Heliodor loan increase by £200 a month

Horsfield

Hello - first time poster...

In 2007 I bought a house and had a loan for 25k secured on it for renovation work. Mortgage and Loan both from Northern Rock/NRAM/Heliodor/Topaz whatever they are called this week.

When I moved house in 2019 I had to take the loan with me. It increased from around £114 a month to £330+ per month. 

I still have years left on this as it was the same term as the mortgage.

Does anyone know if they can do this? Is there any way I can challenge it? It seems a little unfair. Of course these people need to make money and quite rightly I should repay what has been asked but I'm wondering if there is a limit as to how much they can whack it up! 

Thank you in advance for any help.

DullGreyGuy

Horsfield said:

Hello - first time poster...

In 2007 I bought a house and had a loan for 25k secured on it for renovation work. Mortgage and Loan both from Northern Rock/NRAM/Heliodor/Topaz whatever they are called this week.

When I moved house in 2019 I had to take the loan with me. It increased from around £114 a month to £330+ per month. 

I still have years left on this as it was the same term as the mortgage.

Does anyone know if they can do this? Is there any way I can challenge it? It seems a little unfair. Of course these people need to make money and quite rightly I should repay what has been asked but I'm wondering if there is a limit as to how much they can whack it up! 

Thank you in advance for any help.

What does your agreement state? 

It certainly can say its X% for Y years and then becomes standard variable rate which is BoE Base Rate + Zpts

Horsfield

Thank you - I'm not sure to be honest. I was told it would increase and become variable as soon as I moved house. That is what has happened. I'll have to see if I can dig the paperwork out. 

retiredbanker1

Pop over to the Mortgage Board - is your credit files in a position that would let you re-mortgage the whole amount under a new fixed rate mortgage?

sourcrates

Probably your best bet is what the poster above advises, secured loans tend to have variable rates of interest and they can charge pretty much what they want, never a good choice, been there myself.

saajan_12

We can't possibly comment whether they can change the rate without seeing what you agreed they could change the rate to! 

Also look for the early repayment terms in your original agreement - you might be better off essentially remortgaging the lot into one standard mortgage on the new property. 

Hoenir

Horsfield said:

Does anyone know if they can do this? Is there any way I can challenge it? It seems a little unfair. 

If you were aware of this when you moved. Then where's the unfairness. Northern Rock ceased to trade many years ago. Best approach would be to speed up repayment of the debt. Interest rates are unlikely to reduce again to those levels experienced in the recent past.