Mortgage costs

[Lily]

My mortgage term ends March next year and I'm starting to look around although I can't do anything until November. Apart from moving in with my parents and renting my place out I don't really know what to do as it looks like payments are likely to double. Things are tight, but manageable, at the moment. They are unlikely to be in a few months.

Is anyone else in the same boat? What are you doing/trying?!

[absley]

Can you get a lodger, Lily?

You could also look at having an interest- only period if you have a repayment mortgage.

[Roma]

I’ve started to to wonder about this too.

My fixed rate will expire in June next year. It’s not worth paying the early repayment charges, so I’ll just have to deal with it and shop around for the best deal and maybe fix for only 2 years instead of my current 5 years.

I should be able to cope, but will definitely have to cut back on other stuff and savings etc. I won’t change to interest only unless I’d absolutely have to as I would never see an end to my mortgage on interest only …

[Kenickie]

Have you spoken to a broker? Lots of lenders will let you lock in rates for up to six months so it could be possible to sort something now to move onto in march. Otherwise, is it worth checking your ERC and doing some calculations based on that?

Could you extend the term?

[Roma]

Extending the term might be a good shout Lily and maybe even getting a lodger if you have the space?

[Marth]

I'm on the same boat as my fixed rate ends the end of March 23. I've diaried 6 months before so I can start looking.
I would consider interest only but only if I could make overpayments off the balance.

[Derek Nimmo]

Can you get a lodger, Lily?

Just to add, if you do this any income from the rental will be tax free up to £7,500 per year, whatever else you earn.

You'd also be able to split utility, WiFi, TV licence etc costs. Unpalatable as the thought of sharing might be, it could seriously ease financial pressures.

[Rebel Pebble]

Based on my experience over the last couple of days trying to contact Barclays, if anyone wants to talk to your mortgage provider about all of this, phone early, phone late or book a morning out of your diary and charge your phone.

Yesterday it told me the wait was more than 90 mins and cut me off. At 7.30am today the wait was more than 40 mins. I managed a generic online chat but I want a specific variety of figures for what I might want to do (which isn't remortgaging)

So yeah although we have a small balance and only six years to go we're on a base rate tracker. And while I was fairly sanguine about a few percentage point rises over the next year, the spectre of 92 is rearing its ugly head and I have no idea how it would affect our payments if things just keep going up. So we're considering throwing some savings at the balance. But I want to go through all the hypotheticals with someone. And right now I literally can't

[Kenickie]

I'm on the same boat as my fixed rate ends the end of March 23. I've diaried 6 months before so I can start looking.
I would consider interest only but only if I could make overpayments off the balance.

Isn't six months before Friday at the latest? So it might be worth making an appointment now?

[Luna]

Based on my experience over the last couple of days trying to contact Barclays, if anyone wants to talk to your mortgage provider about all of this, phone early, phone late or book a morning out of your diary and charge your phone.

Yesterday it told me the wait was more than 90 mins and cut me off. At 7.30am today the wait was more than 40 mins. I managed a generic online chat but I want a specific variety of figures for what I might want to do (which isn't remortgaging)

So yeah although we have a small balance and only six years to go we're on a base rate tracker. And while I was fairly sanguine about a few percentage point rises over the next year, the spectre of 92 is rearing its ugly head and I have literally no idea how it would affect our payments if things just keep going up. So we're considering throwing some savings at the balance. But I want to go through all the hypotheticals with someone. And right now I literally can't

This was me with Barclays yesterday. A few points increase is doable but I am really concerned for the future and there is noone to talk to about it. If my mortgage payments double, I am in the shit big time.

[Topcat]

The list of mortgages being pulled at the moment is like nothing we have ever, ever seen before.

Its an absolute shitshow.

[Marth]

I've just checked and mine runs out the 30th of April. So I can look from the 30th of October I think.

[Margo]

We had a huge flood of new cases in yesterday which must be down to people scrambling before the rates are raised.

I fixed my mortgage last year for 5 years which seemed daft at the time as I’ll hopefully be moving next year, but now I’m really glad I did just in case my plans go past the 2 year mark!

