Is my 6.40% mortgage rate legal?

Trinity8

I have a Kensington interest only mortgage the fixed rate ended in February 2010 and the new rate is 6.40%.. Is this legal? Any advice would be appreciated

Peelerfart

Hi Trinity,

What makes you think it's illegal ?

luckyfool

What did your contract say the mortgage would revert to? A set margin above bank of england base rate, a margin above 3 month LIBOR, or a margin above the Kensington Standard Variable Rate? If its set out in your mortgage offer and they have kept to it, why wouldn't it be legal?

beecher2

Why wouldn't it be legal? My first mortgage was 8 point something and was considered a bargain at the time

redlady_1

My Halifax one is 7.29% so quit wondering! It could be worse.

maninthestreet

Trinity8 wrote: »

I have a Kensington interest only mortgage the fixed rate ended in February 2010 and the new rate is 6.40%.. Is this legal? Any advice would be appreciated

Of course it's legal. You could try to re-mortage with another lender.....

Wutang_2

redlady_1 wrote: »

My Halifax one is 7.29% so quit wondering! It could be worse.

yes, it could be illegal!!

Wutang_2

maninthestreet wrote: »

Of course it's legal. You could try to re-mortage with another lender.....

Clue is in the lender!

neas

I love this thread.

'My 2 year fixed deal ended'

Im now concerned as it was '4%' but am now on the SVR and its '6%'

I am being crippled by the repayments... i can't afford it !.

Is this legal?


Answer:

Yes it is legal, yes you are being crippled and if you had done your sums before entering into the fixed rate.. you'd have realised if the interest rates go up (which they do go up you know) then you'd have to pay MORE money per month. Basically the tactic of buying a house should be:

1. Fix for 5 years on a low interest rate
2. Use the 5 years on a great interest rate to OVERPAY (NOTE interest only is daft as you not reducing your 'repayments' at all) so that IF interest rates double by the time you leave the 5 year period you wont be stung so hard.


or you could do the 'reckless' path.

1. Borrow way too much .. but think its ok because the interest rate for a 2 year fix is low...
2. dont contemplate or use your head that a 'what would happen if interest rates rose 2%' scenario.
3.Get a short 2 year fix rate (so you have less time to overpay..)
4. Don't overpay.. and even better get an interest only mortgage so you dont pay back anything...
5. End of two year fix, get a big shock when you are now stuck with no equity repayed, the same loan you had before but with increased borrowing costs.
6. Post problems on a internet forum asking if its legal/illegal (as you cant afford paid legal help as mortgage is now crippling you)


Sorry for being nasty but 1-6 are probably what you did... britains soceity and House purchasing ideology mean people borrow up to the hilt and dont think about tomorrow only 'today'... well tomorrow has come and i think you a bit stuffed.

Only outs you have are:

1. Have funds available to remortgage onto another 5 year fixed rate mortgage (which requires you to have some equity)

Trinity8

Thank you to those for your sincere messages.. This is the first and last time i shall use a forum.. why some people use this to offload their 'issues' on people they know nothing about i will never and don't wish know.. A bit of advice ..go see a shrink!

A friend who has been a mortgage consultant suggested the forum as she thought my mortgage company were over charging me.. I had NOT been thinking this, but it got me thinking and I just wanted to check it out and know i have and all is well!. As it happens I love my large beautiful country home.. I feel very proud and privledged to be able to afford live here.

withabix

Overcharging: Yes, they are charging more than another mortgage lender.

Nothing to stop them doing this.