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Mortgage rate is killing us, debt not going down - Any suggestions

3dogsandacrazyhouse
3dogsandacrazyhouse Posts: 13 Forumite
Sixth Anniversary First Post
in Debt-free wannabe
Hi, In December our mortgage went from 1550pm to now 2750pm and rising, we are on a variable. We were hoping it was going to start coming down and we could secure a lower one than we were offered. 

My main problem is that we have between us approx 15k on credit cards (also 13k car loan very low rate) and the rate is obviously going up on credit cards as well. We are now starting to struggle to pay everything, we have survived dec-may as we have cut everything we can and reduced spending as much as possible. 

I was thinking of a debt consolidation loan, but after a quick search on here, most say that is not a good option. Any other ideas or suggestions would be welcome?

Thanks

«134

Comments

  • Grumpelstiltskin
    Grumpelstiltskin Posts: 5,390 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Normally a Debt Consolidation Loan is a very bad idea.

    We need to know much more about your financial position before we can advise you the best way forward.

    SOA Calculator (lemonfool.co.uk)

    The link to a SOA, you need to fill it in honestly and carefully and copy and paste it to MSE then we can advise you.
    If you go down to the woods today you better not go alone.
  • EssexHebridean
    EssexHebridean Posts: 24,349 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    SOA is the first step.

    Also - start to research around what rates your current provider can offer you for a fix - the likelihood of rates coming down any sort of appreciable amount in the near future is pretty slim - and frankly if it were me, I'd get that research done immediately, and see if you can apply for something this evening - as the chances are that tomorrow is going to see a further interest rate rise, IMO. 
    🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
    Balance as at 01/09/23 = £115,000.00 Balance as at 31/12/23 = £112,000.00
    Balance as at 31/08/24 = £105,400.00 Balance as at 31/12/24 = £102,500.00
    £100k barrier broken 1/4/25
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    she/her
  • 3dogsandacrazyhouse
    3dogsandacrazyhouse Posts: 13 Forumite
    Sixth Anniversary First Post
    [font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

    Household Information[/b]
    Number of adults in household........... 2
    Number of children in household......... 
    Number of cars owned.................... 2[b]

    Monthly Income Details[/b]
    Monthly income after tax................ 3200
    Partners monthly income after tax....... 2000
    Benefits................................ 0
    Other income............................ 0[b]
    Total monthly income.................... 5200[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 2507
    Secured/HP loan repayments.............. 1285
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 269
    Electricity............................. 150
    Gas..................................... 100
    Oil..................................... 0
    Water rates............................. 101
    Telephone (land line)................... 0
    Mobile phone............................ 31
    TV Licence.............................. 13
    Satellite/Cable TV...................... 0
    Internet Services....................... 45
    Groceries etc. ......................... 400
    Clothing................................ 0
    Petrol/diesel........................... 160
    Road tax................................ 35
    Car Insurance........................... 112
    Car maintenance (including MOT)......... 0
    Car parking............................. 120
    Other travel............................ 120
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 142
    Buildings insurance..................... 0
    Contents insurance...................... 0
    Life assurance ......................... 117
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 0
    Haircuts................................ 0
    Entertainment........................... 100
    Holiday................................. 0
    Emergency fund.......................... 0[b]
    Total monthly expenses.................. 5807[/b]
    [b]

    Assets[/b]
    Cash.................................... 0
    House value (Gross)..................... 1100000
    Shares and bonds........................ 0
    Car(s).................................. 0
    Other assets............................ 0[b]
    Total Assets............................ 1100000[/b]
    [b]

    Secured & HP Debts[/b]
    Description....................Debt......Monthly...APR
    Mortgage...................... 418000...(2507).....5.6
    Secured Debt.................. 20000....(500)......0
    Hire Purchase (HP) debt ...... 12000....(425)......4<
    Lease .........................4320.....(360)......0[b]
    Total secured & HP debts...... 454320....-.........-   [/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR
    Barclays.......................8000......394.......30
    virgin.........................0.........0.........0
    vanquis........................3486......198.......29
    Halifax........................2600......180.......34
    mbna...........................3800......178.......33
    capital one....................0.........0.........0[b]
    Total unsecured debts..........17886.....950.......-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 5,200
    Expenses (including HP & secured debts). 5,807
    Available for debt repayments........... -607
    Monthly UNsecured debt repayments....... 950[b]
    Amount short for making debt repayments. -1,557[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 1,100,000
    Total HP & Secured debt................. -454,320
    Total Unsecured debt.................... -17,886[b]
    Net Assets.............................. 627,794[/b]

    [i]Created using the SOA calculator at www.LemonFool.co.uk.
    Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
  • CliveOfIndia
    CliveOfIndia Posts: 2,472 Forumite
    1,000 Posts Second Anniversary Name Dropper
    3dogsandacrazyhouse said:
    [font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

    Household Information[/b]
    Number of adults in household........... 2
    Number of children in household......... 
    Number of cars owned.................... 2[b] Do you need 2 cars?  A car is a big expense once you take all the associated costs into account

