Property crash, just maybe it really is different this time (Part 3)

[HousePriceMania]

4 hours ago, Frank Hovis said:

 

Has to be that surely?

It only takes a cursory online search about MMoA to realise that any sensible buyer would not touch that method of auction with a bargepole.

Put it this way....even mumsnet are saying avoid them.

[Royston]

On 07/04/2024 at 09:34, One percent said:

Problem is, you can’t catch the bus from bay due to all the prats with walking sticks pretending they are some great outdoorsy person. 

The funniest "Walts" I ever saw was actually back in the early 90's so long before the current "outdoorsy" craze...

A couple preparing to go for a walk up Kinder Scout in the Peak District in May... with ice axes and crampons attached to their rucksacks

And to top it off, when I passed where they'd parked less than 3 hours later their car had already gone.. that sure was some epic expedition they embarked upon.

[One percent]

Just now, Royston said:

The funniest "Walts" I ever saw was actually back in the early 90's so long before the current "outdoorsy" craze...

A couple preparing to go for a walk up Kinder Scout in the Peak District in May... with ice axes and crampons attached to their rucksacks

And to top it off, when I passed where they'd parked less than 3 hours later their car had already gone.. that sure was some epic expedition they embarked upon.

Well at least they were (over) prepared. The number of morons in T-shirts that need to be rescued is a wonder to behold.  It’s similar to the number of morons who cannot read a tide table and who also can’t read the sea in front of them. The inshore lifeboat is forever plucking them off the rocks. Mind, at least it keeps the RNLI too busy to be used as a gimmigrant taxi service. 

[lovelyboy]

1 hour ago, One percent said:

Well at least they were (over) prepared. The number of morons in T-shirts that need to be rescued is a wonder to behold.  It’s similar to the number of morons who cannot read a tide table and who also can’t read the sea in front of them. The inshore lifeboat is forever plucking them off the rocks. Mind, at least it keeps the RNLI too busy to be used as a gimmigrant taxi service. 

 

[spygirl]

Investors lose hope of rapid US interest rate cuts this year

Markets price in more than two quarter-point cuts, compared with more than six expected at start of 2024

Phew, just as well the oE is independent and can do what it wants ....

How many week? months?? before the UK media n talking heads realise UJK rates are not going down much, if at all.

 

 

[sancho panza]

I think the likes of Nationwide are in big trouble.

Daily Mail 9/4/24

Households in crisis: Mortgage brokers reveal how borrowers are coping with higher rates

• Every month 150,000 mortgage holders reach the end of cheap fixed deals 
• Many find they're moving to rates that are two, three or even four times higher 
• In this six-part series we reveal how British homeowners are coping 

Since mortgage rates began rising, many of the nine million mortgaged households in the UK and close to two million landlords have been faced with the prospect of much higher payments.

Before that, many had become accustomed to ultra-low interest rates for more than a decade.

In this six-part series, we look at how much more people are really paying when they take out a new mortgage, how households are coping and if a mortgage crisis is afoot.

Higher interest rates have led to higher mortgage costs for many - especially those who have remortgaged over the past 18 months. 

Over the course of 2024, 1.6 million mortgage borrowers will roll off their cheaper fixed rate mortgages, according to UK Finance - many of whom will currently be on a rate of 2 per cent or less.

Next year, many more will join them as their current two-year, three year or five year fixed rates come to end.

The average rate on new mortgages is close to 5 per cent, according to Bank of England figures. 

 

Someone moving from a 2 per cent rate to a five per cent rate may well notice a big dent in their budget. 

On a £200,000 mortgage being repaid over 20 years they would see their monthly payments jump by more than £300 a month from £1,012 to £1,320.

Mortgage advisor Chris Sykes says some people adjusted their lifestyles in line with rock-bottom interest rates, and are now finding the higher rates too much to absorb. 

'It is a mortgage crisis for some, while for others it's painful, but not the end of the world,' he says. 

'As time has continued, most people have been able to adjust mentally to what is going to happen to their payments, so I'm finding conversations a lot easier now than they were 12 months ago. 

'I have clients whose financial situation has improved since they took out the mortgage. 

