Housing Market about to implode!

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TTMCMschine wrote: »

"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 will see the ruin off some that unfortunately chose that mortgage. A very sorry affair indeed.

MORPH3US

TTMCMschine wrote: »

Irresponsible lending I think,

Queue all the people who have mortgages with The Portman sueing for all the interest ever paid back, a la bank charges :rolleyes:

meanmachine_2

A relative of mine has one of these "steppers". I had no idea.

They actually thought *all* mortgages carried a repayment fee beyond the initial low rate period.

I was shocked at this.

They can't afford to keep the same product, so are sticking the repayment charge onto the loan and remortgaging.

It's cheaper than being locked on a crippingly high rate for lordy knows how many years.

Crazy.

franklee

Here's the link:

http://www.thisismoney.co.uk/news/columnists/article.html?in_article_id=421642&in_page_id=19&in_author_id=1865

Gorgeous_George wrote: »

What percentage of homes do you think were bought using the aforementioned Portman mortgage? 0.1% maybe - or less. Hardly significant in isolation. However, there have been many low start deals from lenders eager to attract business and the cumulative effect may be more significant.

Good point, hopefully not many on this specific Portman deal. But I did read that 20% of mortgage holders re-mortgaged in 2005 to take account of the low interest rates on offer then, and many of these took two year fixes and are therefore due to come off these this year...

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meanmachine wrote: »

A relative of mine has one of these "steppers". I had no idea.

They actually thought *all* mortgages carried a repayment fee beyond the initial low rate period.

I was shocked at this.

They can't afford to keep the same product, so are sticking the repayment charge onto the loan and remortgaging.

It's cheaper than being locked on a crippingly high rate for lordy knows how many years.

Crazy.

People will begin to learn the hard way of Gordon Browns miracle economy.

KingKenny

Ad wrote: »

People will begin to learn the hard way of Gordon Browns miracle economy.

Gordy boy wonder still has some tricks up his sleeve to keep the party going me thinks.

He will announce some drastic measures in the coming weeks to help FTB'ers.

Could be MIRAS for FTB'ers

But help is on its way, SuperGord just cannot afford a HPC this side of an EARLY election?

Maybe his mate Lomax on the MPC, will be the next GOVernor, Merv found in some wood, could not take the pressure. Lomax will push for base rates of 4% due to a faltering economy?

But as for a HPC, Gordy is far to cute to allow this to take hold while he is at the wheel?:rotfl:

DaveyDave_3

This reminds me of the supposed 'mis-selling' of endowment mortgages 20 years ago.

It really MUST be the responsibility of the borrower to research the terms of any financial contract. I wonder whether these unfortunate people actually considered why the rate was so low in the first place?. I mean, 2.25% is a ridiculuous rate - did they not think that there was some form of 'pay back' coming at a later date?.

It all smacks of short-termism to me. People smiply don't understand what they are taking on. They think they have no choice - "I MUST get on the housing ladder at ALL costs". Just because the currently low interest rate gives a short term low monthly payment that people can pay at the moment, people think everything is ok without actually appreciating the long term commitment. Do you think the banks actually tell people how much money they are likely to have to pay back on a 100k mortgage over 25 years? :rotfl: . Well, it's at least 200k including interest payments.

With interest rates guaranteed to reach 6% by the end of the year with more to come next year, this could all get pretty ugly.

lynzpower

It really MUST be the responsibility of the borrower to research the terms of any financial contract. I wonder whether these unfortunate people actually considered why the rate was so low in the first place?. I mean, 2.25% is a ridiculuous rate - did they not think that there was some form of 'pay back' coming at a later date?.

its not a question of whether they read tjhe information. Even an illeterate would have been advised of this while using a broker. My broker even read out the moneyfacts form to me.

Whether you choose to take any notice of it, is another thing entirely IMHO.

I think we shall see some very unhappy people with this sort of product. 10k redpemption is crippling isnt it. especially for those who NEED to move - for whatever reason.

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KingKenny wrote: »

Gordy boy wonder still has some tricks up his sleeve to keep the party going me thinks.

He will announce some drastic measures in the coming weeks to help FTB'ers.

Could be MIRAS for FTB'ers

But help is on its way, SuperGord just cannot afford a HPC this side of an EARLY election?

Maybe his mate Lomax on the MPC, will be the next GOVernor, Merv found in some wood, could not take the pressure. Lomax will push for base rates of 4% due to a faltering economy?

But as for a HPC, Gordy is far to cute to allow this to take hold while he is at the wheel?:rotfl:

The social consequences are already incalculable. Two more years and Britain will be a wasteland.

Guy_Montag

All you can do is pay the penalty & re-mortgage. Interestingly Portman won't allow you to remortgage onto the same product (now at 3.59%)