NRAM variable rate goes up but never comes down!

by Readers Question

11:18 AM, 25th October 2018
About 3 weeks ago

NRAM variable rate goes up but never comes down!

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NRAM variable rate goes up but never comes down!

I am currently stuck with NRAM with 2 buy to lets, my problem is that since the crash they haven’t dropped their interest rate, but over the last few months as the base rate has increased they have moved up accordingly.

By that measure my rate could end up at 10% while the base is say only 0.75%, if the base moves up and down because of Brexit or another financial crash and NRAM only move up. I have put complaint in to the FOS they have informed me that it has gone to a specialist team and could take up to 6 months, just wondering has anybody else complained to the FOS

Many thanks

Paul



Comments

Dylan Morris

10:19 AM, 26th October 2018
About 3 weeks ago

Similar with West Brom BS standard variable rate for residential borrowers. Remained at 3.99% when Bank of England reduced base rate by 0.25% to 0.25% in August 2016. But West Brom rate mirrored B of E 0.25% increases in November 2017 and August 2018. So now at 4.49% which is pretty outrageous when B of E rate is only 0.75%.

Laura Delow

12:02 PM, 26th October 2018
About 3 weeks ago

A very good point. I look forward to hearing the outcome. However meanwhile, the fact these 2 BTL mortgages are still with NRAM indicates they're long standing mortgages set up pre-credit crunch & wondered if the reason you've never remortgaged away from NRAM is because you are a mortgage prisoner due to portfolio landlord new criteria, and/or tighter rental calculations in general, and/or loan to value or because you want to retain the NRAM flexible mortgage i.e. paying down & redrawing?
If a mortgage prisoner, I know of e.g. one lender whose rental calculations allows many BTL landlords to escape their current lender e.g. up to 80% loan to value; £1000 pm rent for a high rate tax payer = £215,994 or for a lower rate tax payer = £250,533 as long as you take a 5 year Fixed rate of 3.48% if 75% LTV or 3.78% if 80% LTV with no lender's Product or Arrangement Fee to pay, plus free valuation & legals. Just a thought.

Old Mrs Landlord

16:07 PM, 26th October 2018
About 3 weeks ago

Another reason Paul could be a mortgage prisoner is age. If he is older and/or looking to keep mortgaged into old age he may not find an alternative lender. We had a NR mortgage taken out in 2006 which would have matured in my 94th year. Now that most UKAR mortgages have been sold on to companies based abroad I doubt there is much chance of rates coming down.

Paul Anderton

16:34 PM, 26th October 2018
About 3 weeks ago

The main reason i am locked in is because they were bought pre credit crunch at peak value and have only just regained there value, also Northern Rock gave very favourable L.T.V deals so i haven't yet got enough equity to move .


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