Mortgage Rate Rises

[fez]

I'm really struggling to overpay the mortgage as we need a new bathroom and kitchen. My goal is to be mortgage free before 55, but when you need new carpets, kitchen, bathroom etc etc with the usual wear and tear items it's a real struggle.

Not sure how people are doing it.

A lot of people spend a lot of money on things they don't need. It all adds up very quickly. New phone every year or 2. There is £1000. Couple of holidays a year. Theres a few thousand pounds or more. New car or car on finance. Theres another £4k/year. Eating out or getting takeaways 4-5 times a month, Theres another £2k/year. Expensive hobbies, clothes etc.

Its very easy to have two people on identical salaries and have one spending £10k more than the other on "luxury goods" without even really thinking about it. People are funny with money. We know far too many people who plead constant poverty and yet **** money up the wall on things that we wouldn't dream of doing despite being on far better salaries. Each to their own I guess.

 

[dlockers]

A lot of people spend a lot of money on things they don't need. It all adds up very quickly. New phone every year or 2. There is £1000. Couple of holidays a year. Theres a few thousand pounds or more. New car or car on finance. Theres another £4k/year. Eating out or getting takeaways 4-5 times a month, Theres another £2k/year. Expensive hobbies, clothes etc.

Its very easy to have two people on identical salaries and have one spending £10k more than the other on "luxury goods" without even really thinking about it. People are funny with money. We know far too many people who plead constant poverty and yet **** money up the wall on things that we wouldn't dream of doing despite being on far better salaries. Each to their own I guess.

Mobile phones - 100%. I find it outrageous how willing less well off folk are to split with huge sums for the latest phone. Some even having double contracts etc.

Takeaways - also agree. It is astonishing how much these have gone up recently, and with the "app" providers taking their cut, a lot of it is just taxing the poor/lazy. I used to subscribe to meal kits (Gousto) and will probably go back to that, because whilst it is more expensive than grocery, it is a lot cheaper as a takeaway avoidance tool!

 

[glenimp617]

A lot of people spend a lot of money on things they don't need. It all adds up very quickly. New phone every year or 2. There is £1000. Couple of holidays a year. Theres a few thousand pounds or more. New car or car on finance. Theres another £4k/year. Eating out or getting takeaways 4-5 times a month, Theres another £2k/year. Expensive hobbies, clothes etc.

Its very easy to have two people on identical salaries and have one spending £10k more than the other on "luxury goods" without even really thinking about it. People are funny with money. We know far too many people who plead constant poverty and yet **** money up the wall on things that we wouldn't dream of doing despite being on far better salaries. Each to their own I guess.

Yep, they definately add up. I was talking about the big ticket items really. Hopefully after the next couple of years I can really start to make inroads.
Still plenty of time left.

 

[adam cool dude]

A lot of people spend a lot of money on things they don't need. It all adds up very quickly. New phone every year or 2. There is £1000. Couple of holidays a year. Theres a few thousand pounds or more. New car or car on finance. Theres another £4k/year. Eating out or getting takeaways 4-5 times a month, Theres another £2k/year. Expensive hobbies, clothes etc.

Its very easy to have two people on identical salaries and have one spending £10k more than the other on "luxury goods" without even really thinking about it. People are funny with money. We know far too many people who plead constant poverty and yet **** money up the wall on things that we wouldn't dream of doing despite being on far better salaries. Each to their own I guess.

I had a couple like this. They didn't buy their first house till their 40's. They were on 90k combined easy if not more which is a superb salary in this part of the country. Both were borderline alcoholics though. Up the pub several days a week and blowing all their money on take out. Always skint. I also had a senior manager who lived with his mother yet must have been on close to 80k a year!

I used to get the newest Samsung every 2 years. Now I have had the same Chinese phone for nearly 4 years now! It does the job so why replace it.

 

[fez]

Yep, they definately add up. I was talking about the big ticket items really. Hopefully after the next couple of years I can really start to make inroads.
Still plenty of time left.

I think people ignore the small things far too much thinking its the big items that kill you. Its not. We have a credit card bill that is about £1500/month on average and every time I look at it I think "how on earth are we spending that much!". Its death by a thousand cuts. 4 shops. Some insurance payment. A fix on the car. A few fuel fill ups. A takeaway. A day out. Some bits from amazon. Nothing much above £100 but it all mounts up.

Mobile phones - 100%. I find it outrageous how willing less well off folk are to split with huge sums for the latest phone. Some even having double contracts etc.

Takeaways - also agree. It is astonishing how much these have gone up recently, and with the "app" providers taking their cut, a lot of it is just taxing the poor/lazy. I used to subscribe to meal kits (Gousto) and will probably go back to that, because whilst it is more expensive than grocery, it is a lot cheaper as a takeaway avoidance tool!

Our cleaner is very much in this bracket. New iPhone, new trainers, bought 2 XL bullies for £1000 each (which through complete luck sit just under the threshold) who eat their way through about £250 of food a months. Always living on the edge.

