A family that is set to remortgage next year has shared how they are getting ready for their repayments to jump up.
Sheen and Paddy Horton have fixed term mortgages on two properties which expire in 2024 when they expect their monthly repayments to increase by 40 percent, or a total of £1,350.
They have reduced their spending in anticipation of the huge bills hike which they expect will affect how much they can save for the future.
They told Express.co.uk: “We have reduced our energy costs by around £100 per month by being more efficient with our heating.
“We have reduced expenditure on eating out and other entertainment expenses. We anticipate that we will have to move one of our mortgages on to an interest only mortgage for a period of time which will save us around £600 per month.”
The couple currently put aside £1,150 each month into ISAs as part of their lifetime savings plan.
They said: “A significant part of this will have to be paused for now to cover the increased mortgage and living costs.
“This will affect our long-term plans around retirement and supporting our daughter through higher education.”
With regards to looking at mortgage deals, they said they have previously used a mortgage broker to find competitive short-term deals.
Sheen said: “Whilst he wouldn’t have been able to predict the impact of Ukraine, I do wonder whether he was incentivised to put us on short term fixes rather than balancing the risk with at least one mortgage on a longer term at a higher rate.
“I am now going to do more research – using a combination of an additional broker, comparison sites, and talking directly to our bank to see if they could offer us a competitive rate.”
Research from money-saving tool Nous.co found 79 percent of people on a fixed-rate mortgage are worried their repayments will become unaffordable when they remortgage.
Greg Marsh, CEO of Nous.co, said: “Mortgage holders are terrified. Most are going to see increases in their monthly repayments they can barely afford when it comes time to refinance.
“No surprise they’re cutting back sharply on everything else. Almost 800,000 low fixed rate deals are due to end this year and those homeowners are in for a big shock.
“People need to avoid burying their heads in the sand, make sure they are on the best mortgage deal possible, and ensure they are not overpaying on other household bills.”
For the latest personal finance news, follow us on Twitter at @ExpressMoney_.