'I've had some clients come to me initially as first-time buyers on £30,000 each and now they're both high flying professionals on £75,000 each.' 

'But some customers are definitely struggling. People often build their lifestyle around their income and expenditures, so once one of those expenditures change in a big way it can have a big impact on someone's life.

'They may have taken a car on finance as they felt they can afford it, but now can't with the mortgage. They may have sent their child to private school or to a more expensive nursery than they might have done had rates been where they are today.

'There is no harm speaking to your broker even years before your remortgage so you know where your payments will sit and what to expect when it is time to refinance.' 

We spoke with five mortgage brokers to find out how they are advising people who are struggling to cope thanks to a jump in mortgage costs. 

Increasing the mortgage term 

One popular method for cutting monthly payments is lengthening the term of the mortgage, according to brokers.

The mortgage term is the number of years someone agrees to repay their mortgage for. This used to commonly be 25 years but on new mortgages is now often 30 years or even longer.

By lengthening the term of a mortgage, a borrower spreads their repayments over a longer period of time and therefore reduces the monthly costs.

However, it will ultimately mean paying more in the long run - unless they are able to overpay or shorten the term further down the line to ma

For example, someone with a £200,000 mortgage paying 5 per cent interest over 20 years would face monthly repayments of £1,320, paying a total of £316,876 over the lifespan of the mortgage.

Conversely, someone with a £200,000 mortgage paying the same interest rate over a 40-year term would face monthly repayments of £965. 

However, they would pay £463,136 over the lifespan of the mortgage: £146,260 more than on a 20 year term.

While their interest rate would likely change during this time if they remortgaged or fell on to their lender's standard variable rate, the principle remains the same.

George Smith, a mortgage broker at LDN Finance recently advised a couple whose two-year fix was about to expire.

'When they first took out their mortgage two years ago, their intention was to undertake substantial renovations to increase the property's value and consequently increase their equity stake in the property,' he explains. 

'To cover the renovation costs in the interim, the clients took out personal loans with the plan to consolidate the debt into their mortgage upon renewal.

'Although they still had 33 years remaining on their mortgage term, the sharp increase in rates, from 1.64 per cent to 5.99 per cent, led me to recommend they extend their term to the maximum possible, adding seven years of mortgage interest payments. 

'Despite this extension, the clients faced a monthly payment increase of over £1,165. 

'This was before even considering the additional burden of the personal loans they had taken out, initially expecting to merge them into the mortgage.

'In response to this, the clients have cut back substantially on their living expenses wherever possible to maintain their monthly commitments. 

'Looking ahead, they are now planning to refinance in two years' time when their current deal comes up for renewal where hopefully they can look to again reduce their mortgage term.'

Moving to an interest-only mortgage

Another way some borrowers are reducing their monthly payments is to switch to an interest-only mortgage.

Denni Tyson, mortgage and protection adviser at Henchurch Lane Financial Services said he recently had a client who was desperate to cut their monthly costs.

'They had come to the end of their two-year fixed product and were now facing increased costs of nearly £1,100 per month,' said Tyson. 'Both were public servants and the mortgage was in excess of £500,000. 

'We looked at whether they could do a part interest-only and part repayment mortgage, essentially moving a portion of their mortgage to an interest-only basis.

'Despite warning them they would end up paying more in the long run by opting for interest only, the couple said they had no choice.'

George Smith of LDN Finance says he recently advised a couple with a similar predicament.

'My clients had initially locked into a rate of approximately 1.4 per cent two years ago, they now found themselves confronted with rates hovering around 5.15 per cent,' he explains. 

'With a mortgage structured on a capital repayment basis and boasting over £200,000 in property equity, the upcoming hike would mean a jump in monthly payments from around £1,800 to over £2,800. 

'This financial burden, coupled with childcare expenses and the escalating cost of living, was deemed unfeasible by the couple.

'I proposed they move a portion of their mortgage to an interest-only basis, albeit temporarily, to cushion the blow of heightened rates. 

'By doing so, we effectively mitigated the increase from around £2,800 to £2,350, allowing the clients to continue chipping away at the capital, albeit at a slower pace. 

'This adjustment provided them with a measure of reassurance, affording them breathing room in the face of potential future rises in living costs.

