[
A homeowner has described 2023 as the most stressful year in his life as a result of fluctuating mortgage rates combined with the cost of living crisis.
Sam Williams, 51, and his wife Sarah, have been anxiously monitoring interest rates in the past year as their five-year fixed-rate mortgage comes to an end this month.
Their new mortgage rate, which he has negotiated this week, is 2.61 per cent higher than their previous rate – despite lenders slashing offers amid signs that inflation is easing.
Meanwhile, i has exclusively revealed that mortgage rates below 4 per cent could be on market by early next year.
But it won’t help Mr Williams, who lives in Okehampton, Devon, who will now pay over £900 a month for his mortgage.
The former counsellor, who is not currently working due to suffering with long Covid, had been paying a rate of 2.19 per cent for the four-bedroom property he has shared with his wife, daughter Verity and their two dogs since 2018.
Throughout the summer, as rates soared, he was seeing deals of more than 5 per cent, fearing that the family’s monthly payments would increase by around £300.
But as the market has settled in recent weeks, the Williams family have been offered a rate of 4.8 per cent for a five year fixed-rate deal, meaning that their monthly repayments will now sit at more than £900 a month – the top end of their budget – in addition to an increase in household bills.
He added that if they had not been able to renegotiate for a new fixed rate, they would have rolled over to their lender’s standard variable rate mortgage at 7.99 per cent.
“Everything’s continuing to get so much more expensive, isn’t it? When we go into a food shop, we’re almost in tears sometimes at how little we get for our money, or how much we’re having to spend,” he told i.
“We have an amount that we put aside for food every month, and we’ve had to up that just to kind of keep on an even keel.”
Mr Williams has been out of work for 3.5 years due to his long Covid, meaning Ms Williams, who works in the housing sector, is the sole income earner. As a result of the dramatic shift in prices this year, the pair have delayed plans to move house.
He is further concerned about their budget for the next year as his daughter is hoping to go to university for a four-year undergraduate course. They have just over eight years left on their mortgage and are hoping to clear it within the next five years – dependent on the market.
“It probably has been the most stressful year I’ve ever had as a homeowner, just because everything’s unpredictable,” he said.
“I don’t really know what’s going on with my health and it’s not getting any better. It’s quite a responsibility for my wife to shoulder on her own.
“We had hoped to be thinking about moving house early next year, but the market’s so flat now that it’s not a good time in our area with the housing stock that’s available.”
In response to the news that experts think rates will continue to drop in the short term before bottoming out at some point next year, Mr Williams said: “It makes me feel annoyed that I’m having to do this [renegotiate] now by necessity.
“Whereas if we could afford to wait a couple of months, we could get a better deal.”
Research firm Moneyfacts said the average two-year fixed-rate homeowner mortgage is sitting below 6 per cent for the first time in nearly six months.
Across all deposit sizes, the average two-year fixed-rate homeowner mortgage on the market dipped to 5.99 per cent on Friday, falling from 6.01 per cent on Thursday.
The last time the rate was below 6 per cent was on 16 June, when it was 5.98 per cent, the company said.
