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interestrateripoff

Nr 125% Mortgage - Interest Rate Now 13% Claims Wail

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http://www.dailymail.co.uk/money/mortgageshome/article-2775515/Northern-Rock-home-loans-crippling-rates-13.html

Homebuyers who took 125 per cent mortgages with failed bank Northern Rock are today being forced by the Government to pay interest as high as nearly 13 per cent.

These forgotten victims of the banking crisis are being left stranded - they can’t move home and are unable to take a cheaper mortgage deal - because of the eye-watering interest rates being imposed on them.

Those affected are borrowers who took out the now-infamous Northern Rock Together mortgage. This allowed buyers to purchase a house without a deposit, take loans up to 25 per cent more than the value of their property and borrow up to six times their income.


The Government bailed out Northern Rock in 2007 and split it into two. Many of the Together loans were considered high risk and taken over by a new state-owned business called Northern Rock Asset Management.

Today, Money Mail can reveal that, almost exactly seven years later, these customers face being made to pay crippling rates of interest. They feel as though they are getting no help from a bank that, while relying on taxpayers’ cash to stay afloat, is doing nothing to help them stay in their homes


Karen Hazlett is among those paying interest of 12.79 per cent on her Northern Rock loan. The 44-year-old hairdresser took out a Northern Rock mortgage in 2006. At the time she was renting in her home town of Barrow-in-Furness, Cumbria, following a relationship break-up and struggling to save for a deposit.

House prices were soaring and every month a property seemed further out of her grasp. Then a mortgage adviser told her there was no need to save - she could borrow the full cost of the £75,000 two-bedroom house she wanted. Karen signed up for the Together mortgage.

She borrowed £83,000 in total — a £67,500 mortgage and a £15,500 personal loan. Over the first five years she paid interest at 5.89 per cent; this later dropped to 4.79 per cent when her original deal was over and she moved on to the bank’s standard variable rate.

But after interest rates plunged, Karen shifted the mortgage part of her loan to a cheap fixed-rate deal with Nottingham Building Society in 2012. At this point, Northern Rock wrote to her to say that because she had switched the mortgage away from the bank, it was entitled to hike the interest rate on the personal loan component — and her interest rate would jump from 4.79 per cent to 12.79 per cent.

Monthly payments doubled from around £90 to £164. She says she has tried repeatedly to switch the loan to a cheaper deal with another bank, but has been turned down. The best personal loan rate on the market is currently around 4 per cent.

Good job she listened to the well informed mortgage advisor then... Look you really can't afford this but I've got a way you can....

So she's saved money on her mortgage but then loses the privilege rate on the personal loan?

A future miss-selling scandal?

Edited by interestrateripoff

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http://www.dailymail.co.uk/money/mortgageshome/article-2775515/Northern-Rock-home-loans-crippling-rates-13.html

Good job she listened to the well informed mortgage advisor sales person on commission then...

Spelt our for the less well informed.

Much like 2nd hand house salesmen.

http://en.wikipedia.org/wiki/Estate_agent

"It is customary in the United Kingdom and in Ireland to refer to real estate or real property simply as property. Some people in the UK use the term "2nd hand house salesmen" to describe estate agents due to their business being much likened to 2nd hand car salesmen."

:lol:

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ah - the 'victims' who probably did not read the small print and 'must get on the ladder'

surely she can take out a cheaper loan and pay off the NRAM loan?

why should a 'loan' be at a mortgage rate when it is unsecured?

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Just goes to show banks and lenders can charge what they like for their money.....bofe base rate plays little part....same as energy companies charge what they like, wholesale prices pay little part.

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So it's just on the 25% personal loan part. Big deal, no mention of what she saved by moving the mortgage which may have dwarfed the personal loan hike. She should overpay it with the difference.

8 years after purchase, people still have problematic nominal debts. It wasn't supposed to turn ought like this, eh wageflationistas?

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I wonder what the interest rate will turn out to be on HTB deposits that are unable to be paid back after 5 years?

So long as the people remain in the same home, after 5 years an annual fee is levied; this starts at 1.75% of the guaranteed amount, and this fee will itself rise by RPI + 1% every year after that.

It'll quickly turn into a 13th mortgage payment per year, but without the 13th wage cheque to pay it.

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Surely personal loans are repayable over a timescale of months, or years you could count on the fingers of one hand. How come one from 2006 has yet to be repaid in 2014?

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In northern ireland ---part of the uk prices are still down nearl 45% since 2007

Lucky you.

Estate agents have pushed asking prices round Northampton to 20-30% above 2007 looney prices.

There is a constant flow of sales falling through and price drops now but the asking price madness continues.

There is little point in viewing a house now unless you are a debt Junky of able to off load your "pile of s**ts" to some other idiot.

I often ponder what the BoE "agents" said when visiting local estate agents just before this "boom" took off:

http://www.housepricecrash.co.uk/forum/index.php?/topic/194058-boe-agents-visiting-estate-agents/

http://www.northamptonchron.co.uk/news/business/property-news/market-thoughts-simon-bond-welcome-uplift-as-confidence-keeps-growing-1-5572047

"" I had an agent from the Bank of England visit me last week to get a local steer as to how the housing market was moving forward and also to discuss pressing issues for companies..." "

I personally think it might have been something along the lines off...."push prices up 20/30% in the run up to the election and the BoE will support the banks who will support these prices".

