Fixed rate coming to an end

rentmekid

Hi all,

I’m currently in a stressful situation.

My fixed rate is due to end next year, and I’m expecting my current mortgage payment to jump from £1400pm by an extra £1000 per month.

I’ll not be able to afford this payment, and will not be able to switch to another lender due to changes in income since purchasing.

My only option is to request the lender to change me to interest only.

Is this something that they will consider or am barking up the wrong tree.

Lender is Bank of Scotland.

housebuyer143

They will not just change you to interest only unless you meet the affordability and have a repayment strategy and I'm also not sure interest only is going to do huge amount to bring down the payments with rates as high as they are. Interest only as a product is aimed at those who do not need it. 

You can switch temporarily but it won't solve your issue as after 6 months you are in the same predicament.  
Can you extend the term to bring down the payments? Speak to your lender about it but realistically if you can't afford it you will need to sell it before you get into arrears.

Sncjw

How has it jumped.by 1000 per month. 

Looking at the rates for now ours would only jump by 100. 

housebuyer143

Sncjw said:

How has it jumped.by 1000 per month. 

Looking at the rates for now ours would only jump by 100. 

Very easily. They have a sub 1% rate, a very large loan and a potential 5x increase?

Mine went from £130 a month to £630. 

Sncjw

When I went to mortgage advisor they did show like a stress test of affording higher mortgage and they do say we were being sensible by not going to top of what we were offered. 

I don't think I could manage if we were at the the top end of the mortgage offer. 

I understand house prices and stuff varys but I also do see people go to top end of budget just to get a nice house. 

housebuyer143

Sncjw said:

When I went to mortgage advisor they did show like a stress test of affording higher mortgage and they do say we were being sensible by not going to top of what we were offered. 

I don't think I could manage if we were at the the top end of the mortgage offer. 

I understand house prices and stuff varys but I also do see people go to top end of budget just to get a nice house. 

People also buy completely within their means and then have a change in circumstances, maybe they get ill, have kids etc. Life is unpredictable, I don't think you can blame the OP because they couldn't forsee and plan for everything that could have happened. 

It's good the OP is looking ahead to sort it before it's a problem, even if the only solution is to sell. 

WYSPECIAL

Sncjw said:

How has it jumped.by 1000 per month. 

Looking at the rates for now ours would only jump by 100. 

Balance outstanding you have in your signature is lower than average.

Some people coming off low fixed rates are seeing an increase in the region of 7% in interest rate so a mortgage of £175k would suddenly cost an extra £12k a year to pay.

MFWannabe

rentmekid said:

Hi all,

I’m currently in a stressful situation.

My fixed rate is due to end next year, and I’m expecting my current mortgage payment to jump from £1400pm by an extra £1000 per month.

I’ll not be able to afford this payment, and will not be able to switch to another lender due to changes in income since purchasing.

My only option is to request the lender to change me to interest only.

Is this something that they will consider or am barking up the wrong tree.

Lender is Bank of Scotland.

When does current fix end?
How much mortgage is outstanding? 

How many years is the mortgage over? 

Are you able to extend the term? 

All the above are relevant before anyone can give correct advice 

Hoenir

rentmekid said:

Is this something that they will consider or am barking up the wrong tree.

Only you are aware of your personal financial circumstances. Ring the lender and have an open honest discussion with them. Whilst they have a duty of care to assist. The lender isn't going to provide you with long term solutions. Only you can make those difficult possibly challenging decisions.