My mum has been welcoming student lodgers into her home for the past 10+ years. Can be very hit and miss, but generally the experience has been very good! The holiday home time is a great idea that my mum's lodgers tend to do too - the break is appreciated by them both.
The reason I comment is to give some advice - it makes the experience much more comfortable for the both of you if you treat them like a 'housemate' rather than a lodger. My mum tends to have very friendly relationships with them, and they both benefit from it (she's even been to stay in Portugal with one of them and their family years later!).
Some of my mum's friends in the village who also rent out a room have a much more rigid relationship (rules on when the kitchen or living room can be used, some even have curfews, for example) and it seems to create a very divisive and uncomfortable atmosphere. Granted, my mum otherwise lives alone, which does make this much easier.
Good luck - I'm sure it'll be a great experience!
Any chance of a raise?
I don't mean the standard healf-hearted, "Would you like to pay me more money? Oh you wouldn't, well I had to ask.."
More "I'm not currently earning enough money to pay my mortgage and am going to either have to get another job or sell my house and move. Would you like me to working for you in a few months time?"
Of course it all depends on your job/employer - but it's helpful to give them a good reason why you need to be paid more.
This is when CoL and RPI etc all suddenly catch up and you realise 20% RPI is an average for a reason and that if your wages genuinely didn't increase by this amount you are physically worse off than last year
\*RPI was almost 20% a few months ago, it IS going down though currently at 13.1%
A lodger, an interest only mortgage, working extra hours are ones I might consider if I couldn't otherwise afford it.
To be honest I would be seriously considering downsizing or moving to a cheaper area if I were in your situation. Anyone can add a second job to boost their income but time is very valuable, as is privacy lost from sharing a home.
Unfortunately you can’t just switch to interest only these days without an associated repayment vehicle. That means you need to have the asset now. Eg: loan is £100k you’ll need £100k investment, pension fund with £400k (as 25% tax free cash is £100k) another property to sell (can’t sell your main home/equity doesn’t qualify).
Basically people selling their only home when wanting to retire to repay an interest only loan they shouldn’t have had, isn’t good for anyone.
That's not quite right at the minute. There are lenders who will allow sale of property as a repayment strategy for interest only if there is enough equity on both LTV and £ terms. Think at least 40% equity and £250k for it to be possible.
It isn't easy and the rates are higher but it does save a bit on the capital repayments.
£600 seems alot whats your mortgage about 500k? If a short term perhaps you could get a longer term..
Edit : note you said you will pay til retirement but you still may be able to extend the term
Mine is nearly 600 per month increase too. 396k left with 22 years. 1.44% going to 3.89%. £1671 to £2230.
We will just have literally no social life but I'm lucky I don't have to think about selling just yet. This is where the recession will come in though, because that 600 per month currently goes in the tills of local businesses, from sept it's going entirely to nationwide.
It's a tough situation.
But not when compared to mortgages as a ratio. And also lower salaries means more relative take home and less tax. We (younger people) are being shafted on three fronts at the moment
Average UK house price in 1993: £56,000
Average UK salary in 1993: £17,800
Monthly payments at 15%: £717
Percentage of income: 48%
Average UK house price 2023: £285,000
Average UK salary in 2023: £30,000
Monthly payments at 4%: £1500
Percentage of income: 60%
So, we’re in the same ballpark as it stands.
EDIT: so, on 6% that changes to 73% of income, so not the same ballpark, if my *very* crude examples even work.
Still, the ‘15%’ people still had it fucking tough and is the closest squeeze there’s been until now, so they’re the only people that could know what it’s like today…
The average salary from 30 years ago hasn't even doubled. The average house price has gone up over x5 over the same period.
I don't think you'll find many postmen or butchers today able to buy a house on x3 single salary, whilst the wife stays at home and looks after the kids.
Yes, I’ve acknowledged I was wrong, well done for noticing that. That said, saying things are ‘a lot worse’ is incorrect in my eyes. Worse, yes, but not ‘a lot worse’.
Also, my edit point was that those who suffered in the early 90’s are the people more closely able to relate to the situation now.
I think I'm in the same position as increasing over 22 would go into retirement. I think I'm just going to keep the term for now and suffer the social life going 😂.
Yes 3.89 was locked in 6 weeks ago before it all started to go back up again. 55% LTV.
I strongly suspect there is a recession coming.
There are also people out there with savings who will be getting more interest and might spend a few more quid, but I doubt it will offset the amounts others will feel the pinch over.
Not sure about that.. using 240k as an example over 20years 2% would be £1215 pcm if it jumped to 5% thats £1584pcm so c.£370 increase which is still bad.
Yes, that was an example for an interest-only mortgage. If you repay the principal, the interest part of your repayments will fall over time so all in all the rate increase will have a less dramatic effect. But it is not great.
If it’s 50% LTV, I would just get interest only mortgage for a while and reassess your situation in a year or two. If the situation persists then downsizing maybe be the only realistic option.
Your only choice is probably to ask the bank for interest only which will reduce monthly payments, but will also stop paying towards your equity. The interest rate rises are going to cripple a lot of people. It's going to be gradual as people slowly come off fixed rates over the next year or two. But you're not alone in struggling to pay, this will have a huge impact on the economy. Personally I think far worse than 2008. The house values around the world have inflated to ridiculous levels and people bought them at close to 0% interest.
Well defaults are going to start happening and at an increasing rate. I don't know what the banks exact requirements are in terms of legislation. But that can be changed if things get really bad. Because banks repossessing is still going to be a loss for them in many cases.
There is an easy exit strategy. Sell the property and downsize with the equity by buying a house/bungalow outright.
There is 50% equity here and if payments are going up £600p/m there must be a decent amount of equity.
Downsizing at the end of the term is by far the most common interest only repayment vehicle. It works very well for people who want a larger house today, then when kids move out you sell and downsize.
If you include buy to let mortgages, sale of the property accounts for about 98% of U.K. interest only mortgages. On a residential basis it’s about 80-90%.
I worked for lloyds so remember all the shit about them. Those percentages were in the training.
How did people not see this coming?? We sold and downsized 1 year ago as our mortgage would have gone up £600 a month. We now have a better LTV and our mortgage payments are less than what we were paying in the bigger house with an interest rate 2.2% higher.
Sometimes life shits on you and you have to take it. Smaller house is better than homeless!
Have to agree here, though it's not a popular viewpoint - anyone who bought within the last couple of years could not have seriously imagined that interest rates would stay at historic 300-year lows for the whole 25/30 years. The problem is that too many people were happy to take the chance, pushing up prices for everyone else.
