One mortgage prisoner tells FT Adviser about how they may only be able to survive for one more month after their mortgage payments doubled and savings pot dwindled.
Anne-Marie, who is currently on an interest-only mortgage, explained interest rates on her mortgage have exploded over the past year, rising from 4.5 per cent to 8.94 per cent.
As a result of this increase, her monthly mortgage costs on her house, which is worth around £750,000, have increased from £950 to £1,998 in just a year.
This has had a huge impact on Anne-Marie and her husband who have a family of six children and a mother who is suffering with dementia.
The impact of this “extortionate” rise in her mortgage payments was made even worse for Anne-Marie as her son has received treatment for leukemia for the past four years, which has involved relocating to four different hospitals.
As a result of this constant need to relocate, Anne-Marie and her husband are unable to have any permanent employment, requiring flexibility to ensure their son gets the treatment he needs.
To continue to pay the bills, they had to rely on the savings they had amassed over the years but warned this will not last much longer.
“We’ve just used any savings that we have and we’re now coming to the end of the savings that we’ve got.
“Friends and family have been really good and tried to do charity raising events to try and help us so we can keep our home while my son is having treatment, but it's really hard.”
Background
Providing some background on her situation, Ann-Marie told FT Adviser her current home had been owned by her parents but, after her father passed away when she was young, her mum struggled to keep up with payments.
To help with this, Anne-Marie and her partner bought the house in 2000, worth £425,000 after it had gone through a series of renovations.
In 2006, Anne-Marie transferred her mortgage to Northern Rock, and cited the “amazing rates” as a motivating factor but said she wishes she had never done so.
Soon after the transfer, the market experienced the crash of 2008 and, as a result, the mortgage eligibility criteria changed and “we’ve pretty much been stuck ever since”.
“We have to afford extortionate rates these non lenders charge without any affordability checks, but we can't move our mortgage due to affordability checks, yet we are not in arrears,” she said. “It doesn't make any sense at all”.
After Northern Rock failed, Anne-Marie's mortgage was sold off to several different buyers before ultimately being bought by Heliodor, who currently owns it.
A spokesperson for Heliodor said: “We work hard to support customers who are experiencing financial and other difficulties and we’ve actively engaged with Ms Gillespie about her options during this very difficult time for her family.
