Anxious about remortgage

goodwithsaving

As the thread title suggests, I'm feeling very apprehensive. I'm due to re-mortgage from a 5 year fix in early January.

I currently overpay by £250/month and put a few thousand down not long ago. Overall, I'll have reduced my mortgage by £20k in 18 months. I'll have a 50% LTV.

In January, what I pay now would have be inline with the re-mortgage and I was feeling confident life would start to improve and become a little more affordable over time. However global tensions have concerned me. I am now looking at £156 more per month - since January's rates - and anticipate this will increase. Anything much higher will start making it difficult. The problem is, the mortgage in isolation would be okay, but everything else has shot up too. If that is the increase since January, I dread to think what the increase may be by Christmas.

I have a re-mortgage session booked with my broker in July.

I'm single and in a well paid job, but our pay rises are usually 1% or so, and most of that is swallowed up in tax.

Is it just me feeling this way? I'm feeling quite stressed about it. I know a lot can happen in 8 months but I can't see the rates coming back down. The BoE hasn't amended the base rate, yet the banks are increasing the rates regardless.

I usually fix for 5 years. I'm torn with 3 year, variable, or 5 year…….

Jemma01

Many of us are feeling the pressure, if not the mortgage then the general cost of living. I do think 8 months is a long time to go, and things could change to the better. Well done on overpaying.

It's very hard to guess whether rates will go up or down, who knows if an idiot will start another war!!

ACG

There are things you can do to make it more affordable if it is getting too expensive - extending the term, putting part of the mortgage on interest only etc - we did a lot of this after the mini budget in 2022-23. Not ideal, but it kept people in their homes. Things have improved and some of those people have since remortgaged and reduced the term back down.

The difference with interest rates this time around though is that it is mortgage lenders who have raised interest rates - not central banks. The bank of england base rate is still the same as it was in January. That is different to 2022-23.

I was on a meeting with a chief economist from a bank 9 days ago (so recent) and his view was that if the war ends soon then inflation will happen but it is unlikely to "bed in" which again going back to 2022-23 is what happened. It happened because at the time employees had the power to ask and get pay rises. His view is that the job market it is in a very different place now and employers have more on their side to refuse the pay rise requests.

I have been on enough of these meetings to know that economists get it wrong. So I would not be relying on it, but for me the bank of england base rate is telling. This war might not be resolved by the next base rate announcement, but I imagine it will be by the one after.

I suppose after 4 paragraphs what I am saying is try not to stress. It might improve, it might get worse. But you have 8 months. Look at what has happened in the last 6 weeks. IF things do get worse, there will be options - nothing ideal, but enough to mean you should be able to keep the roof over your head.

fuzz

I am remortgaging as well and used the deal finder on here - yesterday I was looking at deals of 4.01% and now they are gone - overnight? the lowest I can see is 4.79% so this is really crazy that deals are getting pulled. Am gutted as I wish I had just started the application yesterday!! :(

ACG

https://forums.moneysavingexpert.com/discussion/comment/81963036#Comment_81963036

There is absolutely no way mortgages have shot up 0.78% overnight. Sorry to sound so direct, but I worry about people reading this and panicking. I think it is important to clarify rates have not shot up by this amount overnight.

Im not saying you are wrong, I am saying the system you are using either was not correct yesterday (ie those products were not available) or it is not correct today and it is missing products - or you have not compared like for like.

Rosco32

I was apprehensive when I was due to remortgage last year. The best deal my mortgage advisor could find at the time was 4.75%, which was an increase from the 2.x% I had been paying prior. This increased my monthly payment by £264. I managed to cut back in other areas to help reduce the overall additional outgoings each month. I accepted there’s not really much I can do about it.

ACG

I've had an email from a lender this morning mentioning rate reductions.

Thats 4 I think in the last 2 weeks. I have had just as many (if not more) rate rise emails. But it feels like we might be at the peak… Time will tell.

fuzz

https://forums.moneysavingexpert.com/discussion/comment/81963087#Comment_81963087

yes it was the way i was searching but my question is still valid. And people will panic and freak out no matter what….

RelievedSheff

There really is no point being anxious about something that you have absolutely no control over. Rates will be whatever they are come remortgage time and there will in 99% of cases be a way to keep repayments affordable.

January is a long way off yet. Anything could happen between now and then. Try not to panic about it.

ACG

https://forums.moneysavingexpert.com/discussion/comment/81963775#Comment_81963775

Hang on… You said rates have gone from 4.01% to 4.79% overnight.

As soon as I say thats not right you admit it was down to how you searched.

Then you say they will panic regardless?!

They will panic a whole lot less if they dont think rates are going up nearly 20% overnight!