It is a shitshow, TC. What with this and fuel increases I really fear for a lot of people and have no idea how those on lower incomes will cope

[Lily]

Thanks for your ideas. I have spoken to Skipton who were really helpful. I have to pay £1800 early exit fee if I decide to go that way, which may save me money in the long run. To be honest I know I'll never be mortgage-free, so I need to be able to manage monthly payments. At the moment if I go to one of their other rates I would pay £200 extra more a month. I can just about afford that but I would need to cut back on everything and look at taking on a third job, which I may do anyway just to try and keep my head above water.

I did think about renting out my spare room but I would seriously be happier renting out my body. This place is too small to share with anyone unless I put them up in the garage. I have made an appt with Skipton for a financial discussion but also my friend is a mortgage specialist so I will chat to him. I could only get a 2 year fixed at the time as my mortgage is over 33 years because that was the only way to afford the payments.

Bizarrely, for someone whose finances are such a stress, I'm not panicking. A part of me thinks the gvt will HAVE to do something because there is going to be mass suicide otherwise.

I am gutted for my parents though: about to buy their first house, messed around by their insane seller, and now their mortgage offer has expired. They've had to withdraw from the purchase. They were trying to sound upbeat last night but my mum had been crying.

[Montana]

That's gutting for your parents, Lily. Maybe if house prices crash as predicted and some kind of intervention stabilises interest rates a bit, they can revisit this?

[Kenickie]

Thanks for your ideas. I have spoken to Skipton who were really helpful. I have to pay £1800 early exit fee if I decide to go that way, which may save me money in the long run. To be honest I know I'll never be mortgage-free, so I need to be able to manage monthly payments. At the moment if I go to one of their other rates I would pay £200 extra more a month.

So switching now would cost £1800 plus six months of an extra £200= £3k. So you just need to think about how much more your monthly payment would have to rise to make it worth it.

E.g. if you're looking at five year fixes, £3k over the five years is £50 a month. So if you think that it's likely that if you wait a few more months, the rate available will mean you're paying more than £250 more than now, it would be sensible to pay the ERC. You might also need to factor in a) how to fund the ERC if you can't add it to the mortgage and b) the peace of mind gained by fixing now rather than in a few weeks/months.

Sorry about your parents, I hope something else works out for them.

[Rebel Pebble]

But I want to go through all the hypotheticals with someone. And right now I literally can't

This was me with Barclays yesterday. A few points increase is doable but I am really concerned for the future and there is noone to talk to about it. If my mortgage payments double, I am in the shit big time.

Mr R has now registered us for online service, purely because in theory it gives you access to chat with someone who can discuss your personal situation and account, not just generic figures. You have to get a code sent by post which I thought would take ages but arrived yesterday. So, we shall see.....

ETA: Big fat fucking nope, that chat just fails to even start. Hopeless.

[Lily]

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?

I'm now in the process of getting things moving. I'm talking to Skipton as well as the people who got me my deal last time, and also my friend's boyfriend. But - forgive me for a negative bleat please - I feel absolute despair. I'm just about getting by as I am at the moment, but if I pay £200 a month extra and then easily an extra £150 on top of energy bills when I come out of my price fix (I am v lucky and it's August) I simply have nowhere to go. I am paying my parents back a car loan which is £130 a month and have about £800 left of this (£9k originally); they have kindly said that they are happy for me to pause payments if I need to but that's not fair on them (and I certainly wouldn't do it while I'm still on my current payment scheme which is affordable if tight). I may well have to go interest-only for a couple of years if that makes things easier.

I have asked for extra theatre work; there is a chance we will get another 3% payrise but - and I hate to sound ungrateful - that won't make any difference. I will need to look at getting a second evening job, even if it's just one/two nights a week in a bar. And I'm shattered already.

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%).

I feel foolish for ever thinking this was possible.

Forgive me for my blurt but I am incredibly low and increasing my dose or whatever won't help because it's a financial thing. I have stopped caring about or wanting to do anything. I feel utterly hopeless. I feel paralysed and have lost the positivity and contentment I had a few months back. To make matters worse, I also lost a bloody tenner somewhere.

If I feel this bad, WTF is it like for people in far worse situations? How on earth are people on lower incomes, or benefits, going to cope?

[Squirrel]

If your parents’ offer was genuine, ie you think they can afford it and weren’t just being polite, you should take them up on their offer of pausing your repayments to them.

[Luna]

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.