‘I felt sick when I found out my mortgage payments will jump £900 to over £2,600 a month’

A mother-of-two said she “felt sick” when she found out her mortgage repayments will jump from £1,700 to £2,600 a month at the end of her current deal.

Hannah Hardman, who works in tech, and her husband bought their four-bedroom detached home in Kent in 2019 on a five-year fixed rate mortgage of 2.35 per cent.

With the uncertainty over the Bank of England base rate decisions and their current mortgage deal coming to an end, the Hardmans made the choice to take up a fixed two-year deal at a rate of 5.72 per cent on the advice of their mortgage broker.

Ms Hardman, 33, said she felt “shellshocked” by the news of the increase which is set to kick in in February.

“We’re going to be moved on to a 5.72 per cent rate which just makes me feel sick,” Ms Hardman said. “The monthly repayments go from just over £1,700 to over £2,600.”

Ms Hardman, who already works condensed hours and relies on her children’s grandparents to lower childcare costs, said the significant rise in mortgage payments will put more demands on her and her husband’s finances.

“It puts a lot of pressure on me and my husband professionally to advance in our careers and try and perform at work to try and secure pay rises that will enable us to just be able to maintain. I think we’re just having to be really mindful of needs versus wants.”

She added: “Fortunately, my daughter turns three in February so we will benefit from some of the free childcare hours that the Government rolls out.”

But Ms Hardman said the money they hoped to save has been swallowed up by other cost increases, meaning they are now considering reducing the hours their children spend in childcare three days a week.

The couple’s monthly childcare costs are currently higher than their mortgage repayments at roughly £2,300 a month.

Ms Hardman said: “Most of the time we work from home, so we try and give ourselves that space to work. So I put them in from 7.30am to 6pm, but if we reduce that then that would reduce our childcare costs but it would also put more pressure on having to work late at night to catch up.”

The tech worker said she and her husband are already “quite conservative” when it comes to spending but she has started making cutbacks and considering how to be even more creative with money.

“I’m always on Vinted now because it’s so much more cost effective to buy second-hand,” she said.

“You’re constantly looking at prices and even just driving… my parents live an hour and a half away, that’s like a tank of petrol. We don’t have to do that right now, but it’s like, will we have to be limiting travel?”

Ms Hardman, who co-founded The Herde, a company she launched to enable workplaces to help reduce their employees childcare costs, said she cannot imagine the pressure such increases are putting on single parents.

She said: “I know there’s a lot of other families that have had so much more to navigate.

“I feel like you’re constantly pushing yourself and trying to work harder to get further ahead and bring more to the table but actually it doesn’t matter because you’re constantly being knocked back.

“We’ve both been working hard. We’re both really lucky to have great careers. It’s still really tough.”

Last Thursday, the Bank of England chose to pause the base rate at 5.25 per cent. It is hoped they could fall as the Bank rate has been paused but experts have not ruled out another rise before the end of the year.

Around 81 per cent of customers have fixed-term mortgages which will remain unaffected by changes to the base rate.

As yet, the Hardmans are not locked into their new 5.72 per cent deal, but they know to expect a significant increase regardless.

Ms Hardman said: “I would like to think that things aren’t going to get worse from a interest rate perspective, although you just never know.

“We’re never going to be back on that 2.35 per cent rate. And I think like mortgages are such big parts of your outgoings that it just impacts everything when that rate increases.”