Was in the garage the other day and the woman in front was trying to put her repair bill on finance. She was trying to put the first payment on a credit card and had to be told that you can't finance your finance with finance. Shocker, she had the latest iPhone, nails all done professionally, hair done up massively etc. Its just a way of life for some.

 

[slinxy]

I contacted Nationwide earlier and agreed to do underpayments for a bit, I have a large enough overpayment buffer to pay for the mortgage for 3 years without paying anything in at the current rates.

I decided to drop down to £100 payment instead of £0 though to counter act the interest somewhat, so basically gone to interest only.

The extra cash I don't spend will instead go into my savings and investment funds.

This makes no sense to me... whatever your interest rates are, that is the amount you are being charged at to borrow the money. Regardless how much you are paying back. It's not like they have frozen the interest they are charging you.
if you are struggling for cash, I can understand dropping the amount..

Unless this is your final mortgage... if you're not already on a higher rate, the amount you owe at the moment will be charged at the higher rate when you renew it.
Even if this is your final mortgage, I personally would perfer to pay it off as quick as possible and then maybe a few very low ones so I don't get fine for ending the contract sooner, so I can use the money when it is paid off to go on holiday.. lol

 

[MikeTheNative]

I think people ignore the small things far too much thinking its the big items that kill you. Its not. We have a credit card bill that is about £1500/month on average and every time I look at it I think "how on earth are we spending that much!". Its death by a thousand cuts. 4 shops. Some insurance payment. A fix on the car. A few fuel fill ups. A takeaway. A day out. Some bits from amazon. Nothing much above £100 but it all mounts up.



Our cleaner is very much in this bracket. New iPhone, new trainers, bought 2 XL bullies for £1000 each (which through complete luck sit just under the threshold) who eat their way through about £250 of food a months. Always living on the edge.

Was in the garage the other day and the woman in front was trying to put her repair bill on finance. She was trying to put the first payment on a credit card and had to be told that you can't finance your finance with finance. Shocker, she had the latest iPhone, nails all done professionally, hair done up massively etc. Its just a way of life for some.

This is one of the good reasons to not worry about how other people are living and just live by your own budget which you can control (with caveats of course )

No point asking how that random person can afford that shiny new car.
Answer might be a higher salary, inheritance, or simply they can't afford it and it's putting them into debt.

 

[dlockers]

I think people ignore the small things far too much thinking its the big items that kill you. Its not. We have a credit card bill that is about £1500/month on average and every time I look at it I think "how on earth are we spending that much!". Its death by a thousand cuts. 4 shops. Some insurance payment. A fix on the car. A few fuel fill ups. A takeaway. A day out. Some bits from amazon. Nothing much above £100 but it all mounts up.

This is the origin story of my finance calc. I log every. single. transaction. no matter how small. I just kept looking at large bills and thinking WTF. I then summarise it into spend categories and types of spend. I don't like automated ways of doing this as they get it wrong.

Interesting stats on my take home - I spend 70.88% on bills!

 

[jonneymendoza]

This is the origin story of my finance calc. I log every. single. transaction. no matter how small. I just kept looking at large bills and thinking WTF. I then summarise it into spend categories and types of spend. I don't like automated ways of doing this as they get it wrong.

Interesting stats on my take home - I spend 70.88% on bills!

If I stopped playing football I'd save a few quid for sure but the thing is health and fitness is just as important as groceries imo.

What do you reckon? Do you agree?

Do you agree that spending money on health and fitness is as important? It's not cheap.

Cheapest gym membership is like 30 bucks, doing a actual sport like football or tennis or whatever costs also.

Maybe you could just go running in the park I guess but if football or swimming or rock climbing indoors motivates you to get to early in the morning or after work 4 to 5 days a week then I reckon that's perfectly fine as well.

Power to you if you can just go for a jog and that helps u as that's free but not all actives that benefits your health are free!

Anyways I mentioned football because I was recently injured and couldn't play for 5 weeks and my bank account was in a healthy place.

I spend like 16 bucks a week playing twice a week.

 

[fez]

If I stopped playing football I'd save a few quid for sure but the thing is health and fitness is just as important as groceries imo.

What do you reckon? Do you agree?

Investing in your health, be it mental of physical is almost always worth the cost. If you can get 90% of the benefits for 20% of the cost then sure, trim the fat but some things cost what they cost. I like cycling and I could spend a fraction of what I do and not have a measurably worse time but I am a bit like a magpie.

 

[dlockers]

If I stopped playing football I'd save a few quid for sure but the thing is health and fitness is just as important as groceries imo.

What do you reckon? Do you agree?

Yeah definitely. Most of my health and fitness is in doing DIY. Once that dries up I'll probably take up more cycling, which'll probably be way more expensive lol.