'Looking ahead, the clients are now looking to review as their rate approaches its conclusion in December 2025. 

'They aim to take advantage of potentially lower rates and transition back to full capital repayment.'

Look at forbearance options 

Forbearance is a process that can help those who may be struggling to pay their mortgage.  

The mortgage lender will typically arrange for the temporary pause of mortgage payments or allow for smaller payments. 

Cut back on monthly costs elsewhere

According to brokers, some people are having to take stock of their incomings and outgoings by reviewing bank and credit card statements, their savings, debts and investments to budget and cut back where necessary. 

Sell up and move on

Perhaps the most drastic option for those who feel they will no longer be able to afford the monthly payments on their home is to sell up.

Asking family for help 

Just as many first-time buyers receive a helping hand from the bank of mum and dad to get on the ladder, so to may they also have to rely on them to remain on the ladder, given the jump in higher interest rates.

 

[HousePriceMania]

37 minutes ago, spygirl said:

 

How many week? months?? before the UK media n talking heads realise UJK rates are not going down much, if at all.

 

 

When's the election ?

The week after that would be my guess.

37 minutes ago, spygirl said:

Investors lose hope of rapid US interest rate cuts this year

 

 

 

Investors have been coining it in since rates rose.

Dont they mean property pyramid scam fools ?

[spunko]

27 minutes ago, sancho panza said:

'I proposed they move a portion of their mortgage to an interest-only basis, albeit temporarily, to cushion the blow of heightened rates. 

'By doing so, we effectively mitigated the increase from around £2,800 to £2,350, allowing the clients to continue chipping away at the capital, albeit at a slower pace. 

'This adjustment provided them with a measure of reassurance, affording them breathing room in the face of potential future rises in living costs.

'Looking ahead, the clients are now looking to review as their rate approaches its conclusion in December 2025. 

'They aim to take advantage of potentially lower rates and transition back to full capital repayment.'

"I've been missold my interest-only emergency mortgage" claims in 3, 2, 1.....

[HousePriceMania]

26 minutes ago, sancho panza said:

I think the likes of Nationwide are in big trouble.

 

 

Someone sent me this yesterday, can you see if it is correct ?

If it is, then yes, I'd agree....

 

 

 

 

[sancho panza]

2 hours ago, HousePriceMania said:

Someone sent me this yesterday, can you see if it is correct ?

If it is, then yes, I'd agree....

 

 

 

 

thats fractionalr reserve ledning for you.inherently,ti's not so mucht eh system but the elverage that is the issue.

Builignsocs have differnt reproting standrards to listed banks

it's more about the quality of the assets than the size of the balcne sheet and NW has a shocking BTL book.As Ive said nit eh banking therad I thinktbere's an element of them mrging with virgin that will mean if they werent too big troo fail before,they are now.

2 hours ago, spunko said:

"I've been missold my interest-only emergency mortgage" claims in 3, 2, 1.....

Indeed.

I think the issue here is that in the first round of rate hikes people can move their term out,they can cut back on lifes luxuries,but then if the cost of lving keeps moving up and their wages dont they will need a second round of mesures and quite simply I think msot borrowers abilities to meet a second round of measures will be much reduced and some will give up the ghost.

with all these thigns,I think there will come a point when it's clear that prices are falling and then I think we'll see more peoplegive up.

quite when that will be Im not sure.

but the banks balance sheets look prepped for a hosing.

[HousePriceMania]

19 minutes ago, sancho panza said:

thats fractionalr reserve ledning for you.inherently,ti's not so mucht eh system but the elverage that is the issue.

Builignsocs have differnt reproting standrards to listed banks

it's more about the quality of the assets than the size of the balcne sheet and NW has a shocking BTL book.As Ive said nit eh banking therad I thinktbere's an element of them mrging with virgin that will mean if they werent too big troo fail before,they are now.

Indeed.

I think the issue here is that in the first round of rate hikes people can move their term out,they can cut back on lifes luxuries,but then if the cost of lving keeps moving up and their wages dont they will need a second round of mesures and quite simply I think msot borrowers abilities to meet a second round of measures will be much reduced and some will give up the ghost.

with all these thigns,I think there will come a point when it's clear that prices are falling and then I think we'll see more peoplegive up.

quite when that will be Im not sure.

but the banks balance sheets look prepped for a hosing.

