Woolwich SVR shocker...
Discussion
I recently received a letter from Woolwich stating their SVR (currently at 4.99%) will now be tagged to the bank of England rate (ie BOE + 4.5%). They state that anyone on the SVR is not to worry as their mortgage will remain unchanged, but would be a useful addition as they can tell when their mortgage payments will alter.
Although not personally affected (as on an old BOE tracker anyway), I was surprised that they expect their borrowers to be so naive as to accept this as a benefit. It also implies that a big lender is happy to have their SVR sitting up at 7%, assuming a 2% BOE rate is fairly possible in the next 18 months or so.
We've never seen such a disparity of lending rates, some chaps on 1% BOE trackers and others on 5-6% fixed rates or 4-5% SVRs.
Are lenders trying to recoup the losses on these low BOE trackers that seemed so harmless in a buoyant economy? Perhaps Woolwich are trying to encourage customers with reasonable equity in their houses to take up their slightly lower BOE trackers, stimulating interest in their mortgage products?
Although not personally affected (as on an old BOE tracker anyway), I was surprised that they expect their borrowers to be so naive as to accept this as a benefit. It also implies that a big lender is happy to have their SVR sitting up at 7%, assuming a 2% BOE rate is fairly possible in the next 18 months or so.
We've never seen such a disparity of lending rates, some chaps on 1% BOE trackers and others on 5-6% fixed rates or 4-5% SVRs.
Are lenders trying to recoup the losses on these low BOE trackers that seemed so harmless in a buoyant economy? Perhaps Woolwich are trying to encourage customers with reasonable equity in their houses to take up their slightly lower BOE trackers, stimulating interest in their mortgage products?
alphonso said:
Are lenders trying to recoup the losses on these low BOE trackers that seemed so harmless in a buoyant economy?
Partly yes they are. alphonso said:
Perhaps Woolwich are trying to encourage customers with reasonable equity in their houses to take up their slightly lower BOE trackers, stimulating interest in their mortgage products?
Again partly.I suspect also that the blundering hand of the FSA is in there somewhere. The fact that lenders can set their SVR wherever they like is going to upset the FSA, who think that every mortgage holder in the land needs to be treated like a retard.
As such they will have made noise about how unfair that is, so the lovely people at Barclays have thought on their feet and decided to make their SVR a fixed margin above BoE base.
(BoE base being out of their direct control) Therefore when a new applicant takes out a non-lifetime deal with Woolwich they sort of know what they are getting at the end of the deal.
Its s
t if you are going onto their SVR, but it avoids some "treating customers fairly" hassle for the lender.It also encourages people to remortgage at the end oftheir deal (rather than the rate sitting thats going on at the moment.)
Olf said:
We have a Woolwich mortgage tied to Barclays Bank Base Rate which currently matches BofE base rate.
Do you think they'll try to feck around with that Scotal?
In a word no.Do you think they'll try to feck around with that Scotal?
They've said that they won't be affecting the BRT deals. Its only new deals and existing deals that go to SVR that will be affected.
If you have a Lifetime BRT with them you shouldn't have anything to worry about.
scotal said:
Olf said:
We have a Woolwich mortgage tied to Barclays Bank Base Rate which currently matches BofE base rate.
Do you think they'll try to feck around with that Scotal?
In a word no.Do you think they'll try to feck around with that Scotal?
They've said that they won't be affecting the BRT deals. Its only new deals and existing deals that go to SVR that will be affected.
If you have a Lifetime BRT with them you shouldn't have anything to worry about.
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