Mortgage costs

[sally maclennane]

I feel really foolish not realising when interest rates went up my monthly payments would go up. And not realising I was on a low rate which wasn't likely to stick around (2.6%).

Don't beat yourself up about this, Lily, mortgage rates have been low for so long, most people (me included) didn't think about payments going up significantly. You've just been unlucky in the timing of it, and in having a shitty government who don't really care about average homeowners.

I agree with the others who say that you should take your parents up on their kind offer, they want to help so let them. That will give you some breathing space and let you see what your new rate will be, as well see how energy bills go. You mentioned a pay rise which may be small but it all helps, and also you may have extra theatre shifts by then. See where all that leaves you before thinking about another job, you'll wear yourself out.

[Squirrel]

Don't beat yourself up about this, Lily, mortgage rates have been low for so long, most people (me included) didn't think about payments going up significantly. You've just been unlucky in the timing of it, and in having a shitty government who don't really care about average homeowners.

This is all true. And even if you factored a rate rise in, it didn’t occur to me that every single bloody thing would also go up so much at once. It’s completely unmanageable for so many people and businesses.

[Rebel Pebble]

Ken, I forgot to say thank you for your post which was really helpful and spelled things out very well to me. Rebs, did you get anywhere?

Yes, finally, in the end.

Like others have said, nobody could have foreseen things going quite this wrong in all directions at once. It's not on you. And I agree with Squizz and others that you should take your parents up on their offer. And maybe have a think about going interest only for a bit.

I think it's criminal that the government is trying to curb spending by punishing home owners. I honestly despair for youngsters' futures in this bloody country. They are going to have to change their tack. Surely they should be pulling 0% finance instead. I have managed to sort out my mortgage woes but if I hadn't I would seriously have considered renting out my house and living in a bloody campervan.

While our hideous government is absolutely to blame for literally everything else that's causing this, the choice to raise interest rates is coming from the BofE. They're had independence on that since the late 90s.

https://www.bankofengland.co.uk/events/ ... 0-years-on

I still think it's stupid and cruel though. It's a blunt instrument which ignores the fact that inflation is going up due to factors outside of people's control. They simply CAN'T spend less and save more, which is what interest rate hikes are supposed to encourage. This isn't people going out and spending on Teslas, it's food and heating. It's a wrong-headed and outdated approach, I think. I know they're also trying to stop the pound tanking any more and the blame for THAT situation does lie firmly with the govt, and Brexshit.

It was 1992 the last time interest rates were raised precipitously while we were in a recession. Back then it WAS the government doing it and it was because of the ERM fiasco. It made things worse then and it will do again this time.

[Montana]

Ken, I forgot to say thank you for your post which was really helpful and spelled things out very well to me. Rebs, did you get anywhere?

Yes, finally, in the end.

Like others have said, nobody could have foreseen things going quite this wrong in all directions at once. It's not on you. And I agree with Squizz and others that you should take your parents up on their offer. And maybe have a think about going interest only for a bit.

I think it's criminal that the government is trying to curb spending by punishing home owners. I honestly despair for youngsters' futures in this bloody country. They are going to have to change their tack. Surely they should be pulling 0% finance instead. I have managed to sort out my mortgage woes but if I hadn't I would seriously have considered renting out my house and living in a bloody campervan.

While our hideous government is absolutely to blame for literally everything else that's causing this, the choice to raise interest rates is coming from the BofE. They're had independence on that since the late 90s.

https://www.bankofengland.co.uk/events/ ... 0-years-on

I still think it's stupid and cruel though. It's a blunt instrument which ignores the fact that inflation is going up due to factors outside of people's control. They simply CAN'T spend less and save more, which is what interest rate hikes are supposed to encourage. This isn't people going out and spending on Teslas, it's food and heating. It's a wrong-headed and outdated approach, I think. I know they're also trying to stop the pound tanking any more and the blame for THAT situation does lie firmly with the govt, and Brexshit.

It was 1992 the last time interest rates were raised precipitously while we were in a recession. Back then it WAS the government doing it and it was because of the ERM fiasco. It made things worse then and it will do again this time.

Totally agree. Can't see any logic to raising interest rates when it's supply issues rather than excessive consumer spending causing inflation. I don't buy into the notion (as said by Jeremy Hunt on Sunday) that the BoE 'has no choice' but to do this. I'm sure the government could exert some pressure if they wanted to - but clearly they don't want to.

