How are we supposed to afford an 40% increase in mortgage payments...this can't go on!

michaels

You can save £500 per month by giving up the lease on a BMW and buying a 2k runabout.

Getting rid of sky tv and sports package £90pm

Sim only no iphone deal is £5 pm not £70

Shop at aldi with cheaper meat, no alcohol can cut a family food bill to £400pm from £800

Meals out and takeaways are not essential, nor are purchased coffees and packed lunches are less than one quarter the cost of buying lunch.

Holidays are not essential, nor are gigs, theatre trips or festivals

These are all things older generations did without when incomes were lower.  We will afford our mortgage increase going up by 130%/£635pm as we value having a home.  If you are not willing to give up some of the things mentioned above to own a home it is a choice not a punishment.

MattMattMattUK

Ryan_Holden said:

The lack of compassion and comprehension by some people here is astonishing. 

Telling the OP to 'batten down the hatches' and 'cut back' on a 40% increase on mortgage costs is absurdly disconnected with the reality of what some mortgage holders are facing.

If you take the national average, you'd have to earn 10K more p/a before tax to accommodate for it and maintain your standard of living. That's just not a possibility for a lot of people.

That is the point though, people will have to accept a drop in living standards, that is what the interest rate rises are designed to do by reducing people's access to borrowing and take money out of the economy which will apply downward pressure on inflation. 

It might not be what people want to hear, but it is the reality of the situation. 

Ryan_Holden

michaels said:

You can save £500 per month by giving up the lease on a BMW and buying a 2k runabout.

Getting rid of sky tv and sports package £90pm

Sim only no iphone deal is £5 pm not £70

Shop at aldi with cheaper meat, no alcohol can cut a family food bill to £400pm from £800

Meals out and takeaways are not essential, nor are purchased coffees and packed lunches are less than one quarter the cost of buying lunch.

Holidays are not essential, nor are gigs, theatre trips or festivals

These are all things older generations did without when incomes were lower.  We will afford our mortgage increase going up by 130%/£635pm as we value having a home.  If you are not willing to give up some of the things mentioned above to own a home it is a choice not a punishment.

Ahhh man this really, really grinds my gears and only reinforces the disconnect some people have.

I would hedge my bets confidentially that the majority of people struggling with a mortgage are not paying out £1055+ on discretional spending.

To just broadly suggest they need to cut back on things they probably don't have is insulting and just shows the disconnect.

Older generations didn't cut back on £500 pcm car payments or Sky TV or Sim only phone deals.

Be honest or be quiet.

DullGreyGuy

Ryan_Holden said:

The lack of compassion and comprehension by some people here is astonishing. 

Why is it astonishing @Ryan_Holden ?

If someone came on here and said they'd bought a Ferrari but now with the increase in fuel costs and insurance they can't afford it how much compassion would you be giving them? Having seen similar things elsewhere the general comments were that the Ferrari was out of your affordability.

The reality was always that historic low interest rates were not going to last forever and a return to normal levels (which we are still below) was inevitable. You can have some sympathy but ultimately it was bad planning to exceed what can afford for what realistically was going to happen and people need to own that. 

Raising interest rates is intended to drive down people's ability to spend so will be achieving what its planned to do 

Ryan_Holden

DullGreyGuy said:

Ryan_Holden said:

The lack of compassion and comprehension by some people here is astonishing. 

Why is it astonishing @Ryan_Holden ?

If someone came on here and said they'd bought a Ferrari but now with the increase in fuel costs and insurance they can't afford it how much compassion would you be giving them? Having seen similar things elsewhere the general comments were that the Ferrari was out of your affordability.

The reality was always that historic low interest rates were not going to last forever and a return to normal levels (which we are still below) was inevitable. You can have some sympathy but ultimately it was bad planning to exceed what can afford for what realistically was going to happen and people need to own that. 

Raising interest rates is intended to drive down people's ability to spend so will be achieving what its planned to do 

I don't think conflating ownership of a luxury sports car against the basic aim of owning your own housing is fair or constructive.

I am not arguing the fact that interest rates have been historically low for a long time.

I am simply asking people to consider that not everyone who has bought a home in the last few years will have fully appreciated that the rates could rise by as much as they have, let alone in as short a period of time as they have.

I base this on 15 years of basically no movement, it would not be reasonable to presume that everyone who bought a house was keenly following the potential of interest rate movement to the nth degree.

michaels

Ryan_Holden said:

michaels said:

You can save £500 per month by giving up the lease on a BMW and buying a 2k runabout.

Getting rid of sky tv and sports package £90pm

Sim only no iphone deal is £5 pm not £70

Shop at aldi with cheaper meat, no alcohol can cut a family food bill to £400pm from £800

Meals out and takeaways are not essential, nor are purchased coffees and packed lunches are less than one quarter the cost of buying lunch.

Holidays are not essential, nor are gigs, theatre trips or festivals

These are all things older generations did without when incomes were lower.  We will afford our mortgage increase going up by 130%/£635pm as we value having a home.  If you are not willing to give up some of the things mentioned above to own a home it is a choice not a punishment.

Ahhh man this really, really grinds my gears and only reinforces the disconnect some people have.

I would hedge my bets confidentially that the majority of people struggling with a mortgage are not paying out £1055+ on discretionary spending.

To just broadly suggest they need to cut back on things they probably don't have is insulting and just shows the disconnect.

