Mortgage increasing by £250p/m wiping out savings

[oddexperience]

Due to the ridiculous interest rates at the moment we're looking at around £250 p/m increase on out £130k mortgage. Currently we save around £300 a month so it's basically wiping that out completely. Is it worth saving £50 per month at all?? Is it worth putting it into premium bonds? What would you do, and are there any decent side hustles that might help offset?

 

[brokenst]

@oddexperience Focus your energy on increasing income as that's the only thing which can make any difference.

 

[vido]

@oddexperience I'm assuming you don't have other debt and you have an emergency fund in place. If you have debt or don't have the emergency fund, then put that £50 towards those.

If you've got those covered, I'd use that extra £50 to put into the mortgage and put other savings and investments (other than your work pension) to one side for now.

If you don't want to do that, then putting £50 a month in a savings account is better than saving nothing at all. Depending on what you've already got savings wise, then make the most of your various tax free and ISA allowances.

 

[middletrust]

@oddexperience It's always worth saving. When I was working a warehouse job after redundancy I reduced my monthly vanguard direct debit to £50. It's a good habit to keep.

 

[oddexperience]

@middletrust What's a vanguard payment?

 

[holla]

@oddexperience Vanguard is an investment company, they were buying shares.

 

[middletrust]

@oddexperience As @holla said, it's an investment platform, even though it sounds like a payday loan company

 

[cjwolf]

@oddexperience What is your mortgage rate?

 

[oddexperience]

@cjwolf 5.9%

 

[beloved21]

@oddexperience Are you staying with the lender? Or is that via a broker?

 

[oddexperience]

@beloved21 Staying with the lender. This is 1 part of a 3 part mortgage so needing to tie them all up eventually, end of 2025 we can make that happen

 

[beloved21]

@oddexperience Can you use the money saved up so far to reduce the balance?

 

[anita007]

@oddexperience Do you have a solid budget? Are there any other expenses you could cut?

 

[oddexperience]

@anita007 Pretty solid. We have £500 a month in for food and household which we could tighten up but not by much.

Other expense are just bills (energy, water, council tax, car insurance/tax, life and house insurance, netflix and Spotify)

Pet insurance we could cut but it would be an absolute last resort with an 8 year old dog.

Basically we already don't go on holidays, don't have car payments, shop in charity shops/vinted only, shop in Aldi. Don't know what else we can do!

 

[myopier]

@oddexperience If you can't spend less then possible to earn more? Can one or both of you job hop to boost salary?

 

[oddexperience]

@myopier I'm going on Mat leave in 5 months (talk about bad timing) but husband is possibly getting a pay rise in October but I don't think it would be an additional £250 p/m

 

[holla]

@oddexperience Do you get good maternity pay?

 

[oddexperience]

@holla Nope. Statutory.

 

[clarrisa]

@oddexperience You can cancel Spotify and Netflix. Radio is free, and you can survive fine on the 50+ channels on freeview.

That’ll save you another £20 per month which is 40% more than £50. It could mean the difference to being able to pay for an expected bill and being broke.

Also, look at MSE guide to bank switching. I got £1000 cash back from doing 5 bank switches in 4 months. You can both do that, and get £1-2000.

 

[gellybean90]

@clarrisa Sometimes Spotify and Netflix brings people a little bit of joy in this shitty world