Trigger warning: This article, part of FT Adviser's series of case studies on mortgage prisoners, touches on topics such as suicidal thoughts and ideation.
“I’ve been suicidal and I cannot see a way forward”, one mortgage prisoner has told FT Adviser after her mortgage payments increased to more than twice what she could afford.
In 2006, Joanne bought a three-bedroom family home in Billingham for £186,000 with the help of a £173,000 repayment mortgage with Northern Rock.
She accepted an offer of further borrowing, so added £10,000 to the loan the following year while the criteria was more relaxed for home improvements.
At this time, her mortgage rate was fixed at 4.15 per cent.
But in 2008, Joanne’s husband was made unemployed and the family could not access any financial support for six months, even though they had insurance.
They then entered into a period of reduced payments towards the mortgage but spoke to a local financial adviser who wrote to Northern Rock and agreed a six-month interest-free period.
They thought this was all sorted - but within that six months, Northern Rock was nationalised and, as a result, Joanne’s loan stayed interest-only and she was stuck with the lender
She was unable to remortgage, due to the period of reduced payments and her husband’s unemployment.
In 2019, the mortgage was sold onto Heliodor mortgages and, since then, the monthly repayment amount has been “continuously increasing”.
Currently, Joanne is on 8.75 per cent on a £192,000 loan, and they now owe more than they borrowed due to reduced or missed payments.
This equates to £1,335 a month - £500 more than she is able to budget for.
Impact
Joanne revealed how her mortgage had impacted her life, saying the stress had cost her and her husband their marriage as the two have since divorced.
She also said there is a threat to the roof over her head.
“Although our home is our only safe space, especially for our children, I am going to have to let Heliodor repossess our family home.”
Joanne explained this was because she was not able to meet the full monthly payments and Heliodor would not accept anything less as “they cannot see my situation changing in the near future”.
She cannot remortgage or take out a different mortgage for another property and is not in a position to privately rent due to her credit history.
“I don’t know a way forward, and I am scared," she added.
This impact was extended to her children as she stated that she and her boys, who are currently in their teens, regularly miss meals and cannot afford to make healthy choices.
“We rarely go anywhere. I can’t afford the fees for their football training. Once again today I had to say no to a school trip - this time to Germany - even though all his friends are going.”
