Northern Rock End of Mortgaged Deal (Merged Threads)

MarkyMarkD

How big is your mortgage, sappho? And what are your ages and income for that matter?

sappho_2

£60000 Marky over 22 years interest only. House just been valued at £280000. Pension and incapacity benefit income of around £18000, partner on job seekers (also old!). At lease Rock will give mortgages to older people, most lenders ask you to pay it off at 65 years of age, I'll be 79 when mine finishes..quote=MarkyMarkD;8958815]How big is your mortgage, sappho? And what are your ages and income for that matter?[/quote]

kingkano

poppy10 wrote: »

A high SVR is costly for the borrower, not the bank - the bank gets more money incoming from a higher SVR.

At the moment Northern Rock can either collect a hefty fee in ERC and say goodbye to you, or keep you on their books and get a good income from the high SVR. Why should they voluntarily waive the ERC and lose that money?


Also, the Together mortgages (which make up 1/4 of NR's mortgage book) were by definition sub-prime, by US government standards.

You misunderstood that part, partly my fault for bad wording there. I meant costing them so much compared to the SVR. ie the svr is 7.59 and I am on 5.69 fixed. A previous poster said this is hurting NR who have to source the money to keep funding my mortgage and that others on the svr have to pay because of it?? (which I did quote at the start of my post, thought it would have read ok because of that)

At any rate an ERC is only a profit if they can get it out of you. Of course there is no way anybody will want to pay them an ERC. Yet surely us on the good rates according to the previous poster are costing them the most and they as said want to get rid of mortgages, why not let us out and keep those they can on SVR to make a nice profit??? (contrary to the situation you described)

jamesd

kingkano wrote: »

I dont understand it because everybody (press etc) keeps saying NR want shot of their mortgages. ... But anybody who phones NR and asks to leave their deal early has no joy. Pay the ERC they say.

The interest rate difference costs them money slowly. The ERC is an immediate lump sum amount. It's better for them to get that lump sum if they can. If someone wants to leave for another deal, send them an offer letter saying that you're willing to leave and reduce their funding problems provided they do not charge you the ERC if you do so, contact you if they are interested in accepting your offer. They probably won't accept, but maybe they will.

At the moment there are probably a fair number of people who are just choosing to leave and are willing to pay. Give it time and maybe that will change and they will be more receptive.

kingkano wrote: »

Also remember not everyone who went to NR is sub prime borrowed over 100% etc. They did offer very competitive long term fixed rates all last year. These people on the long term fixes must be hurting NR in the same way as you describe??

Right. Everyone below what they have to pay savers is hurting and has to be paid for by those on SVR or perhaps eventually by taxes. Though at least some of this is still financed by longer term Granite funding so there will be a point where the remaining mortgages do become profitable.

The credit crunch will probably be over in 4.5 years but inflation is likely to rise between now and then due to lowered interest rates. So it looks quite likely that that will be a time of high interest rates as the BoE tries to get back on track with inflation.

lotto-dreamer, well, the directors seem to be out of a job, so they didn't get off completely free. But yes, they were the people who were supposed to be managing the bank's risk and who were caught out.

bernice, your deal is fine, so no reason for you to switch. If you see a better offer, send NR a letter saying that you're willing to leave and help their funding problems if they waive their ERC, let you know if they are interested.

poppy10, the people on SVR are generally no longer tied in and subject to an ERC. They can leave at any time without penalty if they can find another lender. There might be a few who have an overhang ERC that includes a time on SVR but it won't be many.

kirstess, talk to a mortgage broker. It's common to be able to add mortgage fees to the mortgage amount so they don't come out of your pocket. You're probably paying way more in interest than even a fee-free deal from another lender.

sappho, talk to a mortgage broker. It looks as though it'll be possible to arrange something. Bristol and West, Woolwich/Barclays, Mortgage Trust and Preferred are some lenders who might be interested.

poppy10_2

jamesd wrote: »

poppy10, the people on SVR are generally no longer tied in and subject to an ERC. They can leave at any time without penalty if they can find another lender.

I know that! Did you actually read my post?

poppy10 wrote: »

At the moment Northern Rock can either collect a hefty fee in ERC and say goodbye to you, or keep you on their books and get a good income from the high SVR.

MarkyMarkD

No, tommy, and welcome to MSE.

There's no point you leaving before 1 July as you will have a huge ERC to pay if you leave earlier.

You didn't tell us how much your unsecured element is - I presume that £93k is the secured element only? In which case it will be virtually impossible to remortgage the whole lot.

What do you reckon is the current value of your property and what is your total debt, including unsecured?

tommyc352

Hi Mark

The 93k is the combined secured and unsecured elements.

Not sure if I was clear, was trying to say should I start the remortgaging process in April rather then May in order to get a new deal sorted by July/August

Were guessing the house is around the 105k mark (thought it was best to be conservative on this. It still has work to be done, ie finishing the kitchen etc - but we will do that with our own cash, as I wouldn't think now is the time to be taking on more debt)

MarkyMarkD

Ah, well, if you have a combined LTV of under 95% it shouldn't be that hard to remortgage elsewhere, although you will probably have to pay an HLC or a higher rate to reflect the high % borrowing (or maybe not, if the value has increased nicely).

In that case you could start the remortgage process asap because most offers are valid for 6 months. Delaying isn't likely to help matters particularly.

tommyc352

Thats great news, ill hold fire until April, as I should have enough money to pay all the fee's up front rather then add to the mortgage.

Thanks for the prompt answer

Hobao

OK, just joined after reading this thread and would like to put my 2 cents worth in.

First Up I am a NR customer with a 175k mortgage on a house I paid 172k for 10 months ago (approx value now 185k). I have a 5 year deal (4 y 2m left). I am also paying £100 pm into a cash Isa to help pay the 90% secured part off. I have an income of £40k pa (25k base and 15k overtime/bonus) and the wife earns 8k on part time hours. I have a clean credit rating, No CCJ No Defaults on loans etc (Infact dont have any loans/CC debt)

Our original plan was to ride the 5 years out and once kids older (wife working full time) and more equity in house move to repayment.

However... With the current climate and NR what is the likley hood of NR allowing customers such as me move to an alternitive lender or upgrade to repayment with them with out paying massive exit fees?

In short what are my options? Or am I better staying put and sticking to my original plan?