MORGAGE RATE RISE AT 62 WILL I BE ABLE TO AFORD IT?

deliveryguy1

I currently have a Morgage at less than 2% WITH Barclays but runs out next year  i am 61 and work part time on Benifits currently owe £40,000 and paying £300 a month just wondering  what my Morgage will go up to due to my age as its only 6 years till  im 67 my friend thinks it will go up to over £700 a month is this right ?

Newbie_John

If you pay £300 on £40k mortgage this would mean you have about 12 years left?

Saying that £40k mortgage for 12 years at 2% you pay £313 a month. If your rate goes up to 6% your monthly fee jumps only to £390, no where near £700.

elsien

Your friend may be thinking that if you remortgage, due to your age they might suggest you go on a shorter term which would mean higher payments. Otherwise, see above answer.
Have you tried playing around with a mortgage calculator to see what different interest rates would mean for you?

dunstonh

my friend thinks it will go up to over £700 a month is this right ?

If you were interest only then yes it could be.   However, a capital and repayment mortgage would not.

amnblog

Sounds like you have 6 years to go to clear the mortgage on a capital repayment basis.

The bulk of what you are currently paying is reducing the capital (perhaps only £68 is interest).

Therefore, although a new Barclays rate might be 5.45% for example, that only increases your total monthly payment to around £653

deliveryguy1

Newbie_John said:

If you pay £300 on £40k mortgage this would mean you have about 12 years left?

Saying that £40k mortgage for 12 years at 2% you pay £313 a month. If your rate goes up to 6% your monthly fee jumps only to £390, no where near £700.

thank you for your reply when taking out Morgage 4 years ago working   part time on benefits  42k for £300 a month slightly less than 2% fixed for 5 years but paid for 4 years so probably owe less than 40k but was only allowed to go up to age 67 years old which leaves 5  years to pay balance

deliveryguy1

amnblog said:

Sounds like you have 6 years to go to clear the mortgage on a capital repayment basis.

The bulk of what you are currently paying is reducing the capital (perhaps only £68 is interest).

Therefore, although a new Barclays rate might be 5.45% for example, that only increases your total monthly payment to around £653

Thanks was talking in pub and have now just relished where he went wrong, he was calculating the 42k fixed rate at over 6% thinking I've only paid 4k off my Morgage. but after seeing your post (perhaps only £68 is interest) meaning i will have paid 14k off Morgage leaving 28k so now looking at less than £600 i think  thanks for your post. it has  made my day