mortgage payment gone up by almost 300%

badgermum

Here's a good one thought I'd share, We received a letter on Monday from our mortgage company telling us that as from August our monthly payments will be up nearly 300%. that's up by £900 a month.

We've come to the end of our special rate and there is nothing else available... Have taken advice and been told to either sell (we're in negative equity) or walk away!! not so easy with 3 kids and no where to go.

We have no family local either who could take us all in My husband is self employed in building trade so to bring in that much more a month is going to be unlikely to say the least... So basically we are stuffed...
any advice

_Andy_

Any chance of changing to interest only to reduce payments? or extend the mortgage term?
Who is your lender?

maninthestreet

badgermum wrote: »

Here's a good one thought I'd share, We received a letter on Monday from our mortgage company telling us that as from August our monthly payments will be up nearly 300%. that's up by £900 a month.

We've come to the end of our special rate and there is nothing else available... Have taken advice and been told to either sell (we're in negative equity) or walk away!! not so easy with 3 kids and no where to go.

We have no family local either who could take us all in My husband is self employed in building trade so to bring in that much more a month is going to be unlikely to say the least... So basically we are stuffed...
any advice

This sounds like the plot from 'Freefall' on the TV earlier this week.
Surely you knew this was going to happen? What was the 'special rate' you were on, and what interest rate is now going to be applied to your mortgage.

beecher

If the OP was paying £300/month and is now paying £1200/month it is feasible - the special rate could've been extremely low and is now going back to 'norm'. A lot of people will be hit by something similar when their trackers come to an end which is why I hope they are all preparing for it.

davey001

There is only one thing that i can suggest that would/could be of any use badgersmum and that is get some publicity. It's the only thing the banks are scared of. Call some newspapers, email every reporter you can think of out there.

If you get lucky and get your name in the paper ("300% interest hike by 'nastybank plc") then i doubt it will mean your mortgage payments will be put back to the original level of course but... at the very least, it should mean that the bank won't act too harshly (while under public scrutiny) and may be more amiable in offering you a plan to cope such as Andy stated: reduced payments, extending the life of the mortgage etc

beecher

davey001 wrote: »

There is only one thing that i can suggest that would/could be of any use badgersmum and that is get some publicity. It's the only thing the banks are scared of. Call some newspapers, email every reporter you can think of out there.

If you get lucky and get your name in the paper ("300% interest hike by 'nastybank plc") then i doubt it will mean your mortgage payments will be put back to the original level of course but... at the very least, it should mean that the bank won't act too harshly (while under public scrutiny) and may be more amiable in offering you a plan to cope such as Andy stated: reduced payments, extending the life of the mortgage etc

Depends on how low it was in the first place though - some people on interest only mortgages are paying minimal amounts at the moment and a 300% interest hike will surely be common for those paying around 1% at the moment.

Wakey2008

davey001 wrote: »

There is only one thing that i can suggest that would/could be of any use badgersmum and that is get some publicity. It's the only thing the banks are scared of. Call some newspapers, email every reporter you can think of out there.

If you get lucky and get your name in the paper ("300% interest hike by 'nastybank plc") then i doubt it will mean your mortgage payments will be put back to the original level of course but... at the very least, it should mean that the bank won't act too harshly (while under public scrutiny) and may be more amiable in offering you a plan to cope such as Andy stated: reduced payments, extending the life of the mortgage etc

Absolute nonsense.

The chances are they were just on a special deal that has ended and they have reverted to the SVR. If this is the case then it is the customers fault as they should have been aware of what would happen with their payments when the deal ended and if they only took the mortgage because they could afford the initial rate, but not any rises, then they should never have been given the mortgage in the first place.

Lenders do not just put rates up for the sake of it, it will have been in the original conditions.

Wakey2008

Also some of you seem to be confused. It is not a 300% interest hike. It's a 300% rise in their payments.

unite79

It must have been a hell of a Deal - Bearig in mind SVR has dropped massivly with most lenders over the last 24 months - and Most if not all Sub prime deals are lower now than during the period - cant help but be amazed - surely Cant be a secured loan due to amount oper month!

Lets have some details - Lender -

Wakey2008

Sounds like it might be a high risk lender - ie lends to those the high streets won't - but still it's impossible to say much about this without some details.

When was the mortgage taken?

How much is the balance?

What is the term?

What was the special rate?

What is the new rate?

Who is the lender?

Why was this mortgage taken without any consideration to future costings?

badgermum

The mortgage is interest only and the rise rate will be 4.840 as from August.
Thanks for some of your general negative comments that really helps to make us feel even better.
My husband had a very successful business up until recently when the work dropped off and so no unfortunately we couldn't see this coming as when we took out this mortgage we could have paid the amounts back quite comfortably.

A genuine thanks to all those offering practical advice