So how do you (and your family) intend to ‘hold you nerve’?

growstuff

But you don't have to worry about your mortgage increasing.

We're years beyond a mortgage. However, I believe our 2 younger daughters and 4 eldest GC (in their 40s) still have mortgages. OP asked about "you and your family." We have a family, I answered.

My husband had a second job, was building his business, can be done

Norah but not everyone has a husband that can take a second job or even have a husband

NanaDana

Re. mortgages, back in the early 70's when we first struggled onto the property market, I recall that the standard maximum was 2.5 times your gross salary, or 2.75 times if you grovelled sufficiently to the Bank Manager, and were considered a safe prospect. How anyone can cope with 4.5 times these days is beyond me. It seems irresponsible to encourage taking on so much debt, as I fear many are now finding out the hard way. We just about managed to keep our heads above water in the 70's when interest rates hit 17.5%. Imagine if that rate were applied today to the massive mortgage sums we see around us!

But rents are even more expensive and it has made sense to take out a mortgage.

Norah

karmalady

No grantanow it is not patronising of Sunak. It is fair warning to all

Agreed.

My thinking is and always has been `ok so how do we cope with this?` Back to paper and pencil, working out exactly how much I could withdraw every month after mortgage and house insurance payments. Cash into envelopes and eating whatever I could grow, no meat nor fish etc

That was holding the nerve, standing firm within our own budget. It passed as we know. This is the first time for the next generation. My generation had a fair bit of practice, starting with post war rationing, even at my tender age then. These times do pass.

I feel exactly the same and live the same way as you describe.

But you don't have to worry about your mortgage increasing.

We are still paying a mortgage. We remortgaged after helping DD out financially several years ago. My husband decided in early spring that we needed to fix our mortgage as he had a feeling that the rates would go up! I am so glad I listened to him.
He has dreams, often non specific, about future events. He warned me that Putin was planning an invasion several months before he went into Ukraine.

karmalady

No grantanow it is not patronising of Sunak. It is fair warning to all

Agreed.

My thinking is and always has been `ok so how do we cope with this?` Back to paper and pencil, working out exactly how much I could withdraw every month after mortgage and house insurance payments. Cash into envelopes and eating whatever I could grow, no meat nor fish etc

That was holding the nerve, standing firm within our own budget. It passed as we know. This is the first time for the next generation. My generation had a fair bit of practice, starting with post war rationing, even at my tender age then. These times do pass.

I feel exactly the same and live the same way as you describe.

NanaDana

Re. mortgages, back in the early 70's when we first struggled onto the property market, I recall that the standard maximum was 2.5 times your gross salary, or 2.75 times if you grovelled sufficiently to the Bank Manager, and were considered a safe prospect. How anyone can cope with 4.5 times these days is beyond me. It seems irresponsible to encourage taking on so much debt, as I fear many are now finding out the hard way. We just about managed to keep our heads above water in the 70's when interest rates hit 17.5%. Imagine if that rate were applied today to the massive mortgage sums we see around us!

Yes, in the late 1960s it was 2.5 the larger salary - without equal pay for many that was the man's salary. They would not count mine because "I would be likely to leave work to bring up a family". I worked for several years after that!
It seemed ok, fairly manageable even after I had a career break, until we relocated for work to a much more expensive area and mortgage rates went up to 15%.

Re. mortgages, back in the early 70's when we first struggled onto the property market, I recall that the standard maximum was 2.5 times your gross salary, or 2.75 times if you grovelled sufficiently to the Bank Manager, and were considered a safe prospect. How anyone can cope with 4.5 times these days is beyond me. It seems irresponsible to encourage taking on so much debt, as I fear many are now finding out the hard way. We just about managed to keep our heads above water in the 70's when interest rates hit 17.5%. Imagine if that rate were applied today to the massive mortgage sums we see around us!

My husband came home from work in the 70s and said that salaries had been cut to half instantly. The staff had voted on it and that decision enabled everyone to keep their jobs. Workload increased in the quest to try and bring in work. We had 3 small children by then

My thinking is and always has been `ok so how do we cope with this?` Back to paper and pencil, working out exactly how much I could withdraw every month after mortgage and house insurance payments. Cash into envelopes and eating whatever I could grow, no meat nor fish etc

That was holding the nerve, standing firm within our own budget. It passed as we know. This is the first time for the next generation. My generation had a fair bit of practice, starting with post war rationing, even at my tender age then. These times do pass

No grantanow it is not patronising of Sunak. It is fair warning to all

Casdon

Example 3.5 +1 x £50 k salary = £225k mortgage in our day
4.5 +4.5 x£50k salary = £450k mortgage young couple now
That is why so many people are concerned about small interest rate rises, because proportionately it it makes a big difference to their monthly outgoings if they have a mortgage which is at the top end of affordability for their salary levels.

Not sure when your "day" was Casdon, but my first mortgage was 2.75 x £6300 (and a bit) = £17,950 mortgage. When interest rates hit 16%, my salary had risen and the monthly increase was in tens of pounds, not thousands. I can't remember the exact percentage of my salary, but it was nothing like mortgage-holders today are about to be hit with as a percentage of their salary.