I'd not be sad to see it collapse and not be bailed out.  Would focus a lot of peoples minds.

[spygirl]

6 hours ago, sancho panza said:

I think the likes of Nationwide are in big trouble.

Daily Mail 9/4/24

Households in crisis: Mortgage brokers reveal how borrowers are coping with higher rates

• Every month 150,000 mortgage holders reach the end of cheap fixed deals 
• Many find they're moving to rates that are two, three or even four times higher 
• In this six-part series we reveal how British homeowners are coping 

Since mortgage rates began rising, many of the nine million mortgaged households in the UK and close to two million landlords have been faced with the prospect of much higher payments.

Before that, many had become accustomed to ultra-low interest rates for more than a decade.

In this six-part series, we look at how much more people are really paying when they take out a new mortgage, how households are coping and if a mortgage crisis is afoot.

Higher interest rates have led to higher mortgage costs for many - especially those who have remortgaged over the past 18 months. 

Over the course of 2024, 1.6 million mortgage borrowers will roll off their cheaper fixed rate mortgages, according to UK Finance - many of whom will currently be on a rate of 2 per cent or less.

Next year, many more will join them as their current two-year, three year or five year fixed rates come to end.

The average rate on new mortgages is close to 5 per cent, according to Bank of England figures. 

 

Someone moving from a 2 per cent rate to a five per cent rate may well notice a big dent in their budget. 

On a £200,000 mortgage being repaid over 20 years they would see their monthly payments jump by more than £300 a month from £1,012 to £1,320.

Mortgage advisor Chris Sykes says some people adjusted their lifestyles in line with rock-bottom interest rates, and are now finding the higher rates too much to absorb. 

'It is a mortgage crisis for some, while for others it's painful, but not the end of the world,' he says. 

'As time has continued, most people have been able to adjust mentally to what is going to happen to their payments, so I'm finding conversations a lot easier now than they were 12 months ago. 

'I have clients whose financial situation has improved since they took out the mortgage. 

'I've had some clients come to me initially as first-time buyers on £30,000 each and now they're both high flying professionals on £75,000 each.' 

'But some customers are definitely struggling. People often build their lifestyle around their income and expenditures, so once one of those expenditures change in a big way it can have a big impact on someone's life.

'They may have taken a car on finance as they felt they can afford it, but now can't with the mortgage. They may have sent their child to private school or to a more expensive nursery than they might have done had rates been where they are today.

'There is no harm speaking to your broker even years before your remortgage so you know where your payments will sit and what to expect when it is time to refinance.' 

We spoke with five mortgage brokers to find out how they are advising people who are struggling to cope thanks to a jump in mortgage costs. 

Increasing the mortgage term 

One popular method for cutting monthly payments is lengthening the term of the mortgage, according to brokers.

The mortgage term is the number of years someone agrees to repay their mortgage for. This used to commonly be 25 years but on new mortgages is now often 30 years or even longer.

By lengthening the term of a mortgage, a borrower spreads their repayments over a longer period of time and therefore reduces the monthly costs.

However, it will ultimately mean paying more in the long run - unless they are able to overpay or shorten the term further down the line to ma

For example, someone with a £200,000 mortgage paying 5 per cent interest over 20 years would face monthly repayments of £1,320, paying a total of £316,876 over the lifespan of the mortgage.

Conversely, someone with a £200,000 mortgage paying the same interest rate over a 40-year term would face monthly repayments of £965. 

However, they would pay £463,136 over the lifespan of the mortgage: £146,260 more than on a 20 year term.

While their interest rate would likely change during this time if they remortgaged or fell on to their lender's standard variable rate, the principle remains the same.

George Smith, a mortgage broker at LDN Finance recently advised a couple whose two-year fix was about to expire.

'When they first took out their mortgage two years ago, their intention was to undertake substantial renovations to increase the property's value and consequently increase their equity stake in the property,' he explains. 

'To cover the renovation costs in the interim, the clients took out personal loans with the plan to consolidate the debt into their mortgage upon renewal.

