“I’m trying to live on £500 a month with a 13 year old to support”, a mortgage prisoner has told FTAdviser.
Emma Donaghy explained that she took out her first mortgage with her ex-partner with Northern Rock in 2007 just before the bank failed.
Following this, the mortgage was sold several times until it was bought by Heliodor in 2019.
Since her mortgage was bought by Heliodor, Donaghy reported almost monthly increases in interest rates.
She said her mortgage rate has increased from 5.38 per cent in September 2022 to 8.73 per cent as of October this year.
This has meant her mortgage has reached £663 a month while her monthly income only amounted to £1,500.
But a spokesperson for Heliodor said: "Since December 2021 the Heliodor SVR has risen from 4.39 per cent to 8.74 per cent.
“This is 0.80 per cent less than the base rate, which has risen from 0.10 per cent to 5.25 per cent over the same period.
“Our increase mirrors that of many other lenders within the UK mortgage market, and we remain confident that our SVR is not an outlier.”
Difficulties
This has resulted in Donaghy having to think about what she can buy on a monthly basis as she explained “I’m behind on credit card bills because sometimes I've had to get groceries with my credit cards, I’m behind on council tax.
“It’s just horrific, absolutely horrific.”
This is of particular concern for her in the immediate future as she stated: “There’s Christmas coming and what am I supposed to say to my son? ‘You’re not getting much for Christmas because I can’t afford it’?”
Additionally, while she clarified that she was not in arrears at the time of the interview, she admitted she was considering missing January’s mortgage payment to provide a Christmas for her son.
She also spoke about the sacrifices she has made to keep her head above water: “When my son needs something like new school shoes I will try to get them and think about what I can do without.”
She also stated: “In the night time I try not to put my heating on”.
Donaghy also pointed out that, for her, this was not a matter of job or hours as “when you work for the NHS you can’t just go and do another job because there are really bad shift patterns”
She added that, while she has asked for extra shifts, there are none currently available.
Payment cost
Donaghy also explained that her initial mortgage with Northern Rock was for £94,000 and that she has been paying this mortgage for 16 years with another 16 still left to go.
She estimates that, by the time she has finished paying off her mortgage, it will have cost her over a quarter of a million pounds.
Donaghy said that, even though her ex’s name is on the mortgage, he does not contribute to the payments and, though she has tried to have his name taken off on previous occasions, none have been successful.
She also stated that when she has reached out to Heliodor in the past but said that “they just don’t care”.
“They’re quite rude on the phone and they don’t offer you any help.”
In response to this, a spokesperson for Heliodor stated: “We haven’t received any complaints from Ms Donaghy about removing her ex-partner from the agreement or about our service in general.
“We have however listened back over the latest call from the customer in October 2021 and believe that, although the call was professionally conducted, we could have in hindsight been clearer about her options, and we’re sorry about that.
“We’re contacting Ms Donaghy to discuss her options with her as soon as possible and provide as much support as we can.”
The spokesperson added that Heliodor was in regular contact with the government and the regulator to ensure it is treating customers fairly and provides tailored support for those with complex needs.
“We’re also taking part in regular industry-wide discussions and are helping to take a lead role in a project to agree an improved customer contact journey for mortgage prisoners,” they added.
Her mortgage has also affected her credit rating as she stated that her rating was “absolutely fantastic until January this year” and since then it has been “absolutely shot” as she has to prioritise what little money she has.
The bigger issue
Donaghy also pointed out that her situation is in no way unique as she stated: “There’s thousands and thousands of people like me and it just feels like nobody’s listening to us.
“It just seems to be that everyone’s washed their hands of mortgage prisoners and I just want the government to look and see.
Reiterating this call for action, she said: “We need somebody to listen to our stories.”
tom.dunstan@ft.com
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