I have a mortgage of £85,000 with £20,000ish paid off on a 30 year term (variable rate).
My initial monthly payment was around £330 per month but have been creeping up with interest rates, it’s now going up to almost £430 a month (£50 since the last rise two months ago). I just don’t understand how they can calculate this amount of difference in repayments..
Can anyone explain?!
I’ve been advised to ride with the repayment increases as it’s not a great time to remortgage, any other advice would be appreciated 🙏
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>My initial monthly payment was around £330 per month but have been creeping up with interest rates, it’s now going up to almost £430 a month (£50 since the last rise two months ago). I just don’t understand how they can calculate this amount of difference in repayments.
I will just note that UK mortgages are unique, and you should be cautious taking answers from non-UK folks. Generally, what’s happening is that interest rates have risen quickly, and you have a variable rate mortgage. Since much of your payment is going to interest, rather than principal, when interest rates rise your payment rises fairly rapidly, that is when interest rates go from (for example) 4% to 6% your payment will increase much more than 2%, because something like half of your payment is interest and interest rates have gone up 50%.
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