[Lily]

Thank you for that - it does help, truly, as I feel like the grasshopper in Aesop's fable and now my chickens have come home to roost. (Yes appalling metaphor) I feel like I should have seen this coming. had cut my cloth and budgeted so that I had something to save and a bit left over every month but that's gone to pot now; I don't even input anything in my spreadsheet anymore. It all feels pointless.

I was supposed to have E/D therapy yesterday but I pulled out as I don't want to talk to anyone about anything. I haven't been exercising either which is unlike me so I forced myself to do a workout today which has helped a bit.

I will consider a loan holiday payment or even just halving it until I get on a more even keel but I don't want it dragging out any longer than it has to and I also want them to have their money back!

I keep thinking that something has to give and the government will do *something* :waveshandsvaguely: but they're not going to, are they?

Ultimately, you can't get blood out of a stone. If the money isn't there, it simply isn't there, and that's all there is to it. They can try to put my energy d/d up, but if I can't afford it, I will just have to keep payments at levels I can afford, and get masses into debt. I suspect that is what a huge amount of people are going to wind up doing. Better that than lose my house.

[Lily]

My broker has come up with a 5 year fixed at 4.74% which brings my monthly payments to £957.02 (currently £720). It'll be tough but it's not unmanageable.

I think there's a £295 application fee which I need to pay to the broker. If rates drop drastically in the next couple of months and a better deal were available I would have to pay that again wouldn't I? Is there a way for me sorting this out myself?

[Topcat]

Is that actually to the broker or to the proposed lender?

Also, if you are going into a fix I would imagine there would be big redemption penalties to get out of the existing arrangement so soon after entering it?

[Duophonic]

Have you looked at any of the comparison sites to give an idea of what's around?

It's years since I've been a mortgage broker but a fixed normally comes with a set-up fee and a hefty redemption penalty to get out of it before the end of the term - it's normally waived in the last month of the term.

[sally maclennane]

Are rates likely to drop though? I'd have thought fixing is a good option at the moment?

[nineseven]

I think there's a £295 application fee which I need to pay to the broker. If rates drop drastically in the next couple of months and a better deal were available I would have to pay that again wouldn't I?

If only it were just the broker fee! The penalty for leaving a fix early would be far higher.

[Kenickie]

I think Lily means that she's paying for a new fix when hers runs out in March, so if she pays the fee now can she switch before it starts.

You'll have to check with your broker, Lily, but mine I could change before it actually started if I needed to.

[Kenickie]

You can also apply direct, Lily, so you don't need a broker. Some have exclusive rates and are really helpful in getting things chased up. Mine was totally rubbish though and asked for a million extra things (for them not the mortgage company) which was really annoying.

[Lily]

Sorry, this wouldn't be for getting out of my deal early, but for arranging the new mortgage once my current deal ends. I haven't looked around because my longer than average term seems difficult for lay people to get a mortgage for. And also because I simply have no clue what I'm doing. This broker is good (they got me this current mortgage) so I do trust them and apparently I can change before getting locked in if rates go down.

I couldn't cope with anything variable. It would need to be fixed.

[Livilla]

Are rates likely to drop though? I'd have thought fixing is a good option at the moment?

This is obviously fingers in the air, but the ratings agencies are predicting the base rate will peak this year at around 4% and gone down next year (they are predicting it will stabilise then between 2 and 2.5%. Although inflation was lower in December, and there was some, albeit limited growth in the month, so perhaps the BOE might wait out the next review date on a wait and see basis?

[Marth]

I'm not sure I would fix for 5 yrs at present. I'm aiming just for two and waiting to my rate runs out in April as I'm hoping they will drop a bit more.

[Lily]

5 years does sound like a long time. I don't know if I would be able to get a shorter fix, given that my term is over 105 years.

[Kenickie]

5 years does sound like a long time. I don't know if I would be able to get a shorter fix, given that my term is over 105 years.

I'm not surprised not many people want to lend to you. ;)

I kind of regret getting a 5 year fix but it felt like the world was imploding at the time. I nearly went for ten!

[Lily]

That is exactly how it feels at the moment. I have time enough - this current deal ends 31 May - but it does seem wise to just knuckle down for the next 5 years.

[Lily]

Can I ask those of you on variable rate/tracker mortgages, how much do your monthly payments fluctuate?

[Princess Morripov]

It depends on how much the mortgage is for though, non?

<snip>

I will snip that in a bit but I would genuinely fix if I could (but I can't for any of the above as I can't get a better rate/I want to sell)