Northern Rock charging 19.8% APR on mortgage

lamaar75

I have just had a fleeting visit from a relative. She is having a hard time of it. She has lost her job and is finding it hard to get another one. She was on a variable rate with the Northern Rock for her mortgage. She said they put it up to 24% APR. She only owes £3K. She has asked them for a remortgage and now they have said all they can do is give her an APR of 19.8%. She has no debt and doesn't really want to sell as she is near family.

Can anyone offer any better solutions?

She is currently paying over £200 p/m as they made her have insurance too.

roswell

wow i hope thats some massive mistake, as you say she has no debt why doesnt she apply for a credit card / loan and pay it off if she only owes £3000 £200 a month shoudl see the credit card / laon payed off every quickly.

epz_2

given you can get 0% apr for over a year with no checks or security on most credit cards it seems mental to pay anything close to that to a bank with secuity.

i would tell the lenders to drop the rate or bolt.

jamesd

Time for a visit to the CAB for advice. 19.8% APR isn't remotely close to a normal mortgage interest rate so something odd is happening.

Will the insurance pay out when she is unemployed when it was taken out? That seems unlikely and if it won't that would be a clear mis-sale of the insurance and she would be entitled to a full refund of all premiums paid. The CAB should certainly be given details of this insurance.

Is she able to continue paying 200pm? For how long? If she can do it for 16 months to one or more family members who could lend her 3000 to clear the mortgage, getting paid 6% a year in interest so they don't lose out if she doesn't default, that would solve the problem. 33 months at 100pm would also do it.

lamaar75

thanks to all who so far have answered. she said she had asked the bank for a loan but they said no straight away, even without checking. as she has had never had a load in her life, she thought this was normal. she doesn't even know what the insurance is for as she is already unemployed.
i think the bank have just taken advantage of her and I think she needs to speak to them.