Internet payday lender Wonga.com, has announced it has decided to expand into the mortgage market. The move comes as it becomes increasingly difficult for people to get a mortgage without at least a 25% deposit
‘Banks are tightening their belts at moment and are very reluctant to lend to people who probably can’t pay them back’ Errol Damelin, founder and CEO of Wonga told us. ‘That’s where we come in. We can offer almost anyone a mortgage all at our competitive APR of 4212%. What’s more is that we offer 100% mortgages so there is no need for a deposit. Mortgages are over 25 years so there is plenty of time for you pay off your mortgage, or to look at it another way, 300 monthly opportunities to miss payments and give us your house.’
Barry Knowles, a 34 year old unemployed painter from Bradford told us about his recently accepted application. ‘I have brought my new house for £150,000. The good people at Wonga were the only people willing to give me a 100% mortgage. At 4212% APR my monthly repayments are £526,500 for 299 months and then a final payment of £676,500. The lovely man at Wonga explained that the last payment is higher as it pays of the last of the interest and all of the original loan’
When we pointed out to Mr Knowles that he would be paying nearly £158 Million in interest, he admitted that it was ‘a little on the steep side’ but at least he ‘owned his own house’. ‘There may be some months where I struggle to keep up the half a million pound repayment, but they have a great scheme where I can borrow that money until payday, then pay it back with the small fee of £48,015.
Politicians from all the main parties have all been quick to jump on the public disgust bandwagon, but Errol Damelin told us that the criticism from the MPs wasn‘t a surprise. ’To be honest, I was expecting them to be angry, but they will soon change their minds when they see the great deals we can do on taxpayer funded second homes.’