The Free Mortgage
Don't hate Ben and Nicola Cameron because their mortgage went from $2200 to a penny overnight.
It's estimated that the Camerons are one of about 10,000 homeowners in the U.K. coasting on a free home loan.
The British always seem to have it better, don't they? Ben and Nicola Cameron bought their two-bedroom Victorian London home in 2007 for about $580,000 with an adjustable-rate mortgage locked to the interest rate for two years (then about 6.5). Now that the Bank of England -- in a recessionary move -- has slashed the interest rate to a rock-bottom 0.5 percent (on the heels of dropping it to 1 percent in February), they're paying nothing. Well, almost nothing. Their lender has to charge them one pence because the bank's software simply isn't set up to handle zero-payment paperwork.
One U.K. mortgage broker estimates that about 10,000 homeowners are in this particular sweet spot, according to a Daily Mail article, having seen their payments plummet to the point where they're enjoying a free home loan. For now. The Camerons' free ride comes to a halt at the end of this year, but in the meantime, they're socking away what they'd be paying on their mortgage and scouring for a good fixed-rate deal.
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Posted Wednesday, Jul 29, 2009 - 8:48 AM CST
