Northern Rock mortgage

itsjusttoohard

Any bright ideas as to what we do now? - We took out a self certificated interest only mortgage with Northern Rock and come to the end of our current deal at the beginning of March this year.
Although we had £20,000+ to put down as a deposit we still had to take out a mortgage of £156,000 to get a fairly basic house in our part of the UK. Northern Rock say they are unable to offer us a new deal and so we will revert to SVR which will increase our mortgage by about another £180 per month. We have made enquiries with other lenders but cannot find another deal as we are both self employed and our house has gone down in value so we have next to no equity in it.
We both have excellent credit ratings and have never missed a payment but another £180 a month is going to be very very hard. Extending the length of the mortgage is not really feasible as I am considerably older than my husband and payment holidays dont seem to help in any real way.
We seem to be stuck with Northern Rock. If anyone has any ideas as to what other options might be available we'd be glad to hear them!

beecher

What's your plan for paying off the capital? The SVR is relatively low at the moment so if you're going to find it a struggle then I'd be concerned about what you will do when rates go up.

Have you thought about selling up while you still have equity? Renting might be a better option for you?

itsjusttoohard

We will be able to pay off capital eventually from known money that will be available, but certainly not in the near future.
The plan was to have been to pay off lumps as and when we could but all money at the moment is needed just to keep going with bills etc.
We had been renting for the past ten years together and I had been renting for another five years prior to that so we don't intend to go back to that! Seriously though, in our neck of the woods property rentals would work out more or less the same as our increased mortgage so I dont see any point in that.
Guess we will just have to grin and bear it!

beecher

I would just be concerned about ending up in negative equity in the next couple of years, and stuck on a svr heading upwards. Maybe a visit to the Debt Free Wannabee forums would be helpful as you could work out your Statement of Affairs and get help on how to cut your bills, or up your income.

BTW, are you sure your payments will go up by £180/month? What fixed rate are you on just now? The SVR is 5.09% at the moment if that helps and you can work out your payments by using

http://www.moneymadeclear.fsa.gov.uk/tools.aspx?Tool=mortgage_calculator