Is that scenario even possible in a democratic country ? I sincerely hope not.

I wont ever vote for the free Market Tories again.

Free market my ***e

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Estate agents have pushed asking prices round Northampton to 20-30% above 2007 looney prices.

Northampton's a load of cobblers, innit? You need to put the boot on the other foot.

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Bait and switch.

(1) "Homebuyers who took 125 per cent mortgages with failed bank Northern Rock are today being forced by the Government to pay interest as high as nearly 13 per cent."

(2) "...it was entitled to hike the interest rate on the personal loan component — and her interest rate would jump from 4.79 per cent to 12.79 per cent."

Yes... so she's not paying "nearly 13 percent" on the mortgage, only the "personal loan".

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Bait and switch.

(1) "Homebuyers who took 125 per cent mortgages with failed bank Northern Rock are today being forced by the Government to pay interest as high as nearly 13 per cent."

(2) "...it was entitled to hike the interest rate on the personal loan component and her interest rate would jump from 4.79 per cent to 12.79 per cent."

Yes... so she's not paying "nearly 13 percent" on the mortgage, only the "personal loan".

Aye, not the same at all. Not only that I know how lenient NR were with loan repayments having lived in a house where the previous Tennant took an NR loan then buggered off. Never made a single payment and was never chased.

On a sidenote at a guess she was the 2007 vintage hairdresser swanning around in a brand new merc and buying all her furniture from habitat whilst looking down her nose at renters. I hope she lost everything.

Edited by frozen_out

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Living near Barrow house prices wont rise back to that level for some time as there isn't much work apart from hairdressers!

Strange that Copeland up the road has one of the highest median full time wages in the UK then.

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Its all in the small print. Dippy hairdressers though ...what can you do with them?

Northern Rock made a bit of a mess with their paper work and legalities on the 125 together loans. Pre 2006 loans over 25K were not subject to the regulations set by the Consumer Credt Act. NR forgot this and their paperwork shows loans pre 2006 as regulated loans where they were not. In addition to this mistake they also forgot on several thousand agreements, over a few years to mention the interest payments on the loans at all. This meant NR were not entitled to enforce those interest payments. In 2012 NR had fork out 270 million to compensate customers whose loans were under 25K and therefore regulated under CCA. The customers who have loans over 25K were not compensated despite having paper work from NR stating that their loans were regulated under CCA, even though this was NR’s error.

NR was a disaster from word go. There are forums out there full of people trying to figure out what their particular NR contracts mean. Must have been quite a few solicitors out there who fell short of doing their jobs properly, seeing as how several NR contracts did not have the correct information on them.

No idea as the particular circumstances in the article, but I wouldn’t automatically assume that the customers are at fault here, they may well be, however NR contracts are known to be consistently missing or lacking important details. Customers not paying or being financially naive is one thing, a mortgage lender whose contracts are quite so messy is quite another.

Miss selling it is…

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Northern Rock made a bit of a mess with their paper work and legalities on the 125 together loans. Pre 2006 loans over 25K were not subject to the regulations set by the Consumer Credt Act. NR forgot this and their paperwork shows loans pre 2006 as regulated loans where they were not. In addition to this mistake they also forgot on several thousand agreements, over a few years to mention the interest payments on the loans at all. This meant NR were not entitled to enforce those interest payments. In 2012 NR had fork out 270 million to compensate customers whose loans were under 25K and therefore regulated under CCA. The customers who have loans over 25K were not compensated despite having paper work from NR stating that their loans were regulated under CCA, even though this was NRs error.

NR was a disaster from word go. There are forums out there full of people trying to figure out what their particular NR contracts mean. Must have been quite a few solicitors out there who fell short of doing their jobs properly, seeing as how several NR contracts did not have the correct information on them.

No idea as the particular circumstances in the article, but I wouldnt automatically assume that the customers are at fault here, they may well be, however NR contracts are known to be consistently missing or lacking important details. Customers not paying or being financially naive is one thing, a mortgage lender whose contracts are quite so messy is quite another.

Miss selling it is

What is Adam Applegarth up to these days?

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:) There's a blast from the past. Infamous creature. His career in Apollo doesn't seem to have been particularly successful. .

http://realdeals.eu.com/article/45027

I wouldn't hire him to work in a chippy...

Apparently he's got a 5mil pension pot so doesn't need to work again anyway

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There are not many if any who read all of the small print in agreements, my post was tongue in cheek. I got stung once with Paypal and was referred to their user agreement which I had signed up to, albeit online ( a tick box). It was something like 300,00 words long with subtexts and sub paragraphs etc etc. Small print is there to protect the seller of products and no one else. It does help to read the salient points but that ends up being subjective as to what is and isn`t important.

Many times when people sign up for a mortgage or loan they are focussing on their wants, rather than the way they go about obtaining them.

Many on HPC (me included) take the micky out of people for not being financially aware but that can take years to learn. Everyone cannot be born number crunchers and many are just not cynical enough.

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