'Although they still had 33 years remaining on their mortgage term, the sharp increase in rates, from 1.64 per cent to 5.99 per cent, led me to recommend they extend their term to the maximum possible, adding seven years of mortgage interest payments. 

'Despite this extension, the clients faced a monthly payment increase of over £1,165. 

'This was before even considering the additional burden of the personal loans they had taken out, initially expecting to merge them into the mortgage.

'In response to this, the clients have cut back substantially on their living expenses wherever possible to maintain their monthly commitments. 

'Looking ahead, they are now planning to refinance in two years' time when their current deal comes up for renewal where hopefully they can look to again reduce their mortgage term.'

Moving to an interest-only mortgage

Another way some borrowers are reducing their monthly payments is to switch to an interest-only mortgage.

Denni Tyson, mortgage and protection adviser at Henchurch Lane Financial Services said he recently had a client who was desperate to cut their monthly costs.

'They had come to the end of their two-year fixed product and were now facing increased costs of nearly £1,100 per month,' said Tyson. 'Both were public servants and the mortgage was in excess of £500,000. 

'We looked at whether they could do a part interest-only and part repayment mortgage, essentially moving a portion of their mortgage to an interest-only basis.

'Despite warning them they would end up paying more in the long run by opting for interest only, the couple said they had no choice.'

George Smith of LDN Finance says he recently advised a couple with a similar predicament.

'My clients had initially locked into a rate of approximately 1.4 per cent two years ago, they now found themselves confronted with rates hovering around 5.15 per cent,' he explains. 

'With a mortgage structured on a capital repayment basis and boasting over £200,000 in property equity, the upcoming hike would mean a jump in monthly payments from around £1,800 to over £2,800. 

'This financial burden, coupled with childcare expenses and the escalating cost of living, was deemed unfeasible by the couple.

'I proposed they move a portion of their mortgage to an interest-only basis, albeit temporarily, to cushion the blow of heightened rates. 

'By doing so, we effectively mitigated the increase from around £2,800 to £2,350, allowing the clients to continue chipping away at the capital, albeit at a slower pace. 

'This adjustment provided them with a measure of reassurance, affording them breathing room in the face of potential future rises in living costs.

'Looking ahead, the clients are now looking to review as their rate approaches its conclusion in December 2025. 

'They aim to take advantage of potentially lower rates and transition back to full capital repayment.'

Look at forbearance options 

Forbearance is a process that can help those who may be struggling to pay their mortgage.  

The mortgage lender will typically arrange for the temporary pause of mortgage payments or allow for smaller payments. 

Cut back on monthly costs elsewhere

According to brokers, some people are having to take stock of their incomings and outgoings by reviewing bank and credit card statements, their savings, debts and investments to budget and cut back where necessary. 

Sell up and move on

Perhaps the most drastic option for those who feel they will no longer be able to afford the monthly payments on their home is to sell up.

Asking family for help 

Just as many first-time buyers receive a helping hand from the bank of mum and dad to get on the ladder, so to may they also have to rely on them to remain on the ladder, given the jump in higher interest rates.

 

So many lines. So much bollocks.

The average rate on new mortgages is close to 5 per cent, according to Bank of England figures. 

Someone moving from a 2 per cent rate to a five per cent rate may well notice a big dent in their budget. 

I'd hazard a guess that anyone coming off a sub 2% fix is going to be on SVR, which uis 7%-8% rather than 5%.

My reasoning is majority taking out mortgage in last 10y will -

-Be borrowing right up to their limit.

-Prob popped a kid, so down one income, or large childcare cost.- Probably went nuts n took on extra debt, so won't be able to remortgage.

-Prob got stupid long mortgage length, so have paid fuckall off. Not under magic 70% LTV

- Bought HTB new build, so are 40% down.

 

The '300 extra' for most will be '600 extra' on SVR

 

[HousePriceMania]

from ToS.