Is he also going to "hold his nerve?" Perhaps, compared to the rest of us, a different challenge for him as a multi-millionaire with a multi-millionaire wife. Rather puts me in mind of the "them and us" sub-text of the unfortunate ww2 propaganda poster which urged: Your Courage, Your Cheerfulness, Your Resolution; Will Bring "Us Victory". "Hold Your nerve" is perhaps not quite as patronising, but still appears to come from the same stable. As for what I'm going to do, I shall just soldier on as usual, helping out those in my family who really are struggling.

Example 3.5 +1 x £50 k salary = £225k mortgage in our day
4.5 +4.5 x£50k salary = £450k mortgage young couple now
That is why so many people are concerned about small interest rate rises, because proportionately it it makes a big difference to their monthly outgoings if they have a mortgage which is at the top end of affordability for their salary levels.

"Keep calm and carry on up the Kyber?" Yours or your relations. It's going to be the purse of Mum and Dad again.

We’ve been here before about mortgage costs on another thread recently. You could only borrow up to 3.5 times main salary plus 1 times second salary years ago, so your debt burden for your mortgage was capped. Typically lenders will now let you borrow between 4-4.5 times your joint income for a mortgage. That is a massive difference in the percentage of income spent on mortgage repayments, and means that when rates rise you are disproportionately affected.

It's very patronising of Sunak to tell people to hold their nerve.

and then the endowment mortgage paid the rest off.

We had two endowments, one for the main mortgage and one for an extension - both failed to deliver.
Legal and General did the decent thing and made up the shortfall to bring the smaller endownment up to the equivalent of the loan, but Axa did not. We vowed never again to take out an endowment.

Sorry for the duplication🤪

It’s important to remember that historically, 5% is still a very low rate to pay.

We took our first mortgage in 1981. It was around 14%. By the end of that year the mortgage rate had gone up to around 18%. It was hard going. When DH retired from the Army in 1985 we paid a large chunk of it off with his gratuity, and then the endowment mortgage paid the rest off. That was a huge weight off our minds while both of us were still working and the children in further education. Both my adult children have been fortunate enough to have paid off their mortgages.

We took our first mortgage in 1981. It was around 14%. By the end of that year the mortgage rate had gone up to around 18%. It was hard going. When DH retired from the Army in 1985 we paid a large chunk of it off with his gratuity, and then later paid it off. That was a huge weight off our minds while both of us were still working and the children in further education.

JenniferEccles

It’s important to remember that historically, 5% is still a very low rate to pay.
As we all know, interest rates have been abnormally low for a good number of years so those paying mortgages have had it very easy during that time, compared with savers who have had to endure a pitiful amount of interest on their money.
Now the balance is shifting so again there will be some winners and some losers. Nothing abnormal in that.

With regard to rising food prices, I heard on the radio earlier that the price of raw materials is dropping, and the government is making sure that supermarkets are not ripping customers off by not lowering their prices.

Agreed.

The 2-3% rates seem to be oddly low, historically.

We paid 5% in the late 50s, £500 yearly salary.

My husband had a second job, was building his business, can be done.

JenniferEccles

It’s important to remember that historically, 5% is still a very low rate to pay.
As we all know, interest rates have been abnormally low for a good number of years so those paying mortgages have had it very easy during that time, compared with savers who have had to endure a pitiful amount of interest on their money.
Now the balance is shifting so again there will be some winners and some losers. Nothing abnormal in that.

With regard to rising food prices, I heard on the radio earlier that the price of raw materials is dropping, and the government is making sure that supermarkets are not ripping customers off by not lowering their prices.

This is true.👍🏻
I think ‘hold your nerve’ means hang on in there it won’t be as bad forever?
Me and DP still have a mortgage to pay, fixed until next year thankfully.Our savings earn virtually nothing.
We shop around, Aldi, Lidl mainly at the mo.We cut out many little luxuries just for now.We’ll weather the storm.

nanna8

The mortgage rates are going up in a lot of countries. Certainly they are here in Australia, a lot and we have a Labour government. They have gone up a lot more under them than they did under the previous government. They can’t handle money well, unfortunately. All mouth and no action. You will see.

Thankfully we don't have a mortgage now but I so hear a lot about the mortgage/loan rates going up over there, nanna8, they are higher than here, causing sales to fall through, the difficulties in obtaining a mortgage and the problems with more people wanting to rent than rental properties available.

ronib

I’m waiting for someone to come up with another ‘Dig for Victory’ campaign…. That’s if we have any allotments left.

Keep Calm and Carry On

I’m waiting for someone to come up with another ‘Dig for Victory’ campaign…. That’s if we have any allotments left.

It’s important to remember that historically, 5% is still a very low rate to pay.
As we all know, interest rates have been abnormally low for a good number of years so those paying mortgages have had it very easy during that time, compared with savers who have had to endure a pitiful amount of interest on their money.
Now the balance is shifting so again there will be some winners and some losers. Nothing abnormal in that.

With regard to rising food prices, I heard on the radio earlier that the price of raw materials is dropping, and the government is making sure that supermarkets are not ripping customers off by not lowering their prices.

I think he meant, dont ask for big pay rises, take things on the chin, and all will be well.
Well that might work fine and be all well for him. He disregards any people suffering, meanwhile.