mortgage payment gone up by almost 300%

MORPH3US

You need to set out the full details of the mortgage OP, no one can help you until they have all of the facts...

See post 11 by Wakey2008 for what we need.

"Thanks for some of your general negative comments that really helps to make us feel even better."

To be fair, some people tell it how it is on these forums whilst some people are "hugs and kisses" types... I don't think anything above was negative, just realistic.

EDIT

Lots of replies whilst I was typing this so ignore anything already answered.

BTW, my mortgage is 5.09% fixed for 5 years so as said earlier, 4.84% is low in comparison.

Radiantsoul

Gorgeous_George wrote: »

So, I estimate that you have a mortgage of £300K on interest only terms.

I'm surprised that you think 4.84% in unreasonable. Sure, it is more than 1.61% that you must have been enjoying before but it is hardly a h igh rate. I'd be more worried about what will happen when rates rise - you could easily be asked to find half as much again.

Selling sounds like good advice IMHO.

GG

It sounds like the orginal deal was fantastic. It would be interesting to know if the OP ever had a plan for repaying the capital.

It sounds like the OP is either going to have to struggle on for several years or cut their losses and sell.

Radiantsoul

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

Banks are not scared of publicity. No newspaper would print the story without checking with the bank first. And in this case it seems there isn't much of a case to answer. It seems the OP has a large mortgage with a very low rate of interest that has risen to a still low rate of interest.

michaels

I don't think it is fair to question the OP re expecting to go on to the svr - not many taking a mortgage 2 years ago would have anticipated that negative equity would prevent them from re mortgaging on to another discount deal when the initial one ended. However finding now that the 4.84% rate on offer is impossible does sound like a lack of foresight as equally when taking out a mortgage 2 years ago that would have probably been lower than the best discount rate available...

So it would seem that the difficulty stems from the reduction in income rather than the rate reset - do any of the govt schemes help in these circumstances?

Pee

Have you checked out your benefit entitlement, including to working family tax credit?
Are you working and if not can you get some work, possibly when your husband is at home to look after the children?

Can you post your SOA on the debt free wannabe board, and then you will have lots of advice about cutting your living expenses?

Practically, I don't think it is an option for a family to move in with an extended family. £1,200 is a lot to be paying each month but what would you be paying in rent?

Would you be any better off if you did sell, or would you be better off hanging onto the house? If you want to do it, I am sure that you can. I know work is in short supply for builders and that self employed has disadvantages at the best of times with cash flow problems. If there is no work, could he join a temping agency, even if he ended up working in a factory it would be bringing some money in.

badgermum

ginvzt wrote: »

When was the mortgage taken?

• How much is the balance?
• What is the term?
• What was the special rate?
• What is the new rate? - you said 4.84%, which is a rather good rate at the moment anyway
• Who is the lender? - You said Birmingham Midshires

I would also add:

• What is the value of house or LTV?

Mortgage was taken in 2007
amount of £306,000
25 year term
tracker rate was (since April 2009) 1.340%
new rate 4.84
Birmingham Midshires is the lender.
house is probably now worth £280,000

We genuinely thought we would be able to pay the new rate when we originally took out this mortgage so a successful business was our plan for repaying it and if the business had carried on being as successful as it was we would have been able too.

Wakey2008

badgermum wrote: »

Mortgage was taken in 2007
amount of £306,000
25 year term
tracker rate was (since April 2009) 1.340%
new rate 4.84
Birmingham Midshires is the lender.
house is probably now worth £280,000

We genuinely thought we would be able to pay the new rate when we originally took out this mortgage so a successful business was our plan for repaying it and if the business had carried on being as successful as it was we would have been able too.

It may have covered the payments but how would you raise the £306,000 capital at the end of the term?

badgermum

As much as it sounds horrible eventually ( hopefully not for a long time but realistically within 25 years) my parents house will be left to me and I would have sold that to pay off capital.

unite79

Wakey, Sell the house in 20 years, Prices only ever Rise.

Badgermum, your payment at the end of your deal, is considerably lower than you expected when the deal was done - as Base rate has come down by so much - The trouble for you is that your Husbands income has also been dramatically affected - Reality is going to start hitting a LOT of people over the next 12 months - Whilst Rates are artificailly low (ie 0.5%) Repossesions will remain low - When rates start to rise - Which they will - and lenders wont lend - OUCH.

opinions4u

The payment is probably lower than when the mortgage commenced.

The OP has been stuffed by a significant drop in income.

Badgermum, I think you may get the most help from the debt-free wannabe boards, so if you haven't already visited, I would suggest you do.

It must be a tough time and I can't begin to imagine how tough.

Good luck.