 

 

 

It seems Fergus BTL King Wilson could get sent down today 

[spygirl]

https://www.dailymail.co.uk/sport/football/article-13291567/Ex-Man-United-star-Wes-Brown-earned-50-000-week-player-speaks-time-declared-BANKRUPT-admits-never-right-people-him.html

 

 

 

 

 

REVEALED: How Wes Brown lost his millions to end up bankrupt - bad property deals, overpaying on a farm and trying to keep up with team-mates earning SIX times as much as him

https://www.dailymail.co.uk/sport/football/article-12041075/How-Wes-Brown-lost-millions-end-bankrupt.html

A source told Mail Sport: 'It may seem like Wes was earning big money - to most people he was - but the trouble was he was also trying to keep up with the lifestyle of team-mates earning five or six times more than he was. 

'Most of his money disappeared in bad property deals. He overpaid on the farm that Leanne lives in.

 

'He spent something like £6million or £7m to buy that. They have tried to sell it but haven't managed to, even after lowering the price to £4.75m.

'Any money left is tied up in the farm. A previous property of theirs was once listed at £4.5m but took seven years to sell, finally going for £2.4million - almost half price.'

[spygirl]

Markets slash rate cut bets after US inflation rises to 3.5%

Figures exceed expectations as Federal Reserve considers how long to keep rates at 23-year high

[JoeDavola]

Bunch of small semi-detached houses near my folks seem to be going up in price at about 5% every couple of months...last couple I've seen have quite obviously been renovated by the same person judging by the decor. One was on for £200K last month, one just on today that isn't as big for £210K.

Folks going to view a bungalow this weekend so that should be amusing to see the boomer bunglow bidding frenzy that ensues!

[Bobthebuilder]

37 minutes ago, JoeDavola said:

going up in price at about 5% every couple of months

That's around 30% a year, what are you waiting for, leverage up and buy 10.

[Ash4781b]

8 hours ago, spygirl said:

https://www.dailymail.co.uk/sport/football/article-13291567/Ex-Man-United-star-Wes-Brown-earned-50-000-week-player-speaks-time-declared-BANKRUPT-admits-never-right-people-him.html

 

 

 

 

 

REVEALED: How Wes Brown lost his millions to end up bankrupt - bad property deals, overpaying on a farm and trying to keep up with team-mates earning SIX times as much as him

https://www.dailymail.co.uk/sport/football/article-12041075/How-Wes-Brown-lost-millions-end-bankrupt.html

A source told Mail Sport: 'It may seem like Wes was earning big money - to most people he was - but the trouble was he was also trying to keep up with the lifestyle of team-mates earning five or six times more than he was. 

'Most of his money disappeared in bad property deals. He overpaid on the farm that Leanne lives in.

 

'He spent something like £6million or £7m to buy that. They have tried to sell it but haven't managed to, even after lowering the price to £4.75m.

'Any money left is tied up in the farm. A previous property of theirs was once listed at £4.5m but took seven years to sell, finally going for £2.4million - almost half price.'

“Manchester United team-mates, including Wayne Rooney and current Middlesbrough boss Michael Carrick, have rallied around Brown, who is thought to be renting a modest property off current United striker Marcus Rashford 'at mates' rates”

Good old Rashford

[Ash4781b]

On 09/04/2024 at 14:38, sancho panza said:

I think the likes of Nationwide are in big trouble.

Daily Mail 9/4/24

Households in crisis: Mortgage brokers reveal how borrowers are coping with higher rates

• Every month 150,000 mortgage holders reach the end of cheap fixed deals 
• Many find they're moving to rates that are two, three or even four times higher 
• In this six-part series we reveal how British homeowners are coping 

Since mortgage rates began rising, many of the nine million mortgaged households in the UK and close to two million landlords have been faced with the prospect of much higher payments.

Before that, many had become accustomed to ultra-low interest rates for more than a decade.

In this six-part series, we look at how much more people are really paying when they take out a new mortgage, how households are coping and if a mortgage crisis is afoot.

Higher interest rates have led to higher mortgage costs for many - especially those who have remortgaged over the past 18 months. 

Over the course of 2024, 1.6 million mortgage borrowers will roll off their cheaper fixed rate mortgages, according to UK Finance - many of whom will currently be on a rate of 2 per cent or less.

Next year, many more will join them as their current two-year, three year or five year fixed rates come to end.

The average rate on new mortgages is close to 5 per cent, according to Bank of England figures. 

