Five Reasons Mortgages Are Getting Us Down
Everyone seems to be talking about mortgages at the moment, and not in a positive light. Mortgages are getting us down more than ever before.
It’s been hard enough for people to get on the property ladder at all in the past decade or two. House prices have been rising far higher than wages, so it’s tough. But over the past year things have been getting even though.
But what’s the reason mortgages are getting us down so much now?
Lenders are worried about the rising cost of living
When you get a mortgage the lender will look at what they think you can afford to repay.
The latest forecast data has suggested that inflation rates are going to stay higher for longer than anticipated. And a theory has been suggested that higher prices are becoming embedded in the UK economy. So if the prices of food, energy, fuel etc stay high then lenders will deem that everyone will have less disposable income to pay off their mortgage with.
In order to try and slow the rise in the cost of living, the Bank of England have raised interest rates for a 13th consecutive time. Rates have gone up from 4.5% to over 5% meaning further pain for those looking for mortgages, but great news for savers.
Mortgages are getting us down as lender deals are changing so quickly
Mortgage repayments are the highest monthly outgoing for most people, and with interest levels rising people are spending more time looking for the best deal.
With so many people looking for mortgages, some lenders are pulling mortgage products with little notice. HSBC pulled a mortgage deal just a few hours after opening because it had been inundated with applications.
Last minute changes to mortgage deals are stressful and may mean people have to make rash decisions on their application offers. Not something you’d want to do with such a significant loan.
Those of us remortgaging are just used to lower rates
The rise in mortgage rates over the past 12-18 months has been a shock for most people. We’ve been used to pretty low interest rates for the past decade.
When we got the mortgage on our home at the start of 2020 our mortgage rate was just under 2%. And anyone else who bought and fixed their rate before 2021 is likely to be in a similar boat.
Rates are much higher than previous decades, and people are having to borrow more as house prices have soared. This is also affecting renters as landlords with mortgages will be paying more and passing on that cost to tenants.
Mortgages are getting us down thanks to the 2021 stamp duty frenzy
There was a house buying frenzy in 2021 when the government froze stamp duty. People were already reconsidering where they were living thanks to the pandemic and more people working from home. And the stamp duty freeze meant a lot of people who would have paid thousands could save money.
A lot of those buyers got two-year fixed rate mortgages which are now due to expire with the peak rolling off time between July and October this year. According to the Financial Conduct Authority more than 400,000 people are expected to be looking for a new mortgage rate during this time.
Doing nothing is way too expensive
Previously if you needed to remortgage and didn’t want to rush into a decision you could do nothing. Once the fixed rate ends you’d be moved onto a standard variable rate (SRV) of interest. So you’d be paying a different rate of interest each month. It wouldn’t be the best option on the market, but chance are you probably wouldn’t end up paying too much more.
SVR rates have gone up so much, so moving to that option would see a massive jump in the rate paid.
Are you finding mortgages a worry at the moment? Or have you recently remortgaged?
24 responses to “Five Reasons Mortgages Are Getting Us Down”
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oh don’t get me started on the mortgage rates, my mortgage doubled! I hope the rates start getting down…
Oh no that’s not good x
It is definitely totally different to when I first got a mortgage back in the 90’s and worked in banking as well. It does worry me how things are changing
Yeah things have changed so much in the past few years never mind the past few decades x
We had a set amount to pay every month, and it was hard in the beginning but got better near the end
It is very hard at the moment, ours went up by £200 per month and it is hard to find the extra money for the rising bills.
I’m dreading how much ours could go up by so I’d love to clear more off before we have to remortgage x
I do find mortgages a worry. Ive been talking about it with my friends. The do nothing option is expensive
Ohh, Yes, I’m always worried about my mortgage doubling this year. But, I hope it will go down next year.
I will hope that it goes down by next year x
It is different from when I first got a mortgage. It truly worries me how things are changing.
It’s a real catch 22 especially during these unpredictable economic times. Taking out a loan is probably the last thing I would suggest right now especially a mortgage depending on interest rates.
Oh yeah I think keeping other debt as low as possible is so important so when it comes to renewing your mortgage you’re in the best position possible x
I do hope it gets better soon. I don’t have a mortgage but I know how my other friends feel about paying a lot.
I hope the rates go down asap! Our landlord increased our house rent within a year and when we asked him about it, he replied this exact line from your post- “the high rate is affecting renters as landlords with mortgages will be paying more in the UK”. Hence we had no option but move to another apartment.
I understand when landlords are putting it up for those reasons, but it’s when they’re just getting greedy as they know they can increase it more and still have people interested x
Mortgage debt is so frustrating! I have been hearing about rates going up. The market is always changing, and it is is interesting to hear where things are currently.
That’s amazing! This is one of the most interesting topics! Thank you for sharing this information with me.
Unsure what you think is amazing about this?!
I find mortgages to be something I will never be able to get – which gets me down quite a bit as I would love to not rent. Currently, we pay more in rent in our house than the mortgage would cost for the house (as it was up for sale before we rented it). Sadly, we did not have the desposit because we are always paying rent.
I’m hoping the unveiling of the renters mortgage will help people in your situation to not have to put a deposit down as long as you can prove you’ve been paying a level of rent similar to a mortgage as it’s not fair x
I can totally relate to your article on the challenges of mortgages. Your five reasons are spot-on and provide valuable insights into the struggles many of us face. Thank you for shedding light on this important topic and offering a relatable perspective!
This is the reason we have decided to hold back , it’s such a worry game and I think with the cost of living at the minute , it’s another thing to add to the list of things to be anxious about
It’s hard because we don’t know how much it may change over the coming months or years x