‘I’ve been suicidal and cannot see a way forward’: a mortgage prisoner's story

“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. 

I don’t know a way forward, and I am scared.'Joanne'

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.”

Action

While the issue has been discussed in the House of Commons, Joanne said the discussion has not shown the extent of the impact.

“I live in a constant heightened state of anxiety that makes me feel ill and is detrimental to my children”, she said.

She also pointed out this was just her story and there are many others who were suffering in similar ways.

Joanne said the ideal outcome for her and her family would be an allowance to transfer to a repayment mortgage and to be able to use any compensation on the high interest charges to reduce what they owe.

This would mean they would have equity in their home and the monthly payments would be more representative of what Joanne should be paying while reducing the mortgage.

“I would even extend the mortgage term if it was possible,” she added.

Heliodor's response

In response, a spokesperson from Heliodor said: “We recognise that this is a very difficult time for Joanne and also that she is a vulnerable customer.

“We have agreed several mortgage concessions with her in 2022 and 2023. The most recent concession took place between October and December last year.”

The spokesperson added that mortgage property on Joanne’s home has been in arrears continuously since 2010, with the current balance standing at £201,135.57 and that the mortgage term has a further seven years and seven months.

They pointed out that, in 2008, Joanne and her husband agreed for their account to be switched to interest only and that a copy of that agreement was provided to her in response to a complaint raised this month.

In Heliodor's response in 2008, the company reportedly signposted the details of independent organisations offering free support and impartial information for those experiencing financial problems.

“[Joanne] contacted us at the start of this year to confirm that she was still in receipt of benefits, and, as a result, that she cannot afford her mortgage,” the spokesperson stated.

“We have received emails from [Joanne] but at present she has asked us not to make contact with her over the phone. We’d be happy to have a more in-depth conversation with her to properly discuss her options.”

tom.dunstan@ft.com

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