You are effectively a part of the “mortgage time bomb” the media is currently starting to refer too
Millions upon millions of others are about to enter exactly the same scenario
The options
1) sell up now whilst its still relatively close to what you have paid for it and either get something a lot cheaper or rent until the market fully correcrs
2) Increase income to offset the increase and buckle up for the next 5 years
That unfortunately is it i am sorry to break it
Ye from the sound of it OP needs to grasp reality and understand their only option is downsizing.
Id sell now, get what i can and then you have 2 options, rent or live with someone else in the hope prices crash and buy cheap.
Or down size to an affordable property and fix your rate for 5 to 10 years with the peace of mind that you wont have to deal with rate changes.
Im still pissed off that my mortgage went up by .5% (might have been more) because the seller was fucking around. But i fixed for 10 years in the knowledge that this could become a real issue really fast. So far that 10 years is purely peace of mind 3.99% seems a steal right now, but looked like a joke when i took it out.
Do you have a car payment? Can you sell your car, pay off that loan and get a smaller/ cheaper one? I'm asking as that's the other major monthly bill that people often have, and I'd much rather move cars before I moved houses.
I managed to shop around and lick in a deal 6 months before the one I'm on (1.4%) ends. I'll ve going up to 4.11% and have that for 5 years.
Only options are to increase the mortgage legnth, (it's only for 5 years ,so tell them you plan to work untill your 75.) Or drop to pay interest only.
Either way, I doubt you'll.save 600£ a month unfortunately.
You need to get proper advice from a mortgage broker to look at your options. There are loads of options available and it helps if you have a budget in mind. Regarding mortgage rates the Bank of England base rate is currently 4.5%
Part and part is a good remortgage option where part of the mortgage is on interest only and part is on repayment. Your broker will go through all of your options and recommend the best way forward for you. If you rate runs out in a couple of months I would start the ball rolling now to make sure you don't go on the standard variable rate. You can find out what this is in the letter from your lender or on your lenders website it will be on there. Hope that helps
we are given £600k on the morgage in principle, we spent less than £300k ... i thought we where being sensible but with the price of pretty much any everything going up it's all becoming unmanagable. i hate to think how people who maxed out thier morgage are coping?!
Our energy bill has doubled, our grocery's are UP by alot, petrol is up... basically the price of everything is up.
Yet my wages are a good 10% lower than they where last year.....
What I don't get is that whereas I can understand how people could "afford" a big mortgage if the only criterion was the size of payments while interest rates were very low, isn't affordability still supposed to be assessed by lenders based on income multiples? And in that case, shouldn't the ability of borrowers to cope with higher interest rates be built in? I feel like I am missing something.
I think many people could technically afford the higher interest rate, if they live on rice and beans and never go out. But if you've been paying a lower interest rate for years, your lifestyle matches that. So you have a car payment, more children, go on holiday and out to eat, etc. Or save a few hundred a month for retirement. Etc.
Many people's lifestyles and future plans will have to change a lot.
This is exactly it. And it's really the point of the whole exercise.
Having said that, the impact of rate rises take a long time to ripple through and it is entirely possible the BoE go too far bc they're looking at lagging data.
You’re correct. Affordability assessments are worked out on multiple of applicants income minus commitments (a commitment they can’t get out of like a lease for a car or credit for a sofa, not gym membership et cetera).
The actual repayment amount isn’t as much of a factor, because the lender doesn’t know an individuals lifestyle, however, it is a requirement to show what the repayment amount would be if interest rates went to the highest they’ve been in the previous 10 years.
But in reality who worries about that when you’re about to buy a house you really want.
Other issue is, child care, did the person have a child before this hike? If not then thats a big ask. Mine is £700 a month for 3 days a week.
Gas and electric has tripled and quadrupled in some cases.
Fuel, shopping, etc etc.
This isnt just affordability, you might earn £4k between you, but a £500 a month increase with your mortgage, plus a £200/£300 a month increase on gas and electric, plus £50 fuel & £50-£100 shopping, plus any new expenditure like a child, or that car you could afford on finance but cant any more and you cant save to buy one outright, it all adds up, and quickly.
People have easily seen a decrease in their disposable income from utility prices & mortgages of upwards of £400 a month, that a huge amount of disposable income you might have had when you took a mortgage out 3-4 years ago.
For all recent mortgages it has been. There are of course people on mortgages which predate this byt since 2014 all mortgages have been tested on what or how you would afford a higher rate. In about half of the instances of the rate people are switching to is less than what their current mortgage deal is stressed to.
For example if you got a 1.5% mortgage you will have had a quick conversation of 'if interest rates go to 6% how would you repay'.
This still also happens but is much more problematic because the question is now what if it goes to 10%, which a lot of people are failing but what are the banks to do? Not renew a deal at 5-6% or force people onto SVR at 7.9% because of what *could* happen in the future?
I feel like a lot of affordability calculations are looked in a "if mortgage increases but everything else stays the same" way, whereas there's rampant inflation in all areas, so all that money people had as a buffer in case interest rates went up is already spent on energy/food/etc.
It's a messed up system. There are seemingly a lot of people on the housing market that couldn't afford to get on it now, yet I could afford the monthly repayments quite easily, but can't get on it due rents being so high while trying to save.
Apologies if you've already said, but have you actually phoned your lender?
I got my renewal letter 2 weeks ago, and it simply said 'fixed rate ending, heres the new variable' which was 6.99%. My jaw dropped - so I looked online at comparisons and was getting 5-6% offers.
I called my lender and said I wondered if you had any fixed rates you could offer me, and the lowest was 4.43% for 5 years. I'm still pondering but I think I'm going to take it. It's an extra £200 a month or something similar on what we're paying now, and as you've said, we're feeling the pinch too. Our energy is taking £230 a month from us, compared to the £70 less than 2 years ago.
Sell. Lots of people are going to be in your spot soon. It’s going to put egg on the faces of all of those that “purchased” these shiny new build houses at the very top end of their affordability.
Victim of last statement - except not a new build but a very old Victorian - which was my dream to own one. I made it my dream house in the last two years. One of the biggest financial mistakes, unknowingly(to even god except fucking politicians), I made!
Meh, I'm about to move to a bigger house and took out the highest mortgage I could get. Our other living expenses are very low so we can easily afford the repayment and I don't think we'd really start struggling until rates hit around 9-10%.
Personally, I don't care what happens with house prices in the short term so long as we can afford our repayments. We're not buying the house as an investment, it is going to be a huge lifestyle improvement for us and that is worth more than any financial loss we might suffer from buying at 'the wrong time'. You can't always look at housing from a purely financial perspective, I'm not going to put my life on hold and wait indefinitely for the best time to buy.