 

Someone moving from a 2 per cent rate to a five per cent rate may well notice a big dent in their budget. 

On a £200,000 mortgage being repaid over 20 years they would see their monthly payments jump by more than £300 a month from £1,012 to £1,320.

Mortgage advisor Chris Sykes says some people adjusted their lifestyles in line with rock-bottom interest rates, and are now finding the higher rates too much to absorb. 

'It is a mortgage crisis for some, while for others it's painful, but not the end of the world,' he says. 

'As time has continued, most people have been able to adjust mentally to what is going to happen to their payments, so I'm finding conversations a lot easier now than they were 12 months ago. 

'I have clients whose financial situation has improved since they took out the mortgage. 

'I've had some clients come to me initially as first-time buyers on £30,000 each and now they're both high flying professionals on £75,000 each.' 

'But some customers are definitely struggling. People often build their lifestyle around their income and expenditures, so once one of those expenditures change in a big way it can have a big impact on someone's life.

'They may have taken a car on finance as they felt they can afford it, but now can't with the mortgage. They may have sent their child to private school or to a more expensive nursery than they might have done had rates been where they are today.

'There is no harm speaking to your broker even years before your remortgage so you know where your payments will sit and what to expect when it is time to refinance.' 

We spoke with five mortgage brokers to find out how they are advising people who are struggling to cope thanks to a jump in mortgage costs. 

Increasing the mortgage term 

One popular method for cutting monthly payments is lengthening the term of the mortgage, according to brokers.

The mortgage term is the number of years someone agrees to repay their mortgage for. This used to commonly be 25 years but on new mortgages is now often 30 years or even longer.

By lengthening the term of a mortgage, a borrower spreads their repayments over a longer period of time and therefore reduces the monthly costs.

However, it will ultimately mean paying more in the long run - unless they are able to overpay or shorten the term further down the line to ma

For example, someone with a £200,000 mortgage paying 5 per cent interest over 20 years would face monthly repayments of £1,320, paying a total of £316,876 over the lifespan of the mortgage.

Conversely, someone with a £200,000 mortgage paying the same interest rate over a 40-year term would face monthly repayments of £965. 

However, they would pay £463,136 over the lifespan of the mortgage: £146,260 more than on a 20 year term.

While their interest rate would likely change during this time if they remortgaged or fell on to their lender's standard variable rate, the principle remains the same.

George Smith, a mortgage broker at LDN Finance recently advised a couple whose two-year fix was about to expire.

'When they first took out their mortgage two years ago, their intention was to undertake substantial renovations to increase the property's value and consequently increase their equity stake in the property,' he explains. 

'To cover the renovation costs in the interim, the clients took out personal loans with the plan to consolidate the debt into their mortgage upon renewal.

'Although they still had 33 years remaining on their mortgage term, the sharp increase in rates, from 1.64 per cent to 5.99 per cent, led me to recommend they extend their term to the maximum possible, adding seven years of mortgage interest payments. 

'Despite this extension, the clients faced a monthly payment increase of over £1,165. 

'This was before even considering the additional burden of the personal loans they had taken out, initially expecting to merge them into the mortgage.

'In response to this, the clients have cut back substantially on their living expenses wherever possible to maintain their monthly commitments. 

'Looking ahead, they are now planning to refinance in two years' time when their current deal comes up for renewal where hopefully they can look to again reduce their mortgage term.'

Moving to an interest-only mortgage

Another way some borrowers are reducing their monthly payments is to switch to an interest-only mortgage.

Denni Tyson, mortgage and protection adviser at Henchurch Lane Financial Services said he recently had a client who was desperate to cut their monthly costs.

'They had come to the end of their two-year fixed product and were now facing increased costs of nearly £1,100 per month,' said Tyson. 'Both were public servants and the mortgage was in excess of £500,000. 

'We looked at whether they could do a part interest-only and part repayment mortgage, essentially moving a portion of their mortgage to an interest-only basis.

'Despite warning them they would end up paying more in the long run by opting for interest only, the couple said they had no choice.'

George Smith of LDN Finance says he recently advised a couple with a similar predicament.

'My clients had initially locked into a rate of approximately 1.4 per cent two years ago, they now found themselves confronted with rates hovering around 5.15 per cent,' he explains. 

