Northern Rock End of Mortgaged Deal (Merged Threads)

dasilva_2

As I have said before, my mortgage is with NRAM. I do see both sides of the arguments on this thread. I am quite happy to take responsibility for my actions and I am quite prepared to pay for the mortgage as I agreed to do when I took it out. What is lacking is any honesty and integrity from both the banking sector and government. None of us on here (unless you are actively involve in NR) have any idea as to what direction NRAM is going to take, so we mortgage holders live in a cloud of uncertainty. I am worried that NRAM rate is going to increase disproportionately to The BOE or any other mainstream rate and I think if it did it would be unfair to the remaining mortgage holders.
I think we come on here to vent our frustration because for some of us there is very little we can do. The people who effectively 'defrauded' huge bonus's have long since gone into the sunset and the government hasn't shown itself to be, lets say entirely responsible with any money. So we are left to carry the can.
Being a conservative at heart I would have hoped that after the election things may improve, but again I am a realist and think they will be exactly the same. But thats another story.
But whatever happens live goes on.

dasilva_2

To the online spell check police I have misspelt 'life'

Mary_Hartnell

You can always use "Firefox" and spell check as you post.*
Alternatively you can click edit and put it right.

Alternatively you can click edit and change it.




Like that if you want to [STRIKE]live[/STRIKE] life.
Updating the reason is optional

* If you are dislechic like wot I am and it is not clever enough to realise when I'm posting rubbish .

dasilva_2

Having read about the SVR rises by building societies and the fact that they blame the need for these rises to attract savers, should I be at all reassured that NRAM does not need to attract any savers so that excuse could not be used. Maybe that could be a positive side to the split.

dasilva_2

Mary, I managed to use the editing, thank you. Firefox may not realise I am posting rubbish, but I am sure some readers think I am.
(by the way it tells me realise is realize.)

zipman23

dasilva wrote: »

Mary, I managed to use the editing, thank you. Firefox may not realise I am posting rubbish, but I am sure some readers think I am.
(by the way it tells me realise is realize.)

That'll be the American English version. Boo. You can change the language to English (English) and I'd probably be able to tell you how to do that if I used Firefox but I don't

sticher

Not sure if this is the right place but I need some advice please on my Northern Rock fixed rate mortgage which ends July of this year.

The rate is fixed at 5.19 until July when the rate goes down to 4.7 (or thereabouts). However, then my repayments will go up by over £30 a month.

I rang them today to ask how this could be right and they told me that as we had missed some payments back in 2008 interest had been added and the result was that our balance had increased.

I pointed out that when we missed the payments we were told that our overpayments (made previously) would cover the unpaid premiums and that in effect we would be upto date with the mortgage. The man I spoke to today said that even so interest would have been added for the missing payments - because the interest we were charged while overpaying would have been lower. They had added £1100 pounds interest to cover this undercharge of interest.

I pointed out that we had never been told that our mortgage would increase after using the overpayment to cover the missed payments and the man today apologised for this.

I cant get my head around this though - have we been charged more interest this way?

Thanks for any replies.

MarkyMarkD

Somerset wrote: »

You seem to be confirming that NRAM have a high risk portfolio and are sub prime. Is that correct ?

You ask why should taxpayers subsidise NRAM's borrowers - I don't think anyone is expecting that. We were expecting a level playing field, on a par with other mainstream lenders (SVR wise), not sub prime rates.

If NRAM hike their SVR'S up, that won't be about 'the taxpayer not subsidising us' - that will be us borrowers subsidising the taxpayer ie bleeding us dry as harshly as possible to maximise the cashflow back to the Treasury.

We are just the inconsequential cannon fodder that may potentially be screwed over as a result of the ex NR board of director's decisions, and the government's determination not to let a bank fail. I've already subsidised the government's decision once,as a taxpayer - I'm not going to do it again as a mortgage payer.

I am not saying that NRAM's borrowers are sub prime. But on any rational measure they are higher risk than most lenders' portfolios - high LTV is generally an indicator of risk; high income multiples are generally an indicator of risk. In aggregate, NRAM's mortgage book will be riskier than other mainstream lenders, and it will incur higher losses. Therefore, all things being equal, it should charge higher rates - whether that's a higher SVR, or higher product switch rates (if indeed they are available).

Regarding the level playing field argument, it is not taxpayers' fault that NR lent at too low a rate for the risk. That is a historical fact, but it's not taxpayers' liability to pick up that under-pricing.

Correcting that under-pricing won't represent taxpayers "bleeding you dry". It would if they set the rate so high that NRAM made a higher return than it should for the risk it faces. But it would not if it simply covered NRAM's costs, and lending losses, and a reasonable rate of return on taxpayers' investment in the business.

It is slightly strange that those who have benefitted from under-priced mortgages (for the level of risk they represented), are now complaining that it is not their fault and that they shouldn't bear the cost of setting things right. Either you bear it, or taxpayers bear it. There is no mystery pot of gold to bear it.

MarkyMarkD

sticher wrote: »

Not sure if this is the right place but I need some advice please on my Northern Rock fixed rate mortgage which ends July of this year.

The rate is fixed at 5.19 until July when the rate goes down to 4.7 (or thereabouts). However, then my repayments will go up by over £30 a month.

I rang them today to ask how this could be right and they told me that as we had missed some payments back in 2008 interest had been added and the result was that our balance had increased.

I pointed out that when we missed the payments we were told that our overpayments (made previously) would cover the unpaid premiums and that in effect we would be upto date with the mortgage. The man I spoke to today said that even so interest would have been added for the missing payments - because the interest we were charged while overpaying would have been lower. They had added £1100 pounds interest to cover this undercharge of interest.

I pointed out that we had never been told that our mortgage would increase after using the overpayment to cover the missed payments and the man today apologised for this.

I cant get my head around this though - have we been charged more interest this way?

Thanks for any replies.

If you overpay on a mortgage, your capital balance reduces and you are charged less interest in following months.

If you underpay (by using up the past overpayment), your capital balance increases (or reduces by less than it otherwise would) and you are charged more interest in following months.

Overall, if you overpay by say £10,000 one year, and then underpay by £10,000 the next, in the third year you will pay slightly LESS interest than you would otherwise have done, because you have effectively made your due payments, but earlier than due.

So, overall you have not lost out but actually benefitted from overpaying, even if you've then had the overpayments back.

sticher

Thanks for that Marky - I just had a mental block on that and couldnt see what they were trying to tell me.

Still a bit of a shock to find that even with a lower interest rate I will be paying higher monthly repayments. Didnt think about that before.

Thanks again.