What to do, what do do indeed.
I’ve just gotten a phone call from our mortgage broker. It would seem that the RBS is willing to give us a mortgage. Thiis is good news. The bad news though is that the interest rate on said mortgage is 7.25% which, considering that the base rate of the bank of England is currently 1.0%, is nothing less than highway robbery.
Thing is though, the banks have us by the short and curlies. A lot of lenders are shying away from 90% mortgages.. Many are asking for at least a 15% deposit now. For us, this would mean finding another 8000 pounds out of thin air. Very few lenders will even consider me because I’m an evil foreigner. Combining these two facts means that the RBS can pretty much dictate any terms they want – they have their bonuses to earn, don’t they? If we want the house – which we do – we are facing a big decision. I knew that we’d get a bum deal for our first mortgage. I didn’t expect it to be this bad though.
We can afford the repayments. It’s the principle of the thing. But what is the price of a principle? In our case, it’s an extra 100 pounds a month for 5 years and a rough mental calculation puts this at an extra 6000 pounds in interest that we throw out the window.
So, decisions. And the realization that banks are teh evil and teh maj0r suckz.