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Housing Market about to implode!
TTMCMschine
Posts: 684 Forumite
"page 12 Financial Mail.
"Next month, the 2005 two year fixed mortgage at 2.29% on Portman - now being subsumed by rival Nationwide will revert to the BoEs base rate, plus 1.99% and borrowers are locked in untill July 2011. In other words, their rate will shoot up from 2.29% to 7.49%. Add two further, fairly probable, increases in the base rate and these borrowers will be asked to pay almost eigth per cent.
On an interest only loan of £150,000, that means monthly payments will have jumped from £286 to £999. That is an extra £713 to find each month.
But there is no cheap way out either. To get out of the deal they would face a penalty of £10,500."
Yikes! I wonder how many people took these out & whether they've realised yet. Once that news of peoples woes from this break it'll wreak havoc in the market.
Did anyone here use a Portman 2.29% deal & what will you do?
"Next month, the 2005 two year fixed mortgage at 2.29% on Portman - now being subsumed by rival Nationwide will revert to the BoEs base rate, plus 1.99% and borrowers are locked in untill July 2011. In other words, their rate will shoot up from 2.29% to 7.49%. Add two further, fairly probable, increases in the base rate and these borrowers will be asked to pay almost eigth per cent.
On an interest only loan of £150,000, that means monthly payments will have jumped from £286 to £999. That is an extra £713 to find each month.
But there is no cheap way out either. To get out of the deal they would face a penalty of £10,500."
Yikes! I wonder how many people took these out & whether they've realised yet. Once that news of peoples woes from this break it'll wreak havoc in the market.
Did anyone here use a Portman 2.29% deal & what will you do?
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Comments
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Read the article.Think it is scary news.The people who are going to be hit are the ones that never expected BOE rates to have got where they are imho.0
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You're probably right, & they probably chose the mortgage because of it's affordability at the time - if their circumstances haven't improved drastically then they'll be in trouble.
Irresponsible lending I think, I wonder how many of those mortgages were taken out?0 -
It's a common ploy though, I'm surprised that many people will have fallen for it. Loss leading rate followed by a tie in at a higher rate.
Even if 1000s have done it I don't see it causing the housing market to implode.
Really, vested interests on both sides should tone things down a bit.Happy chappy0 -
TTMCMschine wrote: »You're probably right, & they probably chose the mortgage because of it's affordability at the time - if their circumstances haven't improved drastically then they'll be in trouble.
Irresponsible lending I think, I wonder how many of those mortgages were taken out?
Irresponsible borrowing I say!¬
What person, these days, given the easy access to information, that we have at our finger tips litterally.............. does'nt fully research anything?
I spent a few hours researching the video camera I was about to buy and that was only 400 quid.....never mind mega thousands on a house!
Btw its a cannon mvx35i and its brilliant0 -
That's irresponsible selling.Happy chappy0
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tomstickland wrote: »It's a common ploy though, I'm surprised that many people will have fallen for it. Loss leading rate followed by a tie in at a higher rate.
Even if 1000s have done it I don't see it causing the housing market to implode.
Really, vested interests on both sides should tone things down a bit.
I think it will have a significant effect because it will be big news & will seriously damage sentiment. It will also have implications, maybe not quite so severe, but implications none the less for the tens of thousands of people who took out similar products & who's rates will be resetting this year or early next.0 -
TTMCMschine wrote: »
Yikes! I wonder how many people took these out & whether they've realised yet. Once that news of peoples woes from this break it'll wreak havoc in the market.
Did anyone here use a Portman 2.29% deal & what will you do?
Oh no it won't.:pWell life is harsh, hug me don't reject me.0 -
Irresponsible borrowing I say!¬
What person, these days, given the easy access to information, that we have at our finger tips litterally.............. does'nt fully research anything?
I spent a few hours researching the video camera I was about to buy and that was only 400 quid.....never mind mega thousands on a house!
Btw its a cannon mvx35i and its brilliant
Normally I would agree with you Nelly, but this is extremely bad lending practice. I wonder how many poeple are on this."Mrs. Pench, you've won the car contest, would you like a triumph spitfire or 3000 in cash?" He smiled.
Mrs. Pench took the money. "What will you do with it all? Not that it's any of my business," he giggled.
"I think I'll become an alcoholic," said Betty.0 -
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rates like that always jump up a lot because you arnt paying all the interest off.
there is a place for such loans eg if you are likely to earn more in a few years time, anyone who took out one of these loans expecting to keep paying the same is a moron, even without the recent rate rises they would be paying 6.49% and should have budgeted acordingly0
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