% deal. Broker has said I'm looking at 5.24% which is an increase of over £400!

She advised to bank something in July and then revisit on a monthly basis to see if there is anything better. I'm tempted by a tracker mortgage which is about 4.85%. It can obviously go up, but even a 50 point rise by the BoE will only bring the tracker up 0.11 above the fixed rate.... Is it worth the risk? Not sure tbh, but I know that I'll be living hand to mouth until it comes down again and for someone on double the national wage average, I can't believe I'm in that situation.

I made sure I had ~£800 left per month for emergencies, but all of that has been gobbled up by extra energy costs, council tax rises, food inflation... And now the mortgage rise. But as long as the UK keeps supporting those on low incomes, it's all fine. Don't worry about the middle income earners that always bear the brunt of increases and never get any help. 

Also, "Only because you've complained that you "never get any help", with all due respect, you didn't help yourself did you?" When you bought your first house in 2007, you said the interest rates you were offered were all around 6% https://forums.moneysavingexpert.com/discussion/415124/help

Did it never occur to you to overpay like mad all these years? When the interest rates dropped so low for years that it was virtually free money?

Lots of very short memories these days!

It amazes me that millions of people didn’t consider paying the early repayment charge on their fix at some point in the last year to take a better rate than those we could see coming down the road. I know a few people that paid the fee and took a 10 year fix. 

It's great that it worked out for you but that's just hindsight speaking.

It may have worked out (or may work out in 5-10 years time) for some of the folk that did that looking back now, but at the time you're guaranteeing a cost (ERC and loss of low rate) in the hope that you'll save later on, there was nothing guaranteed about mortgage rates going up by so much and so rapidly.

Plus some of those who panicked just after the Truss spike, paid an ERC on a low LTV mortgage to fix at 5% might have missed out on the significantly lower rates in April-May (which they could perhaps have got without an ERC) before they started rising again.

So I would humbly suggest that it's a bit more nuanced than being a slam dunk decision at the time.

This!
Timing the market well was lucky, it's not down to any special abilities, you wouldn't be on here telling us how you fixed for 10yrs at 3% just before the rates dropped to sub 1% would you? but that's what lots of people did and were badly caught out. 
No one could predict the speed which rates would fly up. 

I fixed my energy for 3 years one month before the increases. I don't tell people I saw it coming, I tell them I got lucky because anything else would just be a lie.

Very true, in the same way that someone who did the apparently sensible thing and fixed at 10 years in 2010 would have wasted a lot of interest over that time. Hindsight is a wonderful thing but not fair to apply it 

Parties03

We had the exact same situation and ended up just paying the ERC and taking a fixed 4.29% for 5 years. 

We worked out the maths and if the rate were to go up to 4.7% by August (when we were able to secure a new rate) then even with the ERC and change in monthly payments this was our better option 

it was a bet either way… but going up to 4.7 looked like it was realistic so we just locked in last week.  Time will tell if it was right.