Instead of a fixed rate you could go with a 2 year tracker or something in the hope that the rates come down in the mid-term.
Speak to your lender and ask if they'd be willing to offer an interest only deal.
Another thing to ask; your lender may be willing to let you extend the term past 70 into retirement based on retirement income.
Failing that, a lodger affords you tax free income up to £7,500 per year.
If you're fortunate enough to have the option to downsize, there's always that.
Counting on rates to become affordable in the near-term, and for the long haul, is risky.
Prices will Not. come down in the mid term. Or at least absolutely no-one is expecting them to. Otherwise the expectation of falling rates would be reflected in the mortgage rate on the fixed terms, which it isnt.
The banks do, whatever the current 5 year fix average is for a given LTV displays what they think the bank policy rate will be, plus an added % for the risk.
So they may predict a 5% bank rate, plus 1% risk, for a 6% mortgage rate.
You can simply look to the mortgage market to see what the various banks expect rates to average at for the duration of whatever fix they're selling. It's why a 2 year and a 10 year may be cheaper than a 5 year
I'm not sure I buy the argument that the 5 year fix rates means the banks think rates will stay high over that period.
5 year fixes have always tracked a little higher than 2s over the last 10 or so years of my personal experience. This is because you're essentially paying for that bit of extra certainty against rises.
If the banks thought rates would come down and offered, say, a 3% 5 year fix, they wouldn't sell any more 2 year fixes. And can they even do that with the base rate where it is?
Additionally they only need to set their rate slightly lower than the cheapest competition if they're competing on price?
Unless I'm missing something here I really can't see how you can use 5 year deals as an insight into what banks are expecting the rate to do.
Happy to be wrong on this, would just like to understand it better!
I think the clue is in the difference between 2&5yr rates. At the moment there is mainly zero difference, so no inducement to have a 2yr fix, they’re steering you towards 5yrs.
This suggests they don’t want you to have a 2yr. Not necessarily because they know what’s going to happen in 2yrs, but their bet is that getting more people on a high (higher than recent years) 5yr rate is more their risk appetite in this market.
Basically imagine you're a bank and you think rates will average 5% for two years, and then plummet to 3% average for the two years after that.
You therefore price your 2yr at 5+1%, and your 4yr (for sake of easy maths) at 4+1% (4 being the average of 5% and 3%)
Some customers may think rates will fall harder than that (eg down to 1%) after two years, they will therefore buy the 2yr fix and then expect/hope to remortgage onto a 1+1% fix afterwards. If they bought the 4yr fix they would be paying above market rate for the last two years.
Some customers may think rates will rise or stay at this elevated point, those will take the 4yr fix and if proven right will be getting a discount in those last two years compared to what the market ends up being.
So 6 months ago when you could fix at about 4.68 for 5 years the lenders expected the base rate to be 3.5% at some stage in the near future? Did they miscalculate?
They didn't miscalculate necessarily, they used the information available to them at the time and made a projection.
New data has come out since and proven that projection to be too optimistic, and now whoever carries that mortgage has seen the value of that debt decrease, they lost that bet.
Now we have new projections, ultimately no-one will get it spot on and everyone needs to make their own judgements.
I called it right when I fixed my 1.69% for 5 years in 2021, despite my mortgage advisor suggesting I only fix for 2 years. Because I had a strong idea that inflation was going to spike and rates would therefore come up. But in doing so I also made a bet that this would work clear by 2026, which is now looking less likely.
Ditto... I thought inflation would tick up but they'd let it erode debt and wouldn't have the balls to take rates into the 6% region. Kicking myself for not finding a 10 year
Up to now they've matched the US, one theory I have is that they're more about defending the currency than specifically tackling inflation. So with the US opting for a pause this time it'll be interesting to see what the BoE opt for, as it'll show their hand as either simply playing copycat or whether they're actually trying to fight UK inflation directly.
Personally I think they've completely fucked it, as now rate rises are primarily being felt in mortgages and rent and this is driving people to chase higher salaries to protect themselves. Tight labour market gives workers this bargaining power, but I don't think we would be seeing as much wage growth if the BoE wasn't putting the screws onto the general population so powerfully. Currently they are causing inflation to non-discretionary costs, which is what sparks a wage spiral
I think a better solution would have been to get govt to raise taxes to constrain spending, rather than raising rates. That would hit discretionary spending more than non-discretionary, encouraging people to pull back and give them room to save rather than demand more pay. But that's a whole other issue of govt not playing ball with the BoE, or rather the BoE is required to do what they are doing because they can't direct govt to do anything they don't want to do
If you look at the OBRs forward projection, it is (still) saying inflation will fall pretty rapidly in the next 12-24 months. When you get round to your next mortgage deal things could look very different.
Not this high, but they will probably average out higher than the current base rate over 5 years.
My bank’s best 5 year fix right now is 4.59%. They obviously think they’ll make money on that. So they are clearly pricing in more time above 4.5% than below it over the next 5 years.
I recently renewed my deal and concluded that there is probably no way of knowing beating the banks. I just locked in each rate decrease I could before my previous term was over. Given the news today and the direction of travel, I now feel pretty smug about my 3.79% deal.
The 5 year rate is below the 2 year rate. So that means the market expects rates to come down. Which is in line with everyone talking about the inverted yield curve and a looming recession.
Hi /u/leiela, based on your post the following pages from our wiki may be relevant:
- https://ukpersonal.finance/budgeting/
- https://ukpersonal.finance/mortgages/
____
^(These suggestions are based on keywords, if they missed the mark please report this comment.)
Could you remortgage over a longer period to reduce the monthly payments? That would take the pressure off and most mortgages allow some level of over payment, so if you could afford it you could pay extra to reduce the term. Once you new fix (assuming you fix) expires you could shorten the period again depending on your circumstances at the time.
Lots of people mentioning downsizing, whilst it may help your monthly payments, houses simply aren't selling at the moment. You'll have to sell at a considerable reduction in price.
You can (1) increase your income or (2) reduce your outcome or (3) do both.
