A single mum says her children “haven’t had a childhood” because she’s been trapped forking out sky-high mortgage payments.
Self-employed hairdresser Rebecca Wendel, 46, has been forced to pay an extra £91,000 to keep a roof over her family’s heads.
The interest rate on her mortgage shot up after lenders including Northern Rock went bust in the 2008 financial crash.
Mortgages including Rebecca’s were eventually sold to TSB’s Whistletree mortgage brand in 2016.
The company allegedly charged often higher than market average interest rates.
Rebecca, from Leeds, says her monthly payments are now £2,150, up from £1,049 in August 2022 when she was paying 6.75%. In comparison, the average two-year fixed mortgage rate today is 5.78%, while the average five-year fix is 5.34%, according to Moneyfacts.
There are more than 200,000 “mortgage prisoners” in the UK and money expert Martin Lewis estimates the Government has made more than £2.4billion from selling these loans.
Law firm Harcus Parker, which represents more than 10,000 mortgage prisoners, has secured a trial at the High Court against TSB to determine whether the bank financially exploited its Whistletree mortgage prisoner customers.
The law firm, which is running a no win, no fee group litigation claim, believes that if the trial is successful, it could set a precedent for all mortgage prisoners. Ms Wendel is not a TSB customer but will be watching the outcome carefully to see what it could potentially mean for other mortgage prisoners.
Join the Daily Record’s WhatsApp community here and get the latest news sent straight to your messages.
Rebecca told The Mirror: “It makes me feel angry that I’ve paid so much extra money and makes me all the more adamant that this needs to be sorted out. If I can get the money back it would go straight off my mortgage, and enable me to access a normal mortgage. I’d be about £1,000 better off each month, and that’s life changing for somebody like me.
“The money would also enable me to stay where I am. At the moment I’m still 50/50 about putting the house up for sale. Part of me feels that’s giving up. But equally, I can’t afford to keep doing what I’m doing. My kids haven’t had a childhood – they haven’t been able to do things with their mother that they would normally do.”
Last year, she was told she was not eligible for a mortgage that would see her pay 4% as she “couldn’t afford it” and instead was told to stay on her more expensive scheme.
Along with her now ex-husband, she took out a mortgage of £284,000 with Northern Rock in 2007. She still owes the full amount 17 years later. She says they were previously on a repayment mortgage in 2007, but were talked by a broker into switching to an interest-only deal on a temporary basis to help pay for an extension.
But nine months into their deal, Northern Rock collapsed and their loan was sold to Heliodor Mortgages. Since then, she has been unable to switch to a more favourable mortgage deal.
Damon Parker, senior partner at Harcus Parker, said: “Tens of thousands of mortgage prisoners are still stuck on these high interest rates through no fault of their own. Ms Wendel’s case is typical of the financial pressure and misery caused to tens of thousands of mortgage prisoners.
“It is our contention that these people have been terribly financially exploited and deserve recompense. We are very hopeful that the trial in July, this year, will finally determine that these people are victims of an appalling financial injustice and should be allowed to recover the excess money that they have paid. Our group litigation represents both current and former mortgage prisoners.”
A TSB spokesperson said: “Whistletree customers are not mortgage prisoners. Since we took over the management of these mortgages, over two-thirds of Whistletree customers have either moved to a new mortgage or closed their mortgage with Whistletree. We remind customers they can switch at least annually, and this is displayed prominently on the Whistletree website.”
Don’t miss the latest news from around Scotland and beyond – Sign up to our daily newsletter here.
