Greedy Mortgage Company

Jordanjames

My mortgage is with Heliodor Mortgages (Passed over by NRAM) the interest rate has increased 5 times since 1st February 2022. The rate went to 4.29% then 1st April 4.49% 1st May 4.64% 1st August 5.14% and now from 1st Oct 5.74%
I have an interest only mortgage of £407.000 and still 9 years to go.
The repayments have increased since February from £1400 per month to £1946.41 per month from 1st October
I have contacted the mortgage company to ask for help, they advised me to change mortgage company, or sale the property.
We Are in 58 years old who is going to give us a mortgage now?
Any advice will be welcome.

CSL0183

Jordanjames said:

My mortgage is with Heliodor Mortgages (Passed over by NRAM) the interest rate has increased 5 times since 1st February 2022. The rate went to 4.29% then 1st April 4.49% 1st May 4.64% 1st August 5.14% and now from 1st Oct 5.74%
I have an interest only mortgage of £407.000 and still 9 years to go.
The repayments have increased since February from £1400 per month to £1946.41 per month from 1st October
I have contacted the mortgage company to ask for help, they advised me to change mortgage company, or sale the property.
We Are in 58 years old who is going to give us a mortgage now?
Any advice will be welcome.

It’s not the greedy mortgage company though.

You are obviously on a tracker mortgage or an SVR and have took that risk. This year due various reasons (namely huge inflation) the BOE have increased their rates at every meeting. They will continue to do so for quite a while yet and if you do not fix then you will see further increases. 

This has nothing to do with your lender. You need to fix ASAP before the situation gets worse.

CSL0183

Also, how are you going to pay the £407k? BOE Interest rate is currently 2.25% with a prediction that they will be up at 6% by the middle of next year. 

Your payments are going to double if not treble. If you cannot fix now, I suspect it’s going to get very hard over the next few months as these rates are only going one way. 

PK_London

What was your plan to repay the capital? You do realise that as long as you're only paying the interest you are just renting the property. I will be amazed if house prices hold up if base rates rise as high as they're expected to. You need to fix as soon as you can or sell and downsize.

Fromdownwest

So you have enjoyed a period of low interest rates, and made zero payments to your capital balance. Now rates are increasing, and your gamble is now not on the favourable side of the coin, it is the lenders fault.

Do you have anyway to repay the capital balance? If not, that woudl be more a concern to me than the increase in the rate of interest being charged.

MWT

Jordanjames said:

My mortgage is with Heliodor Mortgages (Passed over by NRAM) the interest rate has increased 5 times since 1st February 2022. The rate went to 4.29% then 1st April 4.49% 1st May 4.64% 1st August 5.14% and now from 1st Oct 5.74%
I have an interest only mortgage of £407.000 and still 9 years to go.

Probably time to revisit the exit strategy you have planned to use in 9 years time and see if you can bring that forward...

Getting a new mortgage at 58 is not as hard as you might think, as long as you have the income to support it and a credible plan to continue working for a little while past retirement, or even a solid pension plan to support your income into retirement...

If none of that is an option and you have a decent amount of equity in the property, there may be other options open to you, but are we talking about £407k outstanding on a £2m property or is it more like a £600k property, or less...?

london21

The costs to the lender has also gone up due to the BOE increase in rates.

You are better off been on a fixed rate than variable. 

There will be 8 rate changes in 2022, we have already had 6 and 2 more expected November 3rd and December 15.

Interest rates and Bank Rate | Bank of England

Chambo1901

I ask my lender about interest only on 110K value at 220k bloke nearly laughed me off the phone , ask me what my portfolio was like.

london21

https://www.financialreporter.co.uk/nationwide-increases-fixed-rates-by-between-90-120bps.html 

MWT

Chambo1901 said:

I ask my lender about interest only on 110K value at 220k bloke nearly laughed me off the phone , ask me what my portfolio was like.

It was a very different world when most of these maturing interest only mortgages were initially taken.

They would be impossible to obtain these days without a solid repayment vehicle, a large deposit and a high salary, none of which were originally a requirement, if you go back far enough, even though they should have been...

rgannon45

I have been trying to contact Heliodor for a few weeks - literally been waiting on the phone for an hour but gave up in the end - anyone know who I can go to if I'm unable to contact them.