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Apologies in advance if this is the wrong part of the forum to place this. Seemed most appropriate place.


I took out a 5 year fixed rate mortgage in Feb 2007 with NR. It was a 5.69% 'Help with costs + fee remortgage fast track'. It reverts to an SVR in Feb. I owe approx £216,000. The property is in Belfast and although once 'worth £280,000', it would now struggle to sell for £160,000. Basically i am about £56,000 in negative equity, with further falls on the way, with no hope of remortgaging.


At the moment i am paying around £1,050 per month. When i got the key facts document originally, i completely misunderstood it. At the time the BoE base rate was 5.25%. The key facts form said that after the 5 year term the mortgage would revert to a SVR: "a variable rate, currently 7.34% for 2 years. Thereafter, a variable rate, currently 7.34%, with a discount of 0.25% thereafter, giv ing a current rate payable of 7.09%"


Stupidly i assumed that if the base rate was 5.25% at the time, then the mortgage was essentially reverting to base rate + 2.09%. I know many people with other mortgages, stuck on standard variable rates. They all seem to be paying base rate + 1.75% or thereabouts. Have i misunderstood something? why is the NR SVR so high?


I recently rang up to enquire as none of their documents told me how they calculated the SVR, or how or why that would go up. I had assumed it was pegged to a certain % above base rate. The guy i spoke to said the SVR is 4.79%. When i pushed him he spoke to a manager and confirmed that the SVR is 4.29% above base rate.


Basically, in Feb next year, i will temporarily go down to £862.20 pcm. I had assumed it would fall much lower than that.


In a few years time, the base rate will go up. The Northern Rock guy confirmed to me that it would go up by Base Rate + 4.79%. Surely that can't be right? Do they use another way of determining their SVR? at 5% base rate i'll be paying 9.29%, nearly £1700pcm. Long way off but i'll be repossessed for sure... no hope of me every remortgaging in the next decade...

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