 

[glenimp617]

I think people ignore the small things far too much thinking its the big items that kill you. Its not. We have a credit card bill that is about £1500/month on average and every time I look at it I think "how on earth are we spending that much!". Its death by a thousand cuts. 4 shops. Some insurance payment. A fix on the car. A few fuel fill ups. A takeaway. A day out. Some bits from amazon. Nothing much above £100 but it all mounts up.

I bet they do. I'm probably one of those really frugal types who records everything in excel. Can budget months, even years in advance.
Nothing on credit cards or any buy now pay laters. Don't get me wrong, whilst I don't spend anything on drink,takeaways,going out etc etc I do treat myself now and again....usually an expensive one off thing like a vr headset

It's a balance, but if I didn't need a new bathroom and kitchen I could pay it off that much quicker.

 

[Mercenary Keyboard Warrior]

This makes no sense to me... whatever your interest rates are, that is the amount you are being charged at to borrow the money. Regardless how much you are paying back. It's not like they have frozen the interest they are charging you.
if you are struggling for cash, I can understand dropping the amount..

Unless this is your final mortgage... if you're not already on a higher rate, the amount you owe at the moment will be charged at the higher rate when you renew it.
Even if this is your final mortgage, I personally would perfer to pay it off as quick as possible and then maybe a few very low ones so I don't get fine for ending the contract sooner, so I can use the money when it is paid off to go on holiday.. lol

I suspect when his low fixed rate comes to an end he will see what rate he can get then, and either liquidate savings/investments and pay that off (so end up better off than overpaying now), or if the rate he can get then is also good, rinse repeat

 

[adam cool dude]

Yeah definitely. Most of my health and fitness is in doing DIY. Once that dries up I'll probably take up more cycling, which'll probably be way more expensive lol.

Cycling is great. I started after I got a herniated disc last summer and it fixed me up good. I spent around a grand on my bike but much prefer that then paying for gym and having to interact with vain shallow people. I do around 50 miles a week. You can go crazy with bikes yes but I do it more for fitness then any type of goal. The bike I have is more than adequate for my goals. I also stick to back roads and stay away from lycra.

 

[malachi]

This is one of the good reasons to not worry about how other people are living and just live by your own budget which you can control (with caveats of course )

No point asking how that random person can afford that shiny new car.
Answer might be a higher salary, inheritance, or simply they can't afford it and it's putting them into debt.

Thats how many people live now in the UK. Stuff everything on credit, pay the minimum clocking up debt.

 

[R.P.L]

This is one of the good reasons to not worry about how other people are living and just live by your own budget which you can control (with caveats of course )

No point asking how that random person can afford that shiny new car.
Answer might be a higher salary, inheritance, or simply they can't afford it and it's putting them into debt.

That's all well and good until you try to make an informed decision on what the government's policy should be. Am I to assume that all those people who complain about the cost of living and wealth inequality are spunking their cash on useless crap?

 

[HungryHippos]

I suspect when his low fixed rate comes to an end he will see what rate he can get then, and either liquidate savings/investments and pay that off (so end up better off than overpaying now), or if the rate he can get then is also good, rinse repeat

Right, essentially it's a reverse loan at 1% where I can earn 5% on whatever I don't overpay

I'll go back to paying normal + overpaying when my fixed rate ends, so about 2 years away.

 

[MikeTheNative]

That's all well and good until you try to make an informed decision on what the government's policy should be. Am I to assume that all those people who complain about the cost of living and wealth inequality are spunking their cash on useless crap?

No, that's why I put "This is one of the good reasons to not worry about how other people are living and just live by your own budget which you can control (with caveats of course )"

Caveats being that you can plan as well as possible at the time yet something left field can pop up and really screw you.

 

[fez]

I bet they do. I'm probably one of those really frugal types who records everything in excel. Can budget months, even years in advance.
Nothing on credit cards or any buy now pay laters. Don't get me wrong, whilst I don't spend anything on drink,takeaways,going out etc etc I do treat myself now and again....usually an expensive one off thing like a vr headset

It's a balance, but if I didn't need a new bathroom and kitchen I could pay it off that much quicker.

Suggestion. Design a new bathroom/kitchen in VR and just put the headset on before you go in those rooms. Obviously I would suggest you put the toilet in roughly the same place in VR as it is in the real world but apart from that, go nuts

I also stick to back roads and stay away from lycra.

You're missing out. The lycra is the best bit!

Also, thats how everyone starts. "I'll never wear lycra". 6 months later they are head to toe in lycra, blasting through red lights for fun, flipping off innocent motorists who give them metres of space and not paying any taxes!

 

[413x]

I'm really struggling to overpay the mortgage as we need a new bathroom and kitchen. My goal is to be mortgage free before 55, but when you need new carpets, kitchen, bathroom etc etc with the usual wear and tear items it's a real struggle.

Not sure how people are doing it.

Do you need to overpay the mortgage?
Do you need all that new stuff?

Its mega expensive that sort of thing. I certainly couldn't do both. New kitchens and things like seem constantly impossible to justify on my priority list. It would have to be a bomb site for me to spend that much.