interest only mortgages.

lacewing

I switched to an interest only mortgage when I was diagnosed with terminal cancer, of course this has been great for me. Payment down by over £300. Now my preferential rate with Northern Rock has run out. They have told me to find another supplier as they wont do anything. I can't afford this new rate and need help with who to go to next. I have been quotes approx £65 by Santander- N.R wanted nearly hundred. My payment before pref rate finished was apprx. £30. Please Help. Jax

Wutang_2

They can't make you move - you'll have to go with their SVR unless you can find a better deal to remortgage to.

dunstonh

NR are saying that they won't offer you a new deal. They are not saying you have to move your mortgage. You can stay with them until the normal end date. However, it will be on the SVR.

If you want to remortgage, then all the new lenders are going to have fees depending on the deal you want. Also, some will not do interest only.

Wh05apk

Sorry to hear of your situation, I'm guessing from the interest figures quoted that your mortgage must be about £30k? it may be worth re-mortgaging but there will not be a massive saving A&L have a fee free deal at br+ 2.56%, but what you have to consider is that when rates start rising that rate will look quite high, currently NR svr is 4.79% which is high, but I think they will hold that rate as base rises, until it gets to about 2.5% then start increasing. Although the new deal is fee free, you will incur a deeds release fee from NR, taking this into account and the hassle involved, you may do better staying with them.

opinions4u

Wh05apk wrote: »

currently NR svr is 4.79% which is high, but I think they will hold that rate as base rises, until it gets to about 2.5% then start increasing.

That is an exceptionally optimistic statement.

Wh05apk

opinions4u wrote: »

That is an exceptionally optimistic statement.

Traditionally SVR's have been about 2% over base, that margin has only increased when base was slashed, with lenders typically holding in the 4-5% bracket (C&G being one who did not theirs is now 2.5%) as a result I believe, and it is only my opinion, that as rates start to rise, they will have to hold their svr to some degree.

I would be very cautious of moving off svr with no penalties into another deal with penalties unless the savings were worthwhile, and historically a tracker at over 2.5% above base is very high.

RenovationMan

Just for clarification -

SVR means Standard Variable Rate and it is the standard mortage interest rate that the banks lends. When a mortgage deal, for example 3 years fixed at 4%, expires at the end of the term, in the example it would be at the end of the 3 years, your mortgage rate reverts back to the Standard Variable Rate.

If you can't afford this, then you should speak to the Citizens Advice Bureu or one of the debt charities to see if there is anything they can do to help.

I hope things work out for you, it looks like times are hard enough for you already without the extra worry about your home.