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My husband and I bought our current home in late 2019. We were looking for a property for a long time, but it was really difficult to buy in our hometown of Liverpool in England.
I was working at the time as a software engineer and earning a good salary of £75,000 ($85,636) so I wasn't being unrealistic about what we could afford. We had searched for a long time, but it was really difficult to buy in our city.
The types of houses we wanted usually had lots of interest from other people and we kept ending up in bidding wars, which we always lost. Throughout the process, we lost more than ten. We were looking for around three years but just could not get anywhere.
Eventually, we decided to buy a new house for £380,000 ($432,343) and pay a reservation fee. While it would be more expensive, my husband and I were just fed up at that point. At the time, we both had stable incomes and we knew there was no chance this house was going to fall through, we didn't have to worry about someone else bidding higher or the seller changing their mind.
Entering into a fixed-rate mortgage
Instead of getting an entirely new mortgage, we transferred our old repayment mortgage, with a fixed 1.2 percent interest rate for two years, from our previous property. The mortgage was renewed at the same fixed rate in early 2020, meaning our payment rate will increase from February 2023.
Shortly after we purchased the house, the COVID-19 crisis hit. Several members of my work team were furloughed, meaning the government paid a percentage of their wages while they could not attend work.
This left me picking up extra work from furloughed team members while trying to juggle other issues like homeschooling. I was not happy with how much of a burden the company placed on me alone, so I left shortly afterward.
Around four years ago, I started a business supplying curated support for pregnant women through subscription boxes. After I left my job, I focused on my company full-time.
At the time, the mortgage was £1,200 ($1,365) per month in total, so we could cope with payments while growing the business. However, when the cost-of-living crisis was exacerbated because of things like the war in Ukraine, our sales decreased significantly.
Because we were a direct-to-consumer business, many of our customers could not afford to continue purchasing our product anymore. People were really sad about it. It wasn't like our customer base just canceled, they would contact me and say: "I'm really sorry, but I just cannot afford it." It was really genuine, which was sad. So, our income went down because of that.
Income decrease during the COVID-19 pandemic
At the beginning of this year, we pivoted into helping other businesses retain talent by empowering female employees to return to work. The company is not profitable yet. We were, but since becoming a business-to-business company, we have stopped focusing on our main source of sales.
The business turns over around £50,000 ($56,911) per year, but we have the cost of goods and other expenses, so the profits are minimal. I am paying myself £1,000 ($1,138) per month as an allowance, sometimes even less than that. My husband works, so our joint income at the moment is around £3,500 ($3,983) per month.
Due to the cost-of-living crisis, our other household bills have increased by around £300 ($341.50). We have reduced our three-year-old son's nursery hours from five days to three to save money because it was costing us £700 ($796) just for that.
Mortgage payments increase
A week ago, I was sent an email saying: "Your mortgage is due for renewal in February, click here for your options."
The only options it gave me were for a two year fix at 5.83 percent or a variable rate of 5.89 percent. It seemed our only option was to go with the variable rate, which increased our payments by £700 ($796), to a total of £2,000 ($2,276) per month.
I just could not believe it. It seems as though we're not actually paying off our mortgage, it's just interest; money going directly to the bank. I feel like I'll be putting that money in the trash every month. The whole point of buying a house is investing in property, but if you're throwing away nearly £1,000 ($1,138) per month in interest, you may as well be renting in my opinion.
I was going to look at switching mortgage providers, but because I am self-employed it will be so much harder. Usually, you have to provide three months of bank statements to prove your income, but because I am self-employed I have to provide three years, which I don't have. I can't even get a phone contract at the moment,
So I'm caught in the middle, unless I got a full-time job right now and could present three months of bank statements by the time February came, but then I wouldn't be able to run my business, so I'm stuck. I feel stressed, under pressure, and worried.
I don't think every mortgage is as bad as this, it is my provider's current rate and my only option, but if you're getting a new one, I would encourage speaking to a broker to find the lowest possible rate.
Emma Jarvis, 32, from Liverpool is the founder of Pregnancy Subscription Service Dearbump and Parent Promise by Dearbump for workplace support. You can visit their websites here and here.
All views expressed in this article are the author's own.
As told to Newsweek associate editor, Monica Greep.
