expensive mortgage

debonair

I was chatting (moaning) to my friend about the rising cost of living and how your wage doesn't seem to go very far and she told me she is paying £600 per month mortgage. Seems she took out 87k, 10 years ago with Halifax, I thought this was expensive given the low interest rates at the moment - my mortgage with lloyds is £250 per month on 50k ten years in. Then she says its an interest only mortgage!!!!! I nearly fainted at this and suggested she shop around for a better deal. They took a mortgage holiday recently when her partner was injured and his sick pay ran out. Apparently the Halifax considers them to be in arrears even though they agreed to suspend payments for three months. They cannot remorgage with anyone until they catch up. Also they are classed as not having a good credit rating as her partner has had a lot of loans in the past not that he hasn't paid -just that he has had a lot of loans and credit card debt.
Are there any banks, building societies etc that would give them a fairer deal than the Halifax once they have caught up on their 'arrears'? They pay their way, never default but I think they are being ripped off. The halifax's own adviser advised and arranged their mortgage, they have only just come out of the fixed rate and the payments havent dropped at all, I dread to think what interest rate they are paying! And interest only - what will happen at the end of the mortgage (5 years left) when they have no money to pay the capital? She is beside herself with worry over this and now I know, I am too! Any suggestions would be much appreciated.

ACG

Nobody will touch them any time soon with mortgage arrears.

That to one side, what you are saying does not stack up.
Halifax Standard variable rate is 3.99%. £87k at 3.99% on interest only is around £290 a month.

It would have to be nearer 8% for your figures to stack up and that is very unlikely.

Thrugelmir

debonair wrote: »

Are there any banks, building societies etc that would give them a fairer deal than the Halifax once they have caught up on their 'arrears'? They pay their way, never default but I think they are being ripped off.

They've ripped themselves off. Your efforts would be better focussed on helping them to manage their money better in the future. As that's the only way they will be able to improve their financial situation.

debonair

ACG yes I thought the interest rate must be too high. Could they have been taken for a ride by Halifaxs own adviser especially given that its interest only or could they be paying a high price for her partners poor credit rating do you think?

ACG

Halifax standard rate is their standard rate no matter what their credit history.

I think you are getting half a story. Unless you have seen the paperwork which shows her mortgage amount, rate and repayments I would assume that.

getmore4less

debonair wrote: »

I was chatting (moaning) to my friend about the rising cost of living and how your wage doesn't seem to go very far and she told me she is paying £600 per month mortgage. Seems she took out 87k, 10 years ago with Halifax, I thought this was expensive given the low interest rates at the moment - my mortgage with lloyds is £250 per month on 50k ten years in. Then she says its an interest only mortgage!!!!! I nearly fainted at this and suggested she shop around for a better deal. They took a mortgage holiday recently when her partner was injured and his sick pay ran out. Apparently the Halifax considers them to be in arrears even though they agreed to suspend payments for three months. They cannot remorgage with anyone until they catch up. Also they are classed as not having a good credit rating as her partner has had a lot of loans in the past not that he hasn't paid -just that he has had a lot of loans and credit card debt.
Are there any banks, building societies etc that would give them a fairer deal than the Halifax once they have caught up on their 'arrears'? They pay their way, never default but I think they are being ripped off. The halifax's own adviser advised and arranged their mortgage, they have only just come out of the fixed rate and the payments havent dropped at all, I dread to think what interest rate they are paying! And interest only - what will happen at the end of the mortgage (5 years left) when they have no money to pay the capital? She is beside herself with worry over this and now I know, I am too! Any suggestions would be much appreciated.

£600pm on £87k interest only is 8.27%


unlikely so there is more to this.

debonair

ACG yes I saw a statement that showed they are paying £600 per month, I assumed that banks /building societies gave different rates according to credit histories/risks - are you saying that they only charge one rate, that is whatever the going rate is, in this case 3.99?

Thrugelmir

getmore4less wrote: »

£600pm on £87k interest only is 8.27%


unlikely so there is more to this.

Most likely the arrears are included in the £600 pm.

ACG

Then their mortgage is more than £87k

After the tie in period it is 3.99% yes. Unless the £600 is them clearing their arrears?

debonair

Thanks for your thoughts on this. I really was hoping I could say to her when you clear the arrears try this bank/company who can give you a better deal but I suppose these things are never so simple! I will see if I can find out if there is more to this but I dont think there is, I saw the mortgage statement and the payments were on there, I thought because Halifaxs own adviser sorted the mortgage, maybe the high cost was down to that. I just cant understand why theyre paying so much on such a small mortgage

chalkie99

debonair wrote: »

I was chatting (moaning) to my friend about the rising cost of living and how your wage doesn't seem to go very far and she told me she is paying £600 per month mortgage. Seems she took out 87k, 10 years ago with Halifax, I thought this was expensive given the low interest rates at the moment - my mortgage with lloyds is £250 per month on 50k ten years in. Then she says its an interest only mortgage!!!!! I nearly fainted at this and suggested she shop around for a better deal. They took a mortgage holiday recently when her partner was injured and his sick pay ran out. Apparently the Halifax considers them to be in arrears even though they agreed to suspend payments for three months. They cannot remorgage with anyone until they catch up. Also they are classed as not having a good credit rating as her partner has had a lot of loans in the past not that he hasn't paid -just that he has had a lot of loans and credit card debt.
Are there any banks, building societies etc that would give them a fairer deal than the Halifax once they have caught up on their 'arrears'? They pay their way, never default but I think they are being ripped off. The halifax's own adviser advised and arranged their mortgage, they have only just come out of the fixed rate and the payments havent dropped at all, I dread to think what interest rate they are paying! And interest only - what will happen at the end of the mortgage (5 years left) when they have no money to pay the capital? She is beside herself with worry over this and now I know, I am too! Any suggestions would be much appreciated.

I'm not sure this has been taken into consideration. It appears to be a 15 year mortgage which might explain higher repayments. Perhaps the OP's term is over a longer period?