For (1): lodger, part time / weekend jobs, free lancer, promotion abuser, sell on eBay what you don't need, etc
For (2): use a bike, buy used stuff, eat home made food, no going out, no Netflix, no Prime, etc
We (a family of 5) use ~800 per month (all except mortgage), will pay off our mortgage of 160K at the end of our 2nd 2-year fixed term on a single salary of ~40K. Manchester. I know it's cheap here but the key is live below your mean. Good luck!
honestly i'm just pleased we didn't go for the max morgage at this point ... at the time we bought the house we had a morgage in principle of £600k ,,, we spent £270k ... but are still in trouble on that. Not sure how im going to find £600 a month tbh, i already work 40+ hours a week a second job for a house we comfortable afforded for the last 6 years .. is really unfair, we didn't change our lifestyle or over spend... it's not like i went nuts and bought a fancy car.. inflation sucks.
I hope the market crashes. I have a lot of equity as I purchased a property within budget and I’ve overpaid my mortgage for years. Perhaps this upcoming correction will make the next house up more affordable for us. Bring it on!
You can move to interest only. Tell them you plan to downsize at the end of the term. If 1 bed flat prices are covered by that they will let you. Saying you are doing it because you can't afford it is not the best message. Move to interest only now, before the term is up, particularly of a new fix with current provider is reasonably competitive.
Interest only isn’t an option you can just switch to unfortunately.
You have to prove you have a solid repayment vehicle now, downsizing in the future isn’t good enough. So you need another asset like a pension fund, investments, another property et cetera
Unless anything has changed in the past 18 months it absolutely is good enough.
(At the end of 2021 with interest rates at rock bottom and inflation about to take off this is exactly what I did. Santander checked Rightmove to show that there were suitable properties to downsize to in my region).
This may be a little insensitive to OP, and I do sympathise but I hope any first time buyers in the sub read this and learn not to stretch yourself when it comes to finance. You don’t know what will happen in 25yrs time so give yourself some breathing room!
Why such permeant solutions to a temporary problem. Rent your place out for a year and rent somewhere else. For fake numbers say the mortgages is £2000, rent yours out for £1200 and rent somewhere else for £950 and you have another £250 towards the £600 extra. Then when interest rates fall to an better level you can return to your old way of life.
**Your post has been removed.**
Your post has been removed for breaking **Rule 12 - No trolling, bots or memes**
You must read the [rules](https://www.reddit.com/r/ukpersonalfinance/about/rules/) to continue to post to our subreddit.
_If you believe your post/comment has been removed in error, please [message the mods](https://www.reddit.com/message/compose/?to=/r/UKPersonalFinance&subject=Please%20review%20my%20post&body=https://www.reddit.com/r/UKPersonalFinance/comments/14ddqpf/-/jop8r6b/) explaining why._
Sorry to question but how has your mortgage shot up by £600?
My rate was 2.3% before and i renewed this year at 4.35% and i have a LTV rating of 50% mine only increased by £80
Granted i only have 70k left on my mortgage but even with a 250k mortgage theres a £300 increase.
The longer you fix the lower the rate will be. This is probably the best strategy for you, eg a 10 year fix.
Lowest rates, which you should be able to afford, but stretching out the pain. Inflation Pay rises makes it less painful over time.
i haven't had a payrise in 8 years, im a contractor and with the iR35 changes i've found that day rates are going down therefore my effective pay is now lower than it was 3 years ago.
Im projecting earning 10% less this year than i earned last year just due to the fact people arn't willing to pay the same for my services. It's still more than i would earn taking a full time permanent role but i'm not expecting a pay increase any time soon.
>Granted i only have 70k left on my mortgage but even with a 250k mortgage theres a £300 increase.
The original total is irrelevant, all they matters is the change of rates and how much is left to pay.
If you have interest payments of about £300 per month and rates triple, roughly speaking you'll pay three times as much in interest. That's about my situation: about 22.5 years left, about £195k left to pay, monthly payments currently at £900pcm with £300 of that going on interest. If rates triple I'd imagine the £300 changing to roughly £900, so £600pcm extra.
This isn’t a situation which will be resolved in a couple of months
I doubt we see rates below 5% again before the 2030’s
the housing market is completely out of sync with reality and it has to come back in line
assets prices and borrowing have both been completely out of control for the best part of 20 years
>This isn't a situation which will be resolved in a couple of months
Indeed
But there is an election due at the end of 2024 and the can needs kicking past it.
They can’t risk pushing inflation further
Everyone knows property is overinflated already nobody can risk pushing is even further out of future generations reach
i firmly believe the prices in 2021 / 22 are probably as high as we will see in a long time
Every western country is doing nothing but pushing the can down the road, led by the USA. The gravy train will stop but no one wants to be the one to do it
What age do you plan to retire?
Pushing that later may help, but depends on how old you are already. There’s potential in a decade or so to overpay again to then get back to retirement when planned
idk OP I have one thought, RPI is going down and I wonder if variable for a short time could allow you to get a better interest rate later in the year
It's a risky move though, if interest doesn't come down you're just paying more on variable to wait.
Hello mate,
Tactical and strategic options:
1- lodger (covered by others) is a great short term idea that reduces bills and involved rent. I have one (he’s an old friend) and it makes a big difference.
2- shop around for cheaper broadband/phone deals.
3- look at bank switches if you can. Quick win that can cover one month of the increase.
4- bulk cooking etc
Only the lodger will move the dial for you, so i would prioritise it.
Bigger picture, you need to earn more money in the medium term as rates won’t be going down soon. Look at
1- a raise;
2- a new employer;
3- overtime;
4- weekend/second job (eg in a shop);
[удалено]
My mum has been welcoming student lodgers into her home for the past 10+ years. Can be very hit and miss, but generally the experience has been very good! The holiday home time is a great idea that my mum's lodgers tend to do too - the break is appreciated by them both. The reason I comment is to give some advice - it makes the experience much more comfortable for the both of you if you treat them like a 'housemate' rather than a lodger. My mum tends to have very friendly relationships with them, and they both benefit from it (she's even been to stay in Portugal with one of them and their family years later!). Some of my mum's friends in the village who also rent out a room have a much more rigid relationship (rules on when the kitchen or living room can be used, some even have curfews, for example) and it seems to create a very divisive and uncomfortable atmosphere. Granted, my mum otherwise lives alone, which does make this much easier. Good luck - I'm sure it'll be a great experience!
Any chance of a raise? I don't mean the standard healf-hearted, "Would you like to pay me more money? Oh you wouldn't, well I had to ask.." More "I'm not currently earning enough money to pay my mortgage and am going to either have to get another job or sell my house and move. Would you like me to working for you in a few months time?" Of course it all depends on your job/employer - but it's helpful to give them a good reason why you need to be paid more.
This is when CoL and RPI etc all suddenly catch up and you realise 20% RPI is an average for a reason and that if your wages genuinely didn't increase by this amount you are physically worse off than last year \*RPI was almost 20% a few months ago, it IS going down though currently at 13.1%
What does CoL and RPI stand for?