Older generations didn't cut back on £500 pcm car payments or Sky TV or Sim only phone deals.

Be honest or be quiet.

Two earners, £30k and £25k, after tax per month is £3780pm

5 x joint salary mortgage £275k at 6% repayment over 25 years costs £1842pm leaves £1940 per month for other bills.

That is more than just essentials IMHO.

MeteredOut

Ryan_Holden said:

Nelliegrace said:

It is hard when the mortgage interest rate goes up, with negative equity, strikes, power cuts, high unemployment, pay freezes, when you can’t afford heating, and count the pennies for basic groceries. 
Try a mortgage interest rate of 17.4%. 

This is all well and true saying try a mortgage at 17.4% but it's immediately rebutted by 1, being atypical of the period and 2, where the relative value to salary was much lower making the affordability much better.

It was lower, but not by anywhere near as much as many people think (or claim). 

https://www.economicshelp.org/blog/5568/housing/uk-house-price-affordability/

(see the Mortgage payments as % of income index and Affordability index charts)

Yes, it will be different going forward.

ElwoodBlues

michaels said:

Ryan_Holden said:

michaels said:

You can save £500 per month by giving up the lease on a BMW and buying a 2k runabout.

Getting rid of sky tv and sports package £90pm

Sim only no iphone deal is £5 pm not £70

Shop at aldi with cheaper meat, no alcohol can cut a family food bill to £400pm from £800

Meals out and takeaways are not essential, nor are purchased coffees and packed lunches are less than one quarter the cost of buying lunch.

Holidays are not essential, nor are gigs, theatre trips or festivals

These are all things older generations did without when incomes were lower.  We will afford our mortgage increase going up by 130%/£635pm as we value having a home.  If you are not willing to give up some of the things mentioned above to own a home it is a choice not a punishment.

Ahhh man this really, really grinds my gears and only reinforces the disconnect some people have.

I would hedge my bets confidentially that the majority of people struggling with a mortgage are not paying out £1055+ on discretionary spending.

To just broadly suggest they need to cut back on things they probably don't have is insulting and just shows the disconnect.

Older generations didn't cut back on £500 pcm car payments or Sky TV or Sim only phone deals.

Be honest or be quiet.

Two earners, £30k and £25k, after tax per month is £3780pm

5 x joint salary mortgage £275k at 6% repayment over 25 years costs £1842pm leaves £1940 per month for other bills.

That is more than just essentials IMHO.

It's not as much as the headline figure sounds:
Council tax - £160
Utilities -  £350
Running costs of 2 cars (for two people to get to work, or alternative public transport) - £750 (£25 tax, £50 insurance, £200 fuel, £100 servicing/MOT on each)
Food - £300

So there's £1500, and that's just household essentials for a couple, doesn't even include clothes, mobile phone bills or actually buying/leasing a car, nor any household repairs or maintenance.

And all that's just for a couple with no kids. God forbid they dare to reproduce and there's a whole load more just to feed and cloth their dependents. For perspective, my 3 kids would munch through £250 a month in school dinners alone if I let them.

Ryan_Holden

michaels said:

Ryan_Holden said:

michaels said:

You can save £500 per month by giving up the lease on a BMW and buying a 2k runabout.

Getting rid of sky tv and sports package £90pm

Sim only no iphone deal is £5 pm not £70

Shop at aldi with cheaper meat, no alcohol can cut a family food bill to £400pm from £800

Meals out and takeaways are not essential, nor are purchased coffees and packed lunches are less than one quarter the cost of buying lunch.

Holidays are not essential, nor are gigs, theatre trips or festivals

These are all things older generations did without when incomes were lower.  We will afford our mortgage increase going up by 130%/£635pm as we value having a home.  If you are not willing to give up some of the things mentioned above to own a home it is a choice not a punishment.

Ahhh man this really, really grinds my gears and only reinforces the disconnect some people have.

I would hedge my bets confidentially that the majority of people struggling with a mortgage are not paying out £1055+ on discretionary spending.

To just broadly suggest they need to cut back on things they probably don't have is insulting and just shows the disconnect.

Older generations didn't cut back on £500 pcm car payments or Sky TV or Sim only phone deals.

Be honest or be quiet.

Two earners, £30k and £25k, after tax per month is £3780pm

5 x joint salary mortgage £275k at 6% repayment over 25 years costs £1842pm leaves £1940 per month for other bills.

That is more than just essentials IMHO.

Brilliant. And if they don't earn that? What if one of them earns £18k in an average clerical role.

And if they have 2 children which need childcare so they can go to those jobs?

And the consequent bills of food, clothing, academic stuff.

It's a good job you've put IMHO because it's very much just your opinion. 

Tbh I know nothing about you or your age but you sound like the almost typical boomer vox-pops that appear on the internet regularly. I'm surprised you haven't mentioned Netflix or Avacado on toast. 

We need to be more compassionate to people who are bearing the brunt of this.

MeteredOut

Ryan_Holden said:

The lack of compassion and comprehension by some people here is astonishing. 

Telling the OP to 'batten down the hatches' and 'cut back' on a 40% increase on mortgage costs is absurdly disconnected with the reality of what some mortgage holders are facing.

If you take the national average, you'd have to earn 10K more p/a before tax to accommodate for it and maintain your standard of living. That's just not a possibility for a lot of people.

Compassion won't pay the increase. This board is about providing help; if the OP wants support rather than practical advice, I suspect Mumsnet might be a better place.