Cost of living: Mortgage cost means couple postpone second child

Vicki and Gareth say they "can't afford" to have a second child next year, as they originally planned

A couple have decided not to have a second baby next year, fearing mortgage rate rises will make it unaffordable.

Vicki Acheson and partner Gareth fear a sibling for Alex, three, may see them get rejected by banks when renewing their deal.

They pay £650 a month for their semi-detached home in Gabalfa, Cardiff, with an interest rate of 2.05%.

When they remortgage in 2024, a rise to 5.5% would take payments to £950 - average rates topped 6.5% in October.

These rate rises mean anyone renewing faces paying hundreds of pounds more a month.

Speaking to Wales Live Vicki said: "Thinking about that and the double whammy of affordability - increased childcare costs, increased energy costs, food, gas and electric, all of them, there is a real question mark for us come remortgage time, if we would pass mortgage affordability.

"As a result, we have said we are not going to do that [have a baby] next year, we are going to park this decision for at least another 12 months until we've got a bit more of an idea how the land lies."

Anyone whose mortgage needs to be renewed is facing far higher rates

The civil servant said the plan had been to think about expanding the family when Alex qualified for some funded childcare next year.

This would still leave the couple having to pay for some degree of childcare for both children when their current deal ends in 2024.

"If rates stay as they are, we know that won't be a problem," said Vicki.

"But we know that isn't going to be the case now.

"We haven't said it's definitely not going to happen, but it's definitely not happening next year - which had always been our intention."

Vicki said the problem is not just around the mortgage rate rise, but affordability with the rising cost of living another factor.

The cost of the family's mortgage is set to go up when they renew

She has spoken to professionals unofficially who said there was a risk they may not necessarily even be accepted for a remortgage on their home, which they bought for £180,000 in 2017.

They took their five-year deal out in 2019, fixed at 2.05%, and have about £140,000 left to pay off.

There could be options to free up more money, such as extending the mortgage length from 18 years to 25 years, but Vicki said: "We don't want to be walking into a financial problem in a few years because of life decisions you take next year.

"I accepted it as a fact [they cannot have a baby next year], there's no-one to blame, looking at all the variables, I just felt it's inevitable. I didn't feel like there was another choice."

The decision to put having another baby on hold is a precaution as much anything, as while they know there are people far worse off than themselves, inflation is causing lots of concern.

"We are not choosing between heating and eating, but not a lot needs to change to make it difficult," she added.

"Everything is more expensive - even going swimming has doubled. There is no state of desperation, we are aware of the cost of things and noticing the increase in these costs."

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