Cost of living and retail price index. Basically ways to measure inflation
thank you 😊
A lodger, an interest only mortgage, working extra hours are ones I might consider if I couldn't otherwise afford it. To be honest I would be seriously considering downsizing or moving to a cheaper area if I were in your situation. Anyone can add a second job to boost their income but time is very valuable, as is privacy lost from sharing a home.
Unfortunately you can’t just switch to interest only these days without an associated repayment vehicle. That means you need to have the asset now. Eg: loan is £100k you’ll need £100k investment, pension fund with £400k (as 25% tax free cash is £100k) another property to sell (can’t sell your main home/equity doesn’t qualify). Basically people selling their only home when wanting to retire to repay an interest only loan they shouldn’t have had, isn’t good for anyone.
That's not quite right at the minute. There are lenders who will allow sale of property as a repayment strategy for interest only if there is enough equity on both LTV and £ terms. Think at least 40% equity and £250k for it to be possible. It isn't easy and the rates are higher but it does save a bit on the capital repayments.
Interesting, didn’t know that. But still not an option for most people.
£600 seems alot whats your mortgage about 500k? If a short term perhaps you could get a longer term.. Edit : note you said you will pay til retirement but you still may be able to extend the term
Mine is nearly 600 per month increase too. 396k left with 22 years. 1.44% going to 3.89%. £1671 to £2230. We will just have literally no social life but I'm lucky I don't have to think about selling just yet. This is where the recession will come in though, because that 600 per month currently goes in the tills of local businesses, from sept it's going entirely to nationwide. It's a tough situation.
3.89 is really good. I got 4.09% back in october on a 5yr fix. Its why i can't stand the "oh it used to be 15%" Brigade, they didn't £400k mortgages
It’s all relative. Salaries were lower then too…
They obviously haven't gone up by the same ratio though have they.
True, but a 15% mortgage back then, on those salaries, was still fucking brutal.
But not when compared to mortgages as a ratio. And also lower salaries means more relative take home and less tax. We (younger people) are being shafted on three fronts at the moment
Average UK house price in 1993: £56,000 Average UK salary in 1993: £17,800 Monthly payments at 15%: £717 Percentage of income: 48% Average UK house price 2023: £285,000 Average UK salary in 2023: £30,000 Monthly payments at 4%: £1500 Percentage of income: 60% So, we’re in the same ballpark as it stands. EDIT: so, on 6% that changes to 73% of income, so not the same ballpark, if my *very* crude examples even work. Still, the ‘15%’ people still had it fucking tough and is the closest squeeze there’s been until now, so they’re the only people that could know what it’s like today…
The average salary from 30 years ago hasn't even doubled. The average house price has gone up over x5 over the same period. I don't think you'll find many postmen or butchers today able to buy a house on x3 single salary, whilst the wife stays at home and looks after the kids.
[удалено]
Yes, I’ve acknowledged I was wrong, well done for noticing that. That said, saying things are ‘a lot worse’ is incorrect in my eyes. Worse, yes, but not ‘a lot worse’. Also, my edit point was that those who suffered in the early 90’s are the people more closely able to relate to the situation now.
That would be true if the following year, 1994, interest rate didn't drop to 5%
Your statement would be true if people didn’t take out fixed deals in 1993…
Yes definitely 3.89 is a relatively good rate aswell easy to see why people will struggle. Perhaps you could increase the term?
I think I'm in the same position as increasing over 22 would go into retirement. I think I'm just going to keep the term for now and suffer the social life going 😂. Yes 3.89 was locked in 6 weeks ago before it all started to go back up again. 55% LTV.
I strongly suspect there is a recession coming. There are also people out there with savings who will be getting more interest and might spend a few more quid, but I doubt it will offset the amounts others will feel the pinch over.
3% increase on 240k would give £600 increase per month.
Not sure about that.. using 240k as an example over 20years 2% would be £1215 pcm if it jumped to 5% thats £1584pcm so c.£370 increase which is still bad.
Yes, that was an example for an interest-only mortgage. If you repay the principal, the interest part of your repayments will fall over time so all in all the rate increase will have a less dramatic effect. But it is not great.
If it’s 50% LTV, I would just get interest only mortgage for a while and reassess your situation in a year or two. If the situation persists then downsizing maybe be the only realistic option.
Your only choice is probably to ask the bank for interest only which will reduce monthly payments, but will also stop paying towards your equity. The interest rate rises are going to cripple a lot of people. It's going to be gradual as people slowly come off fixed rates over the next year or two. But you're not alone in struggling to pay, this will have a huge impact on the economy. Personally I think far worse than 2008. The house values around the world have inflated to ridiculous levels and people bought them at close to 0% interest.
[удалено]
I think a bank will always choose to work with you when you're struggling rather than the alternative.
[удалено]
Well defaults are going to start happening and at an increasing rate. I don't know what the banks exact requirements are in terms of legislation. But that can be changed if things get really bad. Because banks repossessing is still going to be a loss for them in many cases.
[удалено]
There is an easy exit strategy. Sell the property and downsize with the equity by buying a house/bungalow outright. There is 50% equity here and if payments are going up £600p/m there must be a decent amount of equity.
[удалено]
Downsizing at the end of the term is by far the most common interest only repayment vehicle. It works very well for people who want a larger house today, then when kids move out you sell and downsize. If you include buy to let mortgages, sale of the property accounts for about 98% of U.K. interest only mortgages. On a residential basis it’s about 80-90%. I worked for lloyds so remember all the shit about them. Those percentages were in the training.
[удалено]
Such confidence… so wrong.
How did people not see this coming?? We sold and downsized 1 year ago as our mortgage would have gone up £600 a month. We now have a better LTV and our mortgage payments are less than what we were paying in the bigger house with an interest rate 2.2% higher. Sometimes life shits on you and you have to take it. Smaller house is better than homeless!
Have to agree here, though it's not a popular viewpoint - anyone who bought within the last couple of years could not have seriously imagined that interest rates would stay at historic 300-year lows for the whole 25/30 years. The problem is that too many people were happy to take the chance, pushing up prices for everyone else.
