NRAM standard variable rate scam
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Unfortunately this forum has plenty of examples of people who post about their impossible situations, get answers they don't like then resurface after a period magically having supposedly got everything back, your post just smacks of this sort of thing, if you accept the advice and move on then good on you.
Of course this forum has posts from plenty of people in impossible situations for, isnt that what it's designed for - so that we can try and help each other rather than spending our day being a keyboard warrior posting unuseful things to those seeking help, often people at their lowest point. I would suggest if you haven't got anything constructive to say you scroll on to the next post and leave the posting to those who are trying to give comprehensive answers and help! Fingers crossed you accept the advice and move on! :cool::cool:0 -
lebowski111 wrote: »Whilst I understand your point, perhaps if people had been able to switch to a new competitive rate they would have had the money to pay back the loan?
Before the GFC interest rates were higher across the board. Base rate was 5.5%. Few people are paying higher than that even now some 10 years later. As a consequence should have been able to find some money to start repaying the capital owed. Every £10 repaid off the balance would have reduced the interest charged the following month. Over time the speed of repayment would naturally accelerate. With mortgages there's no quick answer to repaying them. Just a long hard slog.0 -
lebowski111 wrote: »Of course this forum has posts from plenty of people in impossible situations for, isnt that what it's designed for - so that we can try and help each other rather than spending our day being a keyboard warrior posting unuseful things to those seeking help, often people at their lowest point. I would suggest if you haven't got anything constructive to say you scroll on to the next post and leave the posting to those who are trying to give comprehensive answers and help! Fingers crossed you accept the advice and move on! :cool::cool:
You've been given the correct information already by several people - it is helpful, it's just not what you want to hear hence this post. You won't get money back, move on and stop worrying.0 -
Thrugelmir wrote: »Before the GFC interest rates were higher across the board. Base rate was 5.5%. Few people are paying higher than that even now some 10 years later. As a consequence should have been able to find some money to start repaying the capital owed. Every £10 repaid off the balance would have reduced the interest charged the following month. Over time the speed of repayment would naturally accelerate. With mortgages there's no quick answer to repaying them. Just a long hard slog.
Yes agreed but the issue and the reason people are trappped is the house price crash, so couple both aspects together and you have a hopeless situation. I have been paying off considerably more than the initial fixed mothly price and it has taken me 10 years to get to a point where I am out of negative equity. Had I been able to move to a reasonable rate and do a product swap it would have taken me far less time to bring it out of negative equity. I just dont agree that I was not able to either swap to a product on a fair interest rate or have the svr at the same elevations from base rate as in the illustration. If i was deemed a high risk at the point i took the mortgage the illustrations should have reflected this. Thanks again for your input, appreciate having another perspective;););)0 -
A lender will have a range of quality on their books. The nice low risk stuff and a certain degree of higher risk stuff. A good quality mortgage book will have mostly clean safe mortgages with only a small proportion going bad. So, the interest rates will be lower.
The high risk lending creates high risks of loss of money. More people in arrears, defaults and repossessions. A normal lending back will see these offset by the higher quantity of low-risk borrowers. So, there is an element of cross-subsidy. i.e. safe borrowers are paying for the smaller number that are going to fail.
NRAM is the bad book of NR. So, a far higher proportion of is going to go bad. it lacks the cross-subsidy of the lower risk borrowers. The risk is spread over a smaller number of borrowers (and that number is getting smaller all the time) and the borrowers that remain are viewed as an increasingly high risk.
Think of it like this....
If you were to lend £10,000 to 100 people and you believed that 5 of those would fail to repay fully and create costs of £8,000. You would spread that £8,000 cost over the other 95 people. If you had a lending book the quality of NRAM, you are looking at around 50-60 of them failing and the costs of those being spread over the other 40-50 people. i.e. increased costs and less people to pay those increased costs.
The above explains why the interest rate is higher. If you dont get it, we can throw some more examples/variations at you to see if that helps.
However, you are higher risk as you are now in negative equity. That puts you higher risk than someone that is say 80% LTV. The problem though was that NR failed to analyse and cost in risks when it lent money. That is why it failed. It should have either charged you more from the start or refused to lend it to you. Or not so much you as 95% at point of sale is not bad. The problem is more the 125% mortgages on interest only basis. You got dragged down because of NR and others.
Going back to the 90s when negative equity last happened and people had just paid 15% interest rates, the only way to get out was to overpay the mortgage and wait for house prices to recover.
Again great response thanks. Totally understand where you are coming from but my LTV was rubbish at the time I applied for the mortgage, sureley i should have been deemed high risk then and the parameters set accordingly? I suppose what I'm saying is I was given figures at point of sale, since then through nothing I have done and I have been considered high risk and the figures altered to reflect that. Should I not have had elevated figures to start with then I could have made an informed decision?? Do you see what I mean? In essence I'm now paying for everyone else's bad debt when I have broke my back to fulfil my obligations and have managed to scrimp and overpay to get myself out of the situation0 -
Again great response thanks. Totally understand where you are coming from but my LTV was rubbish at the time I applied for the mortgage, sureley i should have been deemed high risk then and the parameters set accordingly?
if you look at deals today, you will see that the lower the LTV, the better the interest rate. Problem is that NR completely failed when it came to risk assessment.Should I not have had elevated figures to start with then I could have made an informed decision??
Today you would be paying more. But we cant change the past.In essence I'm now paying for everyone else's bad debt when I have broke my back to fulfil my obligations and have managed to scrimp and overpay to get myself out of the situation
And life sucks. I am about to get my annual FCA levies. Over £10,000 I have to pay and its to cover the bad firms that do things that I would never dream of. Its not fair but that is the nature of costs being spread over a certain number of people. The current generation are paying for the spending habits of the state in the 60s & 70s. The next generation will be paying for the debt we rack up today. Loads of things are unfair.
At some point, there will be a way to deal with mortgage prisoners. Probably too late for you. But there is no scheme or method to help you and as there is no contract breach, there is no wrongdoing.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
if you look at deals today, you will see that the lower the LTV, the better the interest rate. Problem is that NR completely failed when it came to risk assessment.
Agreed, I should never have been ggiven the mortgage in hindsight but hey ho.Today you would be paying more. But we cant change the past.
No we can't but my point is they are changing the past arent they, by not giving me illustrations or figures reflective of a high risk when selling it to me but then deeming me high risk once i had the product?
:eek::eek: thats a lot of money. Yes i know it sucks I just feel it's a double blow dealing with the inflated svr in addition to the negative equity. Wouldn't think of complaining had there not been better svr rates available at the time. Seems unfair to hike those of people who don't have the option to go elsewhere.And life sucks. I am about to get my annual FCA levies. Over £10,000 I have to pay and its to cover the bad firms that do things that I would never dream of. Its not fair but that is the nature of costs being spread over a certain number of people. The current generation are paying for the spending habits of the state in the 60s & 70s. The next generation will be paying for the debt we rack up today. Loads of things are unfair.
Also with regards to no contractual breach, I agree there hasn't been but when the bank charges thing first kicked off, there was no "wrong doing" or contractual breach but the fees were deemed disproportionate to the actual costs. I was hoping to go along the same vane of the interest rate being disproportionately to that quoted at point of sale?0 -
You are a Mortgage prisoner.
We have a Facebook group offering support
UKMortgageprisoners
Lots of people in the same boat trying to tackle the unfair SVR we have been secured in whilst the rest of the world have enjoyed low rates.0 -
He may well be a ‘mortgage prisoner’ but he’s certainly no longer active on this forum0
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