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    Interest Rate Change FAQs

    Please read below “Your Questions Answered” for more information about the interest rate change on your second charge mortgage might impact you.

    Why has the interest rate on my second charge mortgage changed?

    Like many people, you probably share the worry of what impact this unprecedented situation of Covid-19 will have on your personal finances. At Nemo, we understand that and we want to ensure that we help our customers navigate these difficult times, as much as we possibly can. That’s why we have reviewed the interest rates we charge on our second charge mortgages and although we don’t need to do this under our terms and conditions, we are decreasing your interest rate.

    How long will this new interest rate last?

    This new interest rate will last until the end of your agreement, unless we change it for any reasons stated in our terms and conditions. If we do change it, we’ll write to you again 10 days before the interest rate changes.

    You have included a Direct Debit form with my letter but I already have a direct debit set up. May I ignore the form?

    If you already have a direct debt set up, you can simply ignore the enclosed direct debit form.

    Why has my contractual monthly payment increased even though my interest rate has decreased?

    At some point during your mortgage, you may have fallen behind with payments, resulting in your account being in arrears. When a mortgage is in arrears, additional interest is incurred on the balance: this is because the balance is higher than it would have been had payments been made in full and on time. This additional interest is added to the balance. Even if you have cleared your arrears, if you did not clear the additional interest, your balance will be higher than expected.

    In the event of a rate change, your contractual monthly payment is calculated to ensure that the outstanding balance is repaid over the remaining term of the mortgage, subject to all future payments being made in full and on time. When the balance is higher than it should be, the result is that your contractual monthly payment can increase. However, the overall cost of your second charge mortgage has decreased in the long term which is why the interest rate reduction is still beneficial to you. If you think you may have difficulties in making your contractual monthly payments please contact us on
    0800 612 9982 so we can talk through what we might be able to do to help.

    We also suggest that if you can’t afford to pay your full monthly payment amount, you may wish to contact The StepChange Debt charity on 0800 138 1111 or visit www.stepchange.org

    Alternatively, the Money Advice Service have a useful Money Navigator Tool to support people to manage their finances www.moneyadviceservice.org.uk/en/tools/money-navigator-tool, both of which can provide you with free and independent financial advice.

    I'm on a mortgage holiday, so why have you written to me?

    Although you're currently on a mortgage payment break, as part of our terms and conditions, we need to let you know when the interest rate on your account changes and the impact this change has on your monthly repayments. As you're on a break, the monthly repayments change shown overleaf doesn't affect you right now. Don't worry, we'll write to you again 10 days before the end of your payment break to confirm your new monthly repayment.

    I have a formal arrangement to pay an agreed amount, so why have you written to me?

    Although you currently have an arrangement to pay an agreed monthly amount, as part of our terms and conditions, we need to let you know when the interest rate on your account changes. As you have this formal agreement, the monthly repayments change shown overleaf does not affect you and your formal payment arrangement will continue.

    As you have a formal arrangement with us to clear arrears on your account, it is important that you amend your standing order or call us to change your deferred card payments. If you do not so do, your arrears may worsen which could impact your credit rating.

    If you currently pay by direct debit you don’t need to do anything as the new payment will be collected as normal each month.