'With a mortgage structured on a capital repayment basis and boasting over £200,000 in property equity, the upcoming hike would mean a jump in monthly payments from around £1,800 to over £2,800. 

'This financial burden, coupled with childcare expenses and the escalating cost of living, was deemed unfeasible by the couple.

'I proposed they move a portion of their mortgage to an interest-only basis, albeit temporarily, to cushion the blow of heightened rates. 

'By doing so, we effectively mitigated the increase from around £2,800 to £2,350, allowing the clients to continue chipping away at the capital, albeit at a slower pace. 

'This adjustment provided them with a measure of reassurance, affording them breathing room in the face of potential future rises in living costs.

'Looking ahead, the clients are now looking to review as their rate approaches its conclusion in December 2025. 

'They aim to take advantage of potentially lower rates and transition back to full capital repayment.'

Look at forbearance options 

Forbearance is a process that can help those who may be struggling to pay their mortgage.  

The mortgage lender will typically arrange for the temporary pause of mortgage payments or allow for smaller payments. 

Cut back on monthly costs elsewhere

According to brokers, some people are having to take stock of their incomings and outgoings by reviewing bank and credit card statements, their savings, debts and investments to budget and cut back where necessary. 

Sell up and move on

Perhaps the most drastic option for those who feel they will no longer be able to afford the monthly payments on their home is to sell up.

Asking family for help 

Just as many first-time buyers receive a helping hand from the bank of mum and dad to get on the ladder, so to may they also have to rely on them to remain on the ladder, given the jump in higher interest rates.

 

“'By doing so, we effectively mitigated the increase from around £2,800 to £2,350, allowing the clients to continue chipping away at the capital, albeit at a slower pace. 

'This adjustment provided them with a measure of reassurance, affording them breathing room in the face of potential future rises in living costs.

'Looking ahead, the clients are now looking to review as their rate approaches its conclusion in December 2025. 

'They aim to take advantage of potentially lower rates and transition back to full capital repayment.'”

 

Bailey’s talked up rate cuts and has to deliver. I think many have built and setup  on rate cuts coming. 

[Chewing Grass]

11 minutes ago, Ash4781b said:

 

Bailey’s talked up rate cuts and has to deliver. I think many have built and setup  on rate cuts coming. 

I think the Yanks will scupper that.

[Wight Flight]

5 minutes ago, Chewing Grass said:

I think the Yanks will scupper that.

Or we still cut and tank the £.

Which it looks like the markets are expecting.

[Chewing Grass]

12 minutes ago, Wight Flight said:

Or we still cut and tank the £.

Which it looks like the markets are expecting.

I shall stock up on non-perishables and durables once more.

[Wight Flight]

Just now, Chewing Grass said:

I shall stock up on non-perishables and durables once more.

Not a totally daft idea.

[Phil]

1 hour ago, Ash4781b said:

“Manchester United team-mates, including Wayne Rooney and current Middlesbrough boss Michael Carrick, have rallied around Brown, who is thought to be renting a modest property off current United striker Marcus Rashford 'at mates' rates”

Good old Rashford

The cunt should be housing the imo’s, not ex millionaire gready financial fuckwits. 
RASHFORD YOU ARE A CUNT. SHOW SOME HUMANITY.

[roundhouse]

2 hours ago, Phil said:

The cunt should be housing the imo’s, not ex millionaire gready financial fuckwits. 
RASHFORD YOU ARE A CUNT. SHOW SOME HUMANITY.

Although cricket not footie, years ago I knew someone working for a high status cricket club. I heard how molly coddled the players were, had every aspect of life managed for them, down to buying of clothes, all shopping inc wife/partner/children presents, home improvememts, well absolutely everything. They needed to concentrate full time on cricket... to the exclusion of anything else, and to detriment of any sense of what is considered normal functioning in life. After hearing that I began to understand how some sport stars can't cope with doing stuff for themselves once their playing career is over, and tbh feel a bit sorry for them. However wealthy. Possibly changed for younger players going through clubs now, but those leaving sport 10-20 years ago, very different.

Edited April 10 by roundhouse
Cricket... not rugby. Slight difference, ahem.