Single mum forced to pay £91K extra on mortgage after getting trapped on high rate
A single mum-of-four has been forced to pay over £91,000 extra on her mortgage due to being trapped on high rates. Rebecca Wendel, a 46 year old self-employed hairdresser says she is a ‘mortgage prisoner’ paying a whopping 9.79% interest.
She took out her loan before the financial crisis with Northern Rock, a lender that later failed. Her loan was then sold to a firm that isn’t a mortgage lender and can’t offer her a cheaper deal.
Now, she’s often turned down for cheaper mortgages elsewhere because she doesn’t meet the strict borrowing criteria set in 2014. Rebecca’s monthly payments have shot up to £2,150, a big jump from £1,049 in August 2022 when she was paying 6.75%.
READ MORE – Princess Kate shares new photo with George, Charlotte and Louis
READ MORE –
In contrast, the average two-year fixed mortgage rate today is 5.78%, while the average five-year fix is 5.34%, says Moneyfacts. There are over 200,000 mortgage prisoners in the UK, and it’s estimated that the Government has made more than £2.4 billion from selling these loans.
Harcus Parker, a law firm representing over 10,000 mortgage prisoners, has secured a trial at the High Court against TSB to determine if the bank financially exploited its Whistletree mortgage prisoner customers, reports the Mirror.
A law company thinks that if they win a big court case, it could help lots of people who are stuck with bad mortgages. Ms Wendel is not a customer of TSB bank, but she’s really interested in what will happen because it might help her and others like her.
Ms Wendel shared her feelings: “It makes me feel angry that I’ve paid so much extra money and makes me all the more adamant that this needs to be sorted out. If I can get the money back it would go straight off my mortgage, and enable me to access a normal mortgage. I’d be about £1,000 better off each month, and that’s life changing for somebody like me.”
She also said: “The money would also enable me to stay where I am. At the moment I’m still 50/50 about putting the house up for sale. Part of me feels that’s giving up. But equally, I can’t afford to keep doing what I’m doing. My kids haven’t had a childhood – they haven’t been able to do things with their mother that they would normally do.”
Last year, someone told Ms Wendel she couldn’t have a cheaper mortgage because she “couldn’t afford it”. They said she should stay with the one that costs more.
Ms Wendel and her ex-husband got a big mortgage from Northern Rock in 2007. She still has to pay all of it back after 17 years.
She says they first had a different kind of mortgage, but a broker said they should change to a different type just for a little while to pay for building work on their house.
Nine months after they got their loan, Northern Rock failed and their loan went to Heliodor Mortgages. Since then, Ms Wendel can’t find a better mortgage deal.
Damon Parker, who is the top partner at Harcus Parker, said: “Tens of thousands of mortgage prisoners are still stuck on these high interest rates through no fault of their own. Ms Wendel’s case is typical of the financial pressure and misery caused to tens of thousands of mortgage prisoners.”
“It is our contention that these people have been terribly financially exploited and deserve recompense. We are very hopeful that the trial in July, this year, will finally determine that these people are victims of an appalling financial injustice and should be allowed to recover the excess money that they have paid. Our group litigation represents both current and former mortgage prisoners.”
A TSB spokesperson shared: “Whistletree customers are not mortgage prisoners. Since we took over the management of these mortgages, over two-thirds of Whistletree customers have either moved to a new mortgage or closed their mortgage with Whistletree. We remind customers they can switch at least annually, and this is displayed prominently on the Whistletree website.”
Harcus Parker has told The Mirror that it talked to Whistletree mortgage customers who can’t switch because they don’t pass the affordability checks with new lenders.
Source link
