Credit crunch one year on

Canarius's picture

I must admit I'm really feeling the pain of the credit crunch one year on. When I took out a mortgage with my friend back in June 2006 it was a 4.9% two-year fixed rate with the Bank of Scotland. At £250 a month each it was easy to make the repayments.

Then the credit crunch took hold last August - fixed-rates start to shoot up, my friend who I bought my home with moves out (leaving me responsible for the mortgage), and despite most analysts predicting it would last for six months tops - it looks as if it's here to stay.

As most lenders didn't want to touch me with a bargepole I was forced to revert onto the Bank of Scotland's standard variable rate last month - my mortgage shot up from £500 to £648! And as the bank can chop and change its standard variable rate at any point my bank balance is on a knife-edge.

 Should the Bank of England choose to increase interest rates on Thursday, which I think they will do due to inflation spiralling out of control I'll be stung even more this month. So if that's not the credit crunch right there, I don't know what is.

Oh well, I guess I'm just going to have to continue to tighten my belt to make ends meet. I only hope some light is at the end of the tunnel soon - or else I may have to wave goodbye to my home.


Your Comments

What did you buy? Is there no chance of renting out one of your spare rooms? Im guessing your friend must have vacated one.

I bought a two bedroom terrace house for £140,000 - we were lucky to get it at the price to be honest. I'm currently renting out my friends' room for £300 a month all bills included to one of my workmates, but I must admit it's tough. I used to have some money to play with each month, but alas not any more!

Thats still a very good price to get it for. I can imagine its tough though. I know what its like. We bought our first place in 2005 that was a 2 bed flat and took up all our income at the time, then when things got better we bought our house at the beginning of this year. I've always thought its better to stretch yourself to have extra bedrooms in case of disaster, as you are finding out your mates income on the spare room is a life saver.

Related articles