MUM-OF-TWO Lydia Joseph was so concerned about how she’ll afford her mortgage under spiralling interest rates that she’s fixed early.
She was terrified she would have to sell her house if interest rates spike to 6% l'anno prossimo, because she wouldn’t be able to afford the mortgage repayments.
A sharp fall in the value of the Pound has sparked concerns that interest rates could spiral, causing mortgage chaos for millions.
Experts estimate homeowners will face having to find thousands of pounds extra a year to pay for their home loan.
Lidia, 34, who lives in Faversham, Kent, started to panic about unaffordable mortgage repayments when her fixed deal comes to an end next year.
Her three year fixed mortgage at 2.08% with Barclays was due to come at an end in April next year.
She and her husband Paul, 42, pay £1,725 a month back on their loan for their four-bed home.
To swerve the rising costs, Lydia worked out it would be more cost-effective to switch in July onto a new deal at 2.7% for seven years with the same lender – even though she needed to pay a hefty £12,400 charge.
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The gamble could have paid off though – Lydia would have been paying a whopping £2,632 a month in repayments if she left it until April next year to fix, when interest rates could be as high as 6%.
On her new fixed deal, she pays £1,853 – which is £779 less.
“People thought it was madness switching early, but I think it will be years before anyone starts offering a 2.72% rate again," lei disse.
“A 6% mortgage rate would have ruined us – we wouldn’t have been able to make those repayments.
“We bought this house as our forever home – we’ve really invested in it.
“To think that we could have had to sell up because of rising rates – I was sweating bullets over it.”
‘People will lose their homes’
Lydia isn’t the only homeowner concerned about rocketing rates.
Hard-working mum Nyree Clark fears her mortgage payments could jump from £253 a month to £380 if interest rates climb to 6 per cento.
The 40-year-old, from Chesterfield in Derbyshire, already works all the hours she can as a health adviser for the NHS as well as running a pet courier business with her husband Michael, 51, in order to provide for their son Cody, 13.
“Last year my mortgage payments were £148 a month so this means I’d be paying more than double.
“I’m on an interest-only deal so my payments might seem relatively low.
“But I try to pay an extra £200 each month to make sure that I pay off the £76,000 that’s left before the end of the term.
“Otherwise we won’t own the property and we’ll have nothing to hand on to our son.
“I don’t know if I’ll be able to do that if rates increase by this much.
“People are going to lose their homes.
“It feels like the rich are getting richer and the working poor are just getting trampled on.
“We’re working every hour God sends so I don’t know what more we can do.”
On top of her mortgage worries, Nyree suffers from severe idiopathic cold urticaria which means she can have a potentially fatal reaction if her body temperature drops too low.
Because of this she’s resorted to stockpiling wood to fight the energy price hikes.
‘We’ll have to cut back on everything’
Secretary Andreea Gherasium and her husband Sebastian, who is a lorry driver, are worried about what will happen when their fixed rate mortgage deal comes to an end next year.
Secretary Andreea, 30, and lorry driver Sebastian, 36, who live in Rutland, Northamptonshire, will see their four-year fixed rate deal at 4% fine.
With mortgage rates expected to hit 6% l'anno prossimo, their £336 monthly mortgage repayments will likely soar when they lock into a new deal.
The couple and their two children, marcus, 10, and Lucas, 9, are struggling to get by now due to the crippling cost of living crisis, and have had to cancel swimming lessons and trips to their local lakes.
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“With everything going up in price, we will struggle when rates go up next year when our fixed deal ends,” Andreea said.
“Like everyone, I’m really concerned – it will mean cutting back on everything, like our food shop – and it means no more luxuries like phone updates.”