Mortgage increasing by £250p/m wiping out savings

[deeoh]

@ibelong By that logic, the banks didn't predict it either so you can't have any faith in their current estimates.

 

[chanhhobieu]

@deeoh Thank you!

 

[oddexperience]

@ibelong We were on a 5 year fixed, wish we'd done a 10 year now!

 

[nullhypothesis]

@oddexperience Let's not go there, wish I got the right lottery numbers, wish I went all in on netflix shares in 2012, wish I bought Tesla shares. hind sight is 20 20

 

[oddexperience]

@mhrova If you were in our position would you take the fixed rate? Even if it put you in debt on a monthly basis?

 

[mhrova]

@oddexperience There’s a lot of “it depends” in there.

How much does it put your monthly cash flow negative. How tight are other areas of your budget, are there other areas you could save some money, cancelling subscriptions you don’t, or rarely use. Could you save some money on groceries etc. could you get rid of, or get a cheaper car.

The other aspect is what is your trajectory at work, do you expect your pay might increase in the medium term, either annual pay rises or promotions etc.

And what happens if interest rates go up in another 6 months? How screwed are you then?

 

[oddexperience]

@mhrova I think we could just about manage the 6.6 fixed rate monthly cost but not be able to save anything.
My husband's pay is due to increase in a couple of months. I'm going onto Mat Leave (have savings separately to cover my half of the bills etc) so I doubt I'll be in for any pay increases or promotions and time soon.
Come October 2025 we'll be saving around £600 a month not paying nursery fees.

 

[mhrova]

@oddexperience Then I’d probably fix for 3-5 years.

Basically I’d want a plan that limits hope. Pausing savings and tightening the belt for a bit while a pay rise and saving nursery fees feels like a plan.

 

[rjr1209]

@oddexperience Have you looked longer? 5 year trackers are lower I think. 10 years as well although obviously 10 years would be rather difficult to get out of.

Even then from the BoE decision today, 6 members wanted a 0.25% rise and 2 a 0.5% rise. So odds are it will rise at least the next two times. If not more.

So does your tracker rising a further 0.5% to 1% put you in a worse state….

 

[oddexperience]

@rjr1209 Either a 1% increase or going onto the proposed fixed will put us in a pretty sticky situation.

 

[nullhypothesis]

@rjr1209 I'm not agreeing with this, the latest inflation is out soon, I'm expecting it to be lower than last update. I'm gambling a few non increases, maybe the odd one until next year and then rates come down a little. They won't goto what they were

 

[neena56]

@oddexperience You’d imagine it will stay about 5% for at least the next three years.

It should probably never go below 4% again in my opinion.

 

[dolally]

@oddexperience Who is your mortgage with?

 

[don_k]

@oddexperience Btw the mortgage rates are not 'ridiculous'.

They were ridiculous. Ridiculously low.

 

[dash1800]

@don_k Yes but you clearly aren't taking into account record house prices.

 

[colinpf]

@dash1800 But house price inflation has been fuelled in part by easy borrowing.

 

[wore]

@colinpf No, house prices resettling around an interest rate is not particularly interesting. By raising interest rates, house prices have to fall 30% in nominal terms to get you the same house as last year.

Everyone is worse off now. As the expert from Buildplace says "get used to spending more and getting less".

The ONLY solution is to build more.

 

[yearning4yeshua]

@wore Mate I wouldn't bother with this lot, so I'm this one comment almost every single comment from other people are incorrect lol

 

[lucas2885]

@colinpf 100% correct. Unfortunately we needed rate increases about a decade ago to return the economy to sanity. Instead we got a decade of rampant and ridiculous speculation from the wealthy which everybody else is now paying for.

 

[dash1800]

@colinpf Ok explain wage stagnation then?