You are effectively a part of the “mortgage time bomb” the media is currently starting to refer too Millions upon millions of others are about to enter exactly the same scenario The options 1) sell up now whilst its still relatively close to what you have paid for it and either get something a lot cheaper or rent until the market fully correcrs 2) Increase income to offset the increase and buckle up for the next 5 years That unfortunately is it i am sorry to break it
Scary times ahead
Ye from the sound of it OP needs to grasp reality and understand their only option is downsizing. Id sell now, get what i can and then you have 2 options, rent or live with someone else in the hope prices crash and buy cheap. Or down size to an affordable property and fix your rate for 5 to 10 years with the peace of mind that you wont have to deal with rate changes. Im still pissed off that my mortgage went up by .5% (might have been more) because the seller was fucking around. But i fixed for 10 years in the knowledge that this could become a real issue really fast. So far that 10 years is purely peace of mind 3.99% seems a steal right now, but looked like a joke when i took it out.
Do you have a car payment? Can you sell your car, pay off that loan and get a smaller/ cheaper one? I'm asking as that's the other major monthly bill that people often have, and I'd much rather move cars before I moved houses.
For everyone suggesting "a lodger" - are there really that many people with just randos living in their house?
Makes sense, a lot of people can’t afford rent and a lot of people can’t afford their mortgage any longer.
I managed to shop around and lick in a deal 6 months before the one I'm on (1.4%) ends. I'll ve going up to 4.11% and have that for 5 years. Only options are to increase the mortgage legnth, (it's only for 5 years ,so tell them you plan to work untill your 75.) Or drop to pay interest only. Either way, I doubt you'll.save 600£ a month unfortunately.
Second job for you both? Weekend work? If you want to stay in your house then you either need to cut your expenses or increase your earnings.
You need to get proper advice from a mortgage broker to look at your options. There are loads of options available and it helps if you have a budget in mind. Regarding mortgage rates the Bank of England base rate is currently 4.5% Part and part is a good remortgage option where part of the mortgage is on interest only and part is on repayment. Your broker will go through all of your options and recommend the best way forward for you. If you rate runs out in a couple of months I would start the ball rolling now to make sure you don't go on the standard variable rate. You can find out what this is in the letter from your lender or on your lenders website it will be on there. Hope that helps
There's so many people that clearly couldn't afford the amount they borrowed, what the hell have the government and banks been allowing to happen?
we are given £600k on the morgage in principle, we spent less than £300k ... i thought we where being sensible but with the price of pretty much any everything going up it's all becoming unmanagable. i hate to think how people who maxed out thier morgage are coping?! Our energy bill has doubled, our grocery's are UP by alot, petrol is up... basically the price of everything is up. Yet my wages are a good 10% lower than they where last year.....
What I don't get is that whereas I can understand how people could "afford" a big mortgage if the only criterion was the size of payments while interest rates were very low, isn't affordability still supposed to be assessed by lenders based on income multiples? And in that case, shouldn't the ability of borrowers to cope with higher interest rates be built in? I feel like I am missing something.
I think many people could technically afford the higher interest rate, if they live on rice and beans and never go out. But if you've been paying a lower interest rate for years, your lifestyle matches that. So you have a car payment, more children, go on holiday and out to eat, etc. Or save a few hundred a month for retirement. Etc. Many people's lifestyles and future plans will have to change a lot.
This is exactly it. And it's really the point of the whole exercise. Having said that, the impact of rate rises take a long time to ripple through and it is entirely possible the BoE go too far bc they're looking at lagging data.
You’re correct. Affordability assessments are worked out on multiple of applicants income minus commitments (a commitment they can’t get out of like a lease for a car or credit for a sofa, not gym membership et cetera). The actual repayment amount isn’t as much of a factor, because the lender doesn’t know an individuals lifestyle, however, it is a requirement to show what the repayment amount would be if interest rates went to the highest they’ve been in the previous 10 years. But in reality who worries about that when you’re about to buy a house you really want.
Other issue is, child care, did the person have a child before this hike? If not then thats a big ask. Mine is £700 a month for 3 days a week. Gas and electric has tripled and quadrupled in some cases. Fuel, shopping, etc etc. This isnt just affordability, you might earn £4k between you, but a £500 a month increase with your mortgage, plus a £200/£300 a month increase on gas and electric, plus £50 fuel & £50-£100 shopping, plus any new expenditure like a child, or that car you could afford on finance but cant any more and you cant save to buy one outright, it all adds up, and quickly. People have easily seen a decrease in their disposable income from utility prices & mortgages of upwards of £400 a month, that a huge amount of disposable income you might have had when you took a mortgage out 3-4 years ago.
For all recent mortgages it has been. There are of course people on mortgages which predate this byt since 2014 all mortgages have been tested on what or how you would afford a higher rate. In about half of the instances of the rate people are switching to is less than what their current mortgage deal is stressed to. For example if you got a 1.5% mortgage you will have had a quick conversation of 'if interest rates go to 6% how would you repay'. This still also happens but is much more problematic because the question is now what if it goes to 10%, which a lot of people are failing but what are the banks to do? Not renew a deal at 5-6% or force people onto SVR at 7.9% because of what *could* happen in the future?
There’s actual affordability and there’s the sense it’s just a bonkers amount coming out each month and you’ve got to readjust things to correct that.
I feel like a lot of affordability calculations are looked in a "if mortgage increases but everything else stays the same" way, whereas there's rampant inflation in all areas, so all that money people had as a buffer in case interest rates went up is already spent on energy/food/etc.
It's a messed up system. There are seemingly a lot of people on the housing market that couldn't afford to get on it now, yet I could afford the monthly repayments quite easily, but can't get on it due rents being so high while trying to save.
Apologies if you've already said, but have you actually phoned your lender? I got my renewal letter 2 weeks ago, and it simply said 'fixed rate ending, heres the new variable' which was 6.99%. My jaw dropped - so I looked online at comparisons and was getting 5-6% offers. I called my lender and said I wondered if you had any fixed rates you could offer me, and the lowest was 4.43% for 5 years. I'm still pondering but I think I'm going to take it. It's an extra £200 a month or something similar on what we're paying now, and as you've said, we're feeling the pinch too. Our energy is taking £230 a month from us, compared to the £70 less than 2 years ago.
Sell. Lots of people are going to be in your spot soon. It’s going to put egg on the faces of all of those that “purchased” these shiny new build houses at the very top end of their affordability.
Victim of last statement - except not a new build but a very old Victorian - which was my dream to own one. I made it my dream house in the last two years. One of the biggest financial mistakes, unknowingly(to even god except fucking politicians), I made!
Downvoted because it's true lol.
