Thanks, I hadn't considered compunded interest. I work with personal loans and additional borrowing so had just based it on what i'd dealt with so it had seemed so high. I think its going to be a few months for her to be able to afford everything as she had bought the house knowing it would take a while to renovate so all her money had gone into that. And there are just under three left before she had agreed to pay. Do you know where she would stand legally? She would be happy to pay what she can afford but I dont see the budging from £100 which she can't currently meet.

Thanks for taking the time to read.

Hi

Firstly, an increase of 100% over 8 years works out at 9.05% per year if the interest is compounded - although this is high for a mortgage, it is better than most rates on the market so I don't think your sister-in-law has been taken advantage of.

I think your sister-in-law has 2 choices:

1) arrange a bank loan to repay the full amount to the couple (with the interest adjusted to reflect the early repayment). If possible I think this is the best option, as at least then the whole situation will be over and done with.

2) calculate how much she can afford to repay each month, and arrange a repayment plan with the couple that everyone is happy with

Good luck!

I have a bit of a condundrum regarding family lending. To be honest there's a thousand issues with the situation but though some of you guys may be able to help with the more legal/financial side of things! It's quite a long one so thankyou if you can sit through it!!

It's not myself in the situtation but sister-in-law. Ill go with Person A

Person A borrowed £5000 from Couple B, who happen to be her sister and brother in law. This was to help her get her foot on the property ladder and boost her deposit from £10000 to £15000. They apparently re-mortgaged to loan her these funds over 8 years. I say apparently as everything said at the moment is to be taken with a pinch of salt! The origional plan was that there would be a 5 year break and then Person A would start paying back monthly so she had time to get on her feet. Overall Person A was to pay back £10000 to them, that's right 100% interest. This is what they are claiming it has cost them. For the past year this has been fine however now Couple B have decided to split. Mrs B left Mr B. At first this caused no problen for Person A however now as Mr B has spent on holidays/clothes etc to try and win Mrs B back they are short of money and are demanding that Person A start paying £100 monthly of which she currently doesn't have. At the time of the split Person A checked several times with Mr B that he would not want payments early and even offered to start paying to help. She wanted to check as she needed a second hand car and didnt want to commit to anything until sure.

So firstly to me £10000 seems excessive unless they were charged an early repayment on they're mortgage. But if that's the case why not take additional borrowing instead of re-mortgaging? And secondly there were no legal documents drawn up. Person A is not querying wheather to pay it back but wants to stick to the origional aggrement. Person A is not very financially aware and i think that when the couple agreed to help they took advantage on this. Any thoughts would be greatly appreciated. Thankyou for sitting through it!