Luke Marsden: Feeling the pinch as mortgage rates rise

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I’m currently going through the process of remortgaging and although it’s not as painful as actually buying my house was, it’s still painful.

For those that have done it will know it is a bureaucratic, red tape nightmare (similar to what I’d imagine being part of Wigan Council is like) and things are moving at a glacial pace.

My fixed rate deal is up in a few months and I’m not crazy enough to gamble on the variable rate given the state of the economy, but a part of me does wish I was a rebel without a cause but in this case my cause is my monthly payments leaving my bank.

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I’m looking at around a £75 a month increase due to the current rate of inflation and the projections are that it will stay around this rate if not higher for the next six to nine months.

Luke MarsdenLuke Marsden
Luke Marsden

£75 is a bigger jump than I was anticipating and I’m fortune enough that I can absorb it without it impacting my monthly disposable income pot too much, but many reading this won’t have that luxury, in fact they may not even have a house anymore.

I spoke to one Wiganer who told me he’s selling up and moving in with his friend – effectively renting out his friend’s spare room – as he can no longer afford to live in his house anymore.

Like myself, his mortgage is up for renewal this year but for various reasons his loan to value ratio hadn’t really moved.

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His story will be one of thousands across the country who are facing housing costs they simple can’t afford.

A tip I was told years ago was to overpay on the mortgage if you can. It doesn’t have to be major sums but paying an extra £20 a month when you can really does help in the long run, in my case it has helped with the LTV yet the economic situation has shafted me.

Who do I blame? Instantly many would jump to Liz Truss and in fairness she’s an easy poster woman for this, but the problems run deeper and have for decades.

We’ve been hooked on cheap money and interest rates and as I’ve learned the hard way, there’s always a price to pay.