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

fatbelly

I'm sure that somewhere you could have a very comfortable lifestyle, in a house you own outright and run a car that you bought with cash.

How you get there from where you are now will require planning so that you are in charge of the process. The longer you let things drift, the more difficult this will be

theoretica

I find it can be useful to look at SOAs from the opposite side - rather than which bits of spending could you cut and tweak start from the fact you have £5200 coming in (plus any more you can earn).  How will you spend that amount and no more? 

enthusiasticsaver

You have a good income but I imagine you have been struggling for a while given the very large shortfall you have and no doubt some of the credit card debt is due to you not being able to live after your debt repayments and mortgage have gone out. The latest interest rate rise will pile more pain on and there is every likelihood we have not seen the last of the increases and that they will not come down any time soon.  So before the unsecured debt hits £20k or £30k in your situation I would be proactive and sell up to get a lower mortgage or no mortgage at all. 

Your income is  £5200 and your debt and mortgage repayments £4742.  That leaves you  less than £500a month to pay your  other bills and actually live.  It is unsustainable.  Defaulting on the credit cards is an option but that involves trashing your credit file and if you want a decent mortgage rate it will not help.  Have you approached your lender to see what they can offer you? Can you move to interest only for a period of time to get the house sold maybe and you move to a  more affordable house? Your bills do not reflect a mansion so is it just you live in the south east or London area and that is the cost of housing where you are? Can you reduce the cost of the cars at all?  Running two of them and paying out for train travel on top is costing you £1300 each month. 

You have not said where you live but  if it is the south east I can well believe that it has crippled you financially.  We moved away 30 years ago and I think it is probably worse now for housing.  There is no need for expensive car leases or pcp.  Get a cheaper runaround. 

kimwp

I think we shouldn't just consider the benefit of pets to the owners but also that the owners have taken on a commitment to look after these animals. They have emotional needs and attachments too. They should definitely be valued over an expensive car or house.

Floss

OP, perhaps you could acknowledge the advice you've been given (ignoring that about the dogs though) ?

theoretica

The mortgage flexibility which has been announced today might be worth looking into - according to the BBC article you might be able to change to interest only for 6 months.  That wouldn't be enough to put you back into the black, but might be useful while you work out what major long term actions to take.

sourcrates

Pets, no pets, doesn't make any difference to the OP`s overall situation.

No amount of budget re-jigging is going to magically produce an extra £1600 per month to balance the books with.

Sorry to be blunt, but unless you can make up the shortfall from extra income, which is unlikely, something will eventually give, as secured creditors make up a significant part of your shortfall in income.

The unsecured debts are around £950 per month, which you can ditch if push comes to shove, secured loan is £500, car is just over £400, if you let the car go, you may just balance the books but with no wiggle room whatsoever.

What is the Lease payment for, £360 lease on what ?

Without that debt, the situation would be better, not good, but better.