    Monthly Income Details[/b]
    Monthly income after tax................ 3200
    Partners monthly income after tax....... 2000
    Benefits................................ 0
    Other income............................ 0[b]
    Total monthly income.................... 5200[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 2507
    Secured/HP loan repayments.............. 1285
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 269
    Electricity............................. 150
    Gas..................................... 100
    Oil..................................... 0
    Water rates............................. 101
    Telephone (land line)................... 0
    Mobile phone............................ 31
    TV Licence.............................. 13
    Satellite/Cable TV...................... 0
    Internet Services....................... 45
    Groceries etc. ......................... 400  This is a lot for just 2 adults.  Get yourself down to Aldi/Lidl and this can be cut quite a lot.
    Clothing................................ 0
    Petrol/diesel........................... 160
    Road tax................................ 35
    Car Insurance........................... 112  This sounds high, even assuming it covers both cars.  Have you shopped around?
    Car maintenance (including MOT)......... 0  You need something here (unless it's covered by a lease/PCP/whatever agreement?)
    Car parking............................. 120  This is a lot every month - can you reduce this?
    Other travel............................ 120  What does this cover, if you've already got 2 cars?  Can it be reduced?
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 142
    Buildings insurance..................... 0  You need to have Buildings Insurance
    Contents insurance...................... 0  You need to have Contents Insurance
    Life assurance ......................... 117  Is this actually necessary if you have no dependants?
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 0 Nothing?  Not even small gifts for family members/each other?
    Haircuts................................ 0
    Entertainment........................... 100  This can be cut (or does this cover "Holiday" as well?)
    Holiday................................. 0
    Emergency fund.......................... 0[b]  You need something here
    Total monthly expenses.................. 5807[/b]
    [b]

    Assets[/b]
    Cash.................................... 0
    House value (Gross)..................... 1100000  Is this correct or a typo?  1.1 million?
    Shares and bonds........................ 0
    Car(s).................................. 0  Why is there nothing here?
    Other assets............................ 0[b]
    Total Assets............................ 1100000[/b]
    [b]

    Secured & HP Debts[/b]
    Description....................Debt......Monthly...APR
    Mortgage...................... 418000...(2507).....5.6
    Secured Debt.................. 20000....(500)......0
    Hire Purchase (HP) debt ...... 12000....(425)......4<
    Lease .........................4320.....(360)......0[b]
    Total secured & HP debts...... 454320....-.........-   [/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR
    Barclays.......................8000......394.......30
    virgin.........................0.........0.........0
    vanquis........................3486......198.......29
    Halifax........................2600......180.......34
    mbna...........................3800......178.......33
    capital one....................0.........0.........0[b]
    Total unsecured debts..........17886.....950.......-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 5,200
    Expenses (including HP & secured debts). 5,807
    Available for debt repayments........... -607
    Monthly UNsecured debt repayments....... 950[b]
    Amount short for making debt repayments. -1,557[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 1,100,000
    Total HP & Secured debt................. -454,320
    Total Unsecured debt.................... -17,886[b]
    Net Assets.............................. 627,794[/b]

    [i]Created using the SOA calculator at www.LemonFool.co.uk.
    Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
    I've added some comments in bold.  Please take them in the spirit in which they're intended - food for thought rather than criticism.

  • Grumpelstiltskin
    Grumpelstiltskin Posts: 5,390 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    A quick note Water Rates £101 monthly, is this correct? If so why so high?
    If you go down to the woods today you better not go alone.
  • TheAble
    TheAble Posts: 1,676 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Would agree with EH you should speak to your mortgage company soonest as tbh with a £1500/month deficit you're quickly running out of rope.

    That said, the variable rate you're on isn't uncompetitive relative to the fixed rates on the market, but who knows how much further rates have to climb. Likely another 0.25-0.5% on the way tomorrow.

    Also those credit card APRs are ruinous. Maybe consider some balance transfers if available (though take care to avoid the trap of running up more debt if you do, as this is all too common).
  • theoretica
    theoretica Posts: 12,690 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    You are currently £1560 short - but your mortgage has only gone up by £1200 so you were in trouble without the mortgage increase - though some may be thanks to robbing Peter to pay Paul.  How do the numbers work out for handing back the car?  Are the lease and secured loan things you could hand back?  How can you increase your income?  Could you take in lodgers to get some income from your house?
    But a banker, engaged at enormous expense,
    Had the whole of their cash in his care.
    Lewis Carroll
  • Judytoo
    Judytoo Posts: 8 Forumite
    Part of the Furniture First Post Combo Breaker
    You can cut back on food to £300 a month 
    Lodgers is a great idea
    Weekend jobs for you both as there are no children who need looking after. 
  • TheAble
    TheAble Posts: 1,676 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Life assurance ......................... 117  Is this actually necessary if you have no dependants?

    Life assurance necessary here as dependent on each other's income.
  • 3dogsandacrazyhouse
    3dogsandacrazyhouse Posts: 13 Forumite
    Sixth Anniversary First Post
    We have been making up some money by working weekends, a friend has a catering company, that helps. 

    A lodger is a possibility, I'll look into it, along with the water bill as that is what they take each month. 

    I will definitely try cutting back on food, but we only shop at Lidl, but £400 is our breakfasts and lunches for weekdays as we do not buy food while at work, and also our dinners/all other food while at home. 

    I live 45 mins from the train station, then have to get the tube. £120pm parking/£120pm train ticket 

    £100 entertainment is a £25 per week on a night out, normally a "first table" voucher 

    We cut all the presents for family before our entertainment, ha ha 

    No typo. 1.1m (we sold our main residence and a rental to purchase it) 
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