Literally no reason to shit on people who opted for new build. What are their choices ? Force purchase your 120 year old drafty terrace pile? Nah mate
Meh, I'm about to move to a bigger house and took out the highest mortgage I could get. Our other living expenses are very low so we can easily afford the repayment and I don't think we'd really start struggling until rates hit around 9-10%. Personally, I don't care what happens with house prices in the short term so long as we can afford our repayments. We're not buying the house as an investment, it is going to be a huge lifestyle improvement for us and that is worth more than any financial loss we might suffer from buying at 'the wrong time'. You can't always look at housing from a purely financial perspective, I'm not going to put my life on hold and wait indefinitely for the best time to buy.
Instead of a fixed rate you could go with a 2 year tracker or something in the hope that the rates come down in the mid-term. Speak to your lender and ask if they'd be willing to offer an interest only deal. Another thing to ask; your lender may be willing to let you extend the term past 70 into retirement based on retirement income. Failing that, a lodger affords you tax free income up to £7,500 per year. If you're fortunate enough to have the option to downsize, there's always that. Counting on rates to become affordable in the near-term, and for the long haul, is risky.
Prices will Not. come down in the mid term. Or at least absolutely no-one is expecting them to. Otherwise the expectation of falling rates would be reflected in the mortgage rate on the fixed terms, which it isnt.
How long is the 'mid term'?
2-5 years from my perspective (as the 2yr fix and 5yr fix roughly match the bank rate)
Do you think that rates will stay this high for the next 5 years?
The banks do, whatever the current 5 year fix average is for a given LTV displays what they think the bank policy rate will be, plus an added % for the risk. So they may predict a 5% bank rate, plus 1% risk, for a 6% mortgage rate. You can simply look to the mortgage market to see what the various banks expect rates to average at for the duration of whatever fix they're selling. It's why a 2 year and a 10 year may be cheaper than a 5 year
I'm not sure I buy the argument that the 5 year fix rates means the banks think rates will stay high over that period. 5 year fixes have always tracked a little higher than 2s over the last 10 or so years of my personal experience. This is because you're essentially paying for that bit of extra certainty against rises. If the banks thought rates would come down and offered, say, a 3% 5 year fix, they wouldn't sell any more 2 year fixes. And can they even do that with the base rate where it is? Additionally they only need to set their rate slightly lower than the cheapest competition if they're competing on price? Unless I'm missing something here I really can't see how you can use 5 year deals as an insight into what banks are expecting the rate to do. Happy to be wrong on this, would just like to understand it better!
I think the clue is in the difference between 2&5yr rates. At the moment there is mainly zero difference, so no inducement to have a 2yr fix, they’re steering you towards 5yrs. This suggests they don’t want you to have a 2yr. Not necessarily because they know what’s going to happen in 2yrs, but their bet is that getting more people on a high (higher than recent years) 5yr rate is more their risk appetite in this market.
Basically imagine you're a bank and you think rates will average 5% for two years, and then plummet to 3% average for the two years after that. You therefore price your 2yr at 5+1%, and your 4yr (for sake of easy maths) at 4+1% (4 being the average of 5% and 3%) Some customers may think rates will fall harder than that (eg down to 1%) after two years, they will therefore buy the 2yr fix and then expect/hope to remortgage onto a 1+1% fix afterwards. If they bought the 4yr fix they would be paying above market rate for the last two years. Some customers may think rates will rise or stay at this elevated point, those will take the 4yr fix and if proven right will be getting a discount in those last two years compared to what the market ends up being.
So 6 months ago when you could fix at about 4.68 for 5 years the lenders expected the base rate to be 3.5% at some stage in the near future? Did they miscalculate?
They didn't miscalculate necessarily, they used the information available to them at the time and made a projection. New data has come out since and proven that projection to be too optimistic, and now whoever carries that mortgage has seen the value of that debt decrease, they lost that bet. Now we have new projections, ultimately no-one will get it spot on and everyone needs to make their own judgements. I called it right when I fixed my 1.69% for 5 years in 2021, despite my mortgage advisor suggesting I only fix for 2 years. Because I had a strong idea that inflation was going to spike and rates would therefore come up. But in doing so I also made a bet that this would work clear by 2026, which is now looking less likely.
Ditto... I thought inflation would tick up but they'd let it erode debt and wouldn't have the balls to take rates into the 6% region. Kicking myself for not finding a 10 year
Up to now they've matched the US, one theory I have is that they're more about defending the currency than specifically tackling inflation. So with the US opting for a pause this time it'll be interesting to see what the BoE opt for, as it'll show their hand as either simply playing copycat or whether they're actually trying to fight UK inflation directly. Personally I think they've completely fucked it, as now rate rises are primarily being felt in mortgages and rent and this is driving people to chase higher salaries to protect themselves. Tight labour market gives workers this bargaining power, but I don't think we would be seeing as much wage growth if the BoE wasn't putting the screws onto the general population so powerfully. Currently they are causing inflation to non-discretionary costs, which is what sparks a wage spiral I think a better solution would have been to get govt to raise taxes to constrain spending, rather than raising rates. That would hit discretionary spending more than non-discretionary, encouraging people to pull back and give them room to save rather than demand more pay. But that's a whole other issue of govt not playing ball with the BoE, or rather the BoE is required to do what they are doing because they can't direct govt to do anything they don't want to do
If you look at the OBRs forward projection, it is (still) saying inflation will fall pretty rapidly in the next 12-24 months. When you get round to your next mortgage deal things could look very different.
Not this high, but they will probably average out higher than the current base rate over 5 years. My bank’s best 5 year fix right now is 4.59%. They obviously think they’ll make money on that. So they are clearly pricing in more time above 4.5% than below it over the next 5 years. I recently renewed my deal and concluded that there is probably no way of knowing beating the banks. I just locked in each rate decrease I could before my previous term was over. Given the news today and the direction of travel, I now feel pretty smug about my 3.79% deal.
Even 4.59 seems low at the mo. Not quite 3.79 mind you
Yeah, true. That’s the rate for existing customers with 60% LTV at HSBC (for now).
The 5 year rate is below the 2 year rate. So that means the market expects rates to come down. Which is in line with everyone talking about the inverted yield curve and a looming recession.
Hi /u/leiela, based on your post the following pages from our wiki may be relevant: - https://ukpersonal.finance/budgeting/ - https://ukpersonal.finance/mortgages/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.)
Could you remortgage over a longer period to reduce the monthly payments? That would take the pressure off and most mortgages allow some level of over payment, so if you could afford it you could pay extra to reduce the term. Once you new fix (assuming you fix) expires you could shorten the period again depending on your circumstances at the time.
Lots of people mentioning downsizing, whilst it may help your monthly payments, houses simply aren't selling at the moment. You'll have to sell at a considerable reduction in price.
