Tuesday, June 5, 2007

Monthly repayments will increase by £185 or 33 per cent from £556 to £741

178,800 borrowers, who took out mortgages in 2005, will face mortgage repayment increases of £185 a month

According to Mortgage Advice Bureau (MAB) 178,800 people, who took out mortgages in 2005, will face mortgage repayment increases of £185 a month as they come to the end of their fixed rate deals and move onto their lenders SVR rate this month - with a further increase should the base rate rise again this week...

Posted by converted lurker @ 11:50 AM (400 views)
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12 thoughts on “Monthly repayments will increase by £185 or 33 per cent from £556 to £741

  • Of these borrowers most will remortgage and will pay nothing like a 33% increase. You can still get fixes at below the LIBOR rate! and the SVR is often 7.5 or 8% Basically I doubt it will make much difference.

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  • OK Maddison, we are with you… raising interest rates will not make a difference since banks still offer intro rates under LIBOR. Yes of course banks are not in the business of making money and consumers will win in the end, as always. In an environment of rising interest rates (GLOBALLY) all asset prices will go down except one: guess which? UK property

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  • converted lurker says:

    Eh? Oh, I get it now, lenders will allow you to reduce your payments, stretch the term and won’t charge you for the privilege…you’ll be first in the Q obviously…

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  • Yes, that’s the new banking paradigm – I lend you money to buy an asset, if the asset value goes up you take the profits and if you suddenly find you can’t afford to repay it for whatever reason, the bank takes the risk.

    All of the top lenders are seeking charitable status these days, don’t ya know.

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  • This is exactly the same sort of nonsense mentality that has occured in the US subprime market. Silly me, I forgot 1+1=3.

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  • “178,800 people, who took out mortgages in 2005, will face mortgage repayment increases of £185 a month as they come to the end of their fixed rate deals and move onto their lenders SVR rate this month” .

    So that means the following month a similar amout of people will also have to pay more due to their fixed deals ending ?

    Bummer

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  • Ha ha you lot !! Talk about irony!

    What would I do without the comments on this site?

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  • Steady on guys – Maddison does have a bit of a point; not all of these people will fail to remortgage once their fix is up, and yet the figures quoted in the article presume that every one of them will just start paying the SVR, so the article isn’t being entirely realistic = spin (but in favour of the crash this time).

    On the other hand, Maddison, the lowest fixed deals now are higher than they were then, and the better the rate the higher the fee charged to remortgage (up to £1500 odd – not an insignificant sum to stump up, and adds a fair bit to your repayments if you add it in to the mortgage). So ALL of these people will be forking out more than they were, even if it isn’t an extra 33% in every case, which IS likely to make a difference. Especially when you consider that (a) some of these dummies will just pay the SVR, and (b) some of these mortgages may still be within their repayment penalty period.

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  • You brighten my day!

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  • Particularly Soviet and Paul…

    I agree, of course the financial institutions are charitable organisations aren’t they!?

    Mind you they will keep issuing funny money until the BOE get the handcuffs (or cane (thats the S&M in me) or whatever) out?

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  • Are loans of £100k the average,or are they generally much more for people who took out a mortgage in 2005?

    They may remortgage,but will there be an ERC for them?

    On a £200k loan,that could be substantial,and could lengthen term if added to the original loan sum.

    Does anyone really have a concept of the fragility of the market…probably not.Oh well.
    I suppose we will have to pick up the pieces.

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  • dugmug just said what I had planned to.

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