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A firm that manages thousands of mortgages on behalf of vulture funds has told some of its customers they are to finally get an interest rate cut. It is the first time Mars Capital reduced its rates since the European Central Bank (ECB) started cutting rates last summer. There have been six ECB reductions since then.
Mars manages around 14,000 mortgages on behalf of vulture funds. Many of the mortgages that Mars services are distressed and are on interest rates close to 8pc. Average rate decreases of 0.
89 percentage points will now apply to the mortgage holders whose loans are managed by Mars Capital from June. In a statement, the credit servicing firm said: “Mars Capital confirms it will decrease interest rates for the majority of customers on variable rate loans with payment changes effective from June 1, which will see monthly repayments decrease for a number of our customers. “Mars is currently writing to customers to advise of changes to their rate.
” One homeowner said he received a letter saying his rate is coming down from 7.7pc to 7pc. Another is to have their rate cut from 7pc to 6.
3pc. In response to a trend of recent ECB rate reductions, Mars is passing on an average interest rate decrease of 0.89 percentage points across our portfolios to impacted customers People whose mortgages are serviced by the likes of Mars Capital on behalf of vulture funds are known as “mortgage prisoners”.
This is because they are only offered very high variable rates and are unable to fix. They are unable to move their mortgage to another lender as many of them are either in arrears or fell behind on their payments in the past. “The rate decreases will be concentrated on our customers currently on the highest interest rates, ensuring they see the biggest benefit and aligning our loan portfolios with each other,” Mars Capital said.
It said that, in common with all financial services businesses, it keeps changes to ECB lending rates under constant review. “In response to a trend of recent ECB rate reductions, Mars is passing on an average interest rate decrease of 0.89 percentage points across our portfolios to impacted customers,” it said.
Many mortgages Mars services are on interest rates close to 8pc. Photo: Getty Today's News in 90 Seconds - 12th April Up to now it has not passed on any of the six ECB rate rises to its customers. Mars said: “This is our latest move to support our mortgage holders.
Between 2022 and 2024 we minimised variable rate increases as much as possible and kept customers on lower rates for as long as possible, against the backdrop of ECB increases totalling 4.5pc.” Mars Capital manages thousands of mortgages on behalf of funds.
In the last two years, Start Mortgages transferred the servicing of 11,000 mortgages to Mars. Start originated some of the mortgages on its books as it previously operated as a subprime lender before the property collapse. Last May, Mars told around 1,400 customers that their variable rates were rising by 1.
6 percentage points. It came at a time when banks were cutting mortgage rates. At the time it said the rates rise was to bring impacted customers’ interest rates into line with other loans across its loan book.
Pepper Advantage, which manages 130,000 residential, commercial and consumer loans on behalf of funds, announced further variable rate mortgage decreases in February for about 10,500 customers. Pepper said yesterday it cut rates in February and anticipates further reductions for customers in the near future..