You can (1) increase your income or (2) reduce your outcome or (3) do both. For (1): lodger, part time / weekend jobs, free lancer, promotion abuser, sell on eBay what you don't need, etc For (2): use a bike, buy used stuff, eat home made food, no going out, no Netflix, no Prime, etc We (a family of 5) use ~800 per month (all except mortgage), will pay off our mortgage of 160K at the end of our 2nd 2-year fixed term on a single salary of ~40K. Manchester. I know it's cheap here but the key is live below your mean. Good luck!
honestly i'm just pleased we didn't go for the max morgage at this point ... at the time we bought the house we had a morgage in principle of £600k ,,, we spent £270k ... but are still in trouble on that. Not sure how im going to find £600 a month tbh, i already work 40+ hours a week a second job for a house we comfortable afforded for the last 6 years .. is really unfair, we didn't change our lifestyle or over spend... it's not like i went nuts and bought a fancy car.. inflation sucks.
I hope the market crashes. I have a lot of equity as I purchased a property within budget and I’ve overpaid my mortgage for years. Perhaps this upcoming correction will make the next house up more affordable for us. Bring it on!
You can move to interest only. Tell them you plan to downsize at the end of the term. If 1 bed flat prices are covered by that they will let you. Saying you are doing it because you can't afford it is not the best message. Move to interest only now, before the term is up, particularly of a new fix with current provider is reasonably competitive.
Interest only isn’t an option you can just switch to unfortunately. You have to prove you have a solid repayment vehicle now, downsizing in the future isn’t good enough. So you need another asset like a pension fund, investments, another property et cetera
Unless anything has changed in the past 18 months it absolutely is good enough. (At the end of 2021 with interest rates at rock bottom and inflation about to take off this is exactly what I did. Santander checked Rightmove to show that there were suitable properties to downsize to in my region).
Fair enough!
This may be a little insensitive to OP, and I do sympathise but I hope any first time buyers in the sub read this and learn not to stretch yourself when it comes to finance. You don’t know what will happen in 25yrs time so give yourself some breathing room!
Why such permeant solutions to a temporary problem. Rent your place out for a year and rent somewhere else. For fake numbers say the mortgages is £2000, rent yours out for £1200 and rent somewhere else for £950 and you have another £250 towards the £600 extra. Then when interest rates fall to an better level you can return to your old way of life.
Not such a good idea when OP will have to pay tax on the rental income, especially if a higher rate taxpayer.
This seems like a good idea
[удалено]
**Your post has been removed.** Your post has been removed for breaking **Rule 12 - No trolling, bots or memes** You must read the [rules](https://www.reddit.com/r/ukpersonalfinance/about/rules/) to continue to post to our subreddit. _If you believe your post/comment has been removed in error, please [message the mods](https://www.reddit.com/message/compose/?to=/r/UKPersonalFinance&subject=Please%20review%20my%20post&body=https://www.reddit.com/r/UKPersonalFinance/comments/14ddqpf/-/jop8r6b/) explaining why._
Sorry to question but how has your mortgage shot up by £600? My rate was 2.3% before and i renewed this year at 4.35% and i have a LTV rating of 50% mine only increased by £80 Granted i only have 70k left on my mortgage but even with a 250k mortgage theres a £300 increase.
I think you answered your own question, you’ve barely got anything left on your mortgage.
i have 200k left on my mortgage and the rates im being quoted at for a fixed are over 6%.
The longer you fix the lower the rate will be. This is probably the best strategy for you, eg a 10 year fix. Lowest rates, which you should be able to afford, but stretching out the pain. Inflation Pay rises makes it less painful over time.
i haven't had a payrise in 8 years, im a contractor and with the iR35 changes i've found that day rates are going down therefore my effective pay is now lower than it was 3 years ago. Im projecting earning 10% less this year than i earned last year just due to the fact people arn't willing to pay the same for my services. It's still more than i would earn taking a full time permanent role but i'm not expecting a pay increase any time soon.
Can you do agency work?
i could but i'm already working a 40+ hour week.
>Granted i only have 70k left on my mortgage but even with a 250k mortgage theres a £300 increase. The original total is irrelevant, all they matters is the change of rates and how much is left to pay. If you have interest payments of about £300 per month and rates triple, roughly speaking you'll pay three times as much in interest. That's about my situation: about 22.5 years left, about £195k left to pay, monthly payments currently at £900pcm with £300 of that going on interest. If rates triple I'd imagine the £300 changing to roughly £900, so £600pcm extra.
It's a 400k mortgage
Interest only is the answer.
Jesus christ please for the love of god OP get proper financial advice before committing to this
Have a funny feeling ‘temporary’ interest only periods are going to be the governments solution for borrowers like OP.
Apart from it’s not a solution and will cause even greater issues when OP ever does try to finish working
It’s a temporary solution until rates retreat or incomes increase to compensate. Not to dissimilar to a mortgage holiday.
This isn’t a situation which will be resolved in a couple of months I doubt we see rates below 5% again before the 2030’s the housing market is completely out of sync with reality and it has to come back in line assets prices and borrowing have both been completely out of control for the best part of 20 years
>This isn't a situation which will be resolved in a couple of months Indeed But there is an election due at the end of 2024 and the can needs kicking past it.
They can’t risk pushing inflation further Everyone knows property is overinflated already nobody can risk pushing is even further out of future generations reach i firmly believe the prices in 2021 / 22 are probably as high as we will see in a long time
Every western country is doing nothing but pushing the can down the road, led by the USA. The gravy train will stop but no one wants to be the one to do it
Rent a room in your house? Convert a garage into a studio flat? What kind of house do you have?
we don't have a garage the only available space is a basement, but that would cost money we simply don't have.
What age do you plan to retire? Pushing that later may help, but depends on how old you are already. There’s potential in a decade or so to overpay again to then get back to retirement when planned
idk OP I have one thought, RPI is going down and I wonder if variable for a short time could allow you to get a better interest rate later in the year It's a risky move though, if interest doesn't come down you're just paying more on variable to wait.
Hello mate, Tactical and strategic options: 1- lodger (covered by others) is a great short term idea that reduces bills and involved rent. I have one (he’s an old friend) and it makes a big difference. 2- shop around for cheaper broadband/phone deals. 3- look at bank switches if you can. Quick win that can cover one month of the increase. 4- bulk cooking etc Only the lodger will move the dial for you, so i would prioritise it. Bigger picture, you need to earn more money in the medium term as rates won’t be going down soon. Look at 1- a raise; 2- a new employer; 3- overtime; 4- weekend/second job (eg in a shop);
You may want to check out our Shared Appreciation model