Mortgage Rate Rises

@platinum87 in Feb 2021 I bought a new house with my wife for £550k. The deposit we put down was around £160k based on the £110k increase in price on my old house.

As of today, the estimate price of the new house is £675k according to Zoopla.

£125k increase in 20 months! Absolutely ****ing insane.

So that’s a £232k increase in paper money by doing absolutely nothing over 7 years.

Fixed the current mortgage in August for 5 years at 3.09%… as mentioned, that’s now at 5.19%. Cost approximately £5k in [early repayment charges, plus the increase in interest rate for period between (I) remortgage date and (II) former expiry of old rate]
 
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So we are back to 1989, I remember it well, changed my life in many very significant ways, changed my confidence in the stability of things immensely.
In the end I have to say things turned out OK, lots of valuable lessons learnt.

No matter who you are you can not take job security for granted.
When you have no job, little in savings and house prices have tanked a mortgage just becomes a nightmare.
You can't live where you want to, you have to go where the work is.
The world will not support you, you are on your own.
Buy at the right time fine, buy at the wrong time you're stuffed.

Overtime house prices do always go up, but there are hiccups along the way.

I am aware of 2 people who recently sold, those sales have fallen through.

One had no chain, was reasonably priced, the 'investor ' offered the asking price.

Personally I am struggling to believe prices will drop, but could be financial crisis 2 with no QE just QT.
 
93 pounds a day? Does.

I thought it sounded a lot. But we put in 1800 to the joint account every month. Half of that goes to mortgage. Rest food and bills and petrol.

It is about right to keep the balance stable.

Still 30 a day to find.

And a holiday for. Just over 1000 works. Out 30 a day.

And there it is. 93 pounds a day easily.
 
Handy aspect of working for my company for 10 years is that if crap really hit the fan and I got made redundant, that is 10 weeks redundancy pay.

Should be able to find a new job within 2.5 months, LinkedIn is constantly harrassing me with job offers.
 
413x said:
93 pounds a day? Does.

I thought it sounded a lot. But we put in 1800 to the joint account every month. Half of that goes to mortgage. Rest food and bills and petrol.

It is about right to keep the balance stable.

Still 30 a day to find.

And a holiday for. Just over 1000 works. Out 30 a day.

And there it is. 93 pounds a day easily.
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Yeah easy. We put near £1500/month each into joint account and it’s 2 of us in the house. So £93/day is easy. Most of it goes on mortgage.
 
I fixed in January at 1.41% for 2 years, annoyingly, I only did that as we plan to move in 2 years once my daughter has secured her place in the same school as my son. The plan is still to move, but jeez, knowing I could have fixed at 1.79 for 10 years at a time like this makes my stomach churn, but then on the flip side, our mortgage is much smaller than any house value we plan to move in to so either way, we'd have had to take some or all of the mortgage out at a higher rate
 
platinum87 said:
Aside from peace of mind, the only other reason is a lack of self discipline.

I.e. Pay off your mortgage first, because if you offset it, you will eventually have £25k, then reach a mid-life crisis and buy a convertible for no reason.

That being said, i would say you should invest your money in the stockmarket, rather than overpaying, and not in savings or whatever offset mortgage products exist.
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I think a lack of self discipline is different from:
1) Forgetting what your plan was 10 years down the line
2) Your life circumstances changing compared to your decision 10 years ago

I've read instances of people whose cheap mortgage deals expired just as that money they'd been squirrelling away in S&S dropped when markets suffered a dip. Now you're in a situation where you're gambling that it'll pick up again ahead of your mortgage interest piling up aren't you?

All the above also presumes you don't lose your job, and can't find another one before whatever emergency fund you have is wiped out.
 
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I don't want to be paying too much when I'm young. Life can be a bit **** when you're old. And of course you can die any time.

Its easy to forget to live a bit when you're young. Don't mean paying for PCP cars etc but expiriences and doing things.
 
krooton said:
Handy aspect of working for my company for 10 years is that if crap really hit the fan and I got made redundant, that is 10 weeks redundancy pay.

Should be able to find a new job within 2.5 months, LinkedIn is constantly harrassing me with job offers.
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I work in IT and the thing I don't like about LinkedIn "job offers" for my sector is that the offers aren't offers at all, they're recruiters wanting to throw my CV at people hoping they'll bite and interview me. A lot of the time, the positions don't exist, or they're already at an advanced stage of filling them, but they're advertised to get you on their books. That's IT anyway.
 
Those of us who have been around a while will caution in regards how easy it is to walk into another job during recession, at least a similar paying job

Jobs become very much like houses, many will hunker down and not move whilst things are bad, better the job you know, better the fact you will receive some redundancy, better the fact they cannot just let you go as "its not working out" etc

As vacancies dry up, competition goes up, suddenly there is someone willing to do the job for less when asked "what sort of salary do you want" at interview, this supresses wages as well as coming with increased competition.
 
Karl said:
I work in IT and the thing I don't like about LinkedIn "job offers" for my sector is that the offers aren't offers at all, they're recruiters wanting to throw my CV at people hoping they'll bite and interview me. A lot of the time, the positions don't exist, or they're already at an advanced stage of filling them, but they're advertised to get you on their books. That's IT anyway.
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I quit LinkedIN years ago, I used to get 50 messages a week from recruiters. A lot of them were fake.
 
Slam62 said:
So we are back to 1989, I remember it well, changed my life in many very significant ways, changed my confidence in the stability of things immensely.
In the end I have to say things turned out OK, lots of valuable lessons learnt.

No matter who you are you can not take job security for granted.
When you have no job, little in savings and house prices have tanked a mortgage just becomes a nightmare.
You can't live where you want to, you have to go where the work is.
The world will not support you, you are on your own.
Buy at the right time fine, buy at the wrong time you're stuffed.

Overtime house prices do always go up, but there are hiccups along the way.

I am aware of 2 people who recently sold, those sales have fallen through.

One had no chain, was reasonably priced, the 'investor ' offered the asking price.

Personally I am struggling to believe prices will drop, but could be financial crisis 2 with no QE just QT.
Click to expand...

I had a similar experience in the 2008 crash.. worked up tons of debt, a 100% northern rock mortgage, had a newish car and then everything including my marriage fell apart and I was so close to going bankrupt for years.

Now I've had the same car for basically 10 years despite my wages going up considerably and I save and save and save.

It's easy to sneer at people who are just living by the current rules, the real sneering should be reserved for the people who live through something and learn nothing IMO!
 
krooton said:
Handy aspect of working for my company for 10 years is that if crap really hit the fan and I got made redundant, that is 10 weeks redundancy pay.

Should be able to find a new job within 2.5 months, LinkedIn is constantly harrassing me with job offers.
Click to expand...

Just a comment on this, the statutory requirement for redundancy payouts is capped at a weekly rate of £571. If your company folds, you'll only get the bare minimum from the Government so 10 x your weekly pay is £5710.
 
Life's lessons,

Always pay the mortgage first and always overpay if you can. (think how much money you may have saved overpaying when rates were cheap).

Never use expensive credit to buy fast depreciating assets, holidays, cars etc.

I cannot think of one thing we bought on credit excepting the house.
 
dLockers said:
WTF

L&G found that households have average savings of £2,431 and debts of £610. Accounting for average daily expenses of £93, this would see them run out of money in less than three weeks if they were to lose their income.

No1 I wish I had savings of £2431 with debts of £610
No2 Who TF is spending £93 a day?
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I would estimate that the issue here is that averages are massively skewed by the wealth inequality in this country. I would estimate the median household would be in a much worse position than that and would have thought using a median would be a much better method of representing figures like that.
 
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