No Holidays or Day Trips for Cash-Strapped Scots as Mortgage Rates Set to Rise, Says Sequestration Scotland

    GLASGOW, SCOTLAND, April 25, 2012 /24-7PressRelease/ -- A recent report from Scottish Widows revealed that for 47% of Scots a holiday is an unaffordable luxury, while a day out with children is an impossibility for 45%, but any homeowners in the survey that are on variable rate deals with Halifax or RBS could expect to have even less money after the announcement of a rate hike on May 1st.

While millions of Scots struggle to make ends meet, two of the biggest mortgage providers have plunged a million of their customers into uncertainty over their financial futures. RBS will raise their rates 0.25% to 4% while Halifax will increase its rates from 3.5% to 3.99%, adding a minimum of GBP300 to a GBP100,000 mortgage.

The move has been condemned by debt charities, who have warned struggling Scots will be driven further down into debt, but RBS and Halifax are claiming that they have no choice as the costs of funding mortgages have increased.

Around a million customers will be affected by the rate change, with many cash-strapped Scots having to come to terms with the little stability they had from the mortgage rates amid the soaring cost of living, rampant unemployment and frozen wages will now disappear. A spike in applications for Sequestration is expected.

SNP Treasury spokesman Stewart Hosie MP said: "With the base rate still incredibly low and the Bank of England engaged in hundreds of billions of pounds worth of quantitative easing, it seems absolutely ludicrous that families who are struggling with wage freezes should see their mortgages go up in these circumstances. I'm yet to see an economic justification from any bank as to why they are doing this. I think this is the wrong call at the wrong time.

"We have had a period of very high inflation, we've seen fuel prices in particular go through the roof, we have seen wage freezes and wage restraint over the last three or four years now and people are now expected to find more money from less to pay for mortgages at a time when the base rate remains unchanged. That will clearly have an awful impact on household budgets."

While RBS and Halifax are still struggling to make a profit and have stressed the rate rise is to cover their costs, other banks and building societies are having a much better time in the marketplace, and there is a real concern that they will follow suit just to make extra money.

A spokesperson for Scottish Insolvency Company, Sequestration Scotland, said: "This couldn't have come at a worse time. It's like heaping misery upon misery onto the Scottish people. A few years ago the taxpayer paid for RBS and Halifax to stay in business by bailing them out, and this latest move will leave a bad taste in everyone's mouth. And it could get even worse if other banks and building societies decide to follow suit.

"For a family not to be able to escape and relax together, not even for a day, due to the pressure it would put on their finances is heartbreaking. How these extra mortgage payments will be met by these hard-up families isn't clear, but given the popularity of short term high interest loans, the pay day loans companies will smell blood in the water and come circling."

Website: http://www.sequestration.net

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