Interest rate rises....sneeky but could be the start..
Discussion
Who can you trust when they pull this one out of the bag ????
http://www.timesonline.co.uk/tol/money/property_an...
http://www.timesonline.co.uk/tol/money/property_an...
Which in the FSA's book is treating customers fairly.
If the bank retains the right to set the SVR where it likes, then the bank can be hassled over it. However if at the start fo the mortgage the banks clearly states how a continuation rate will be arrived at they are, in the regulator's eyes, allowing that customer to make an informed decision.
Barclauys have simply thought round the problem (one which is likely to grow as rates rise) and put in place a margin that makes them money
(Nationwide are suffering with their "never more than 2% over base" promise on their SVR.
Skipton (another mutual) have removed their "never more than 3% over base" promise until conditons "improve".
Woolwich have set their margin at a profitable level. So they are Treatng Customers Fairly, whilst still making money. Which they have been attacked for, but most of their trackers are for life so the SVR won't apply, and they want those who fix their rates to remortgage anyway.
The customer suffers at the hands of the regulator once again........
If the bank retains the right to set the SVR where it likes, then the bank can be hassled over it. However if at the start fo the mortgage the banks clearly states how a continuation rate will be arrived at they are, in the regulator's eyes, allowing that customer to make an informed decision.
Barclauys have simply thought round the problem (one which is likely to grow as rates rise) and put in place a margin that makes them money
(Nationwide are suffering with their "never more than 2% over base" promise on their SVR.
Skipton (another mutual) have removed their "never more than 3% over base" promise until conditons "improve".
Woolwich have set their margin at a profitable level. So they are Treatng Customers Fairly, whilst still making money. Which they have been attacked for, but most of their trackers are for life so the SVR won't apply, and they want those who fix their rates to remortgage anyway.
The customer suffers at the hands of the regulator once again........
anonymous said:
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I've been told they have no plans to move Barclays base away from BoE, but yes I can understand the concern.anonymous said:
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Its on the illustration. Which a lot of people don't read. Thing is, and sorry to bang on, but the FSA assume every applicant is an idiot. They insist we treat clients as idiots. Trouble is that means the lenders idiot proof themselves, ala Woolwich's new SVR, and they do it with the regulator's blessing. anonymous said:
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At the moment the answer to that is "it depends". Some people are better of sticking where they are, other's are better moving. Depends on the Lender they are with, the LTV, the applicants plans, and of course not everyone wants to sit on a variable rate. dirty boy said:
I'm currently on Nationwide SVR, which IIRC is 2.5%. Unsure as to what to do, if you say N'Wide are struggling, I assume they're going to whack it up sooner rather than later?
They can't whack it up unless the base rate changes. THe never more than 2% over base promise is part of your terms and conditions. As soon as base rises, so will your mortgage. Until base moves, it cannot change.
scotal said:
dirty boy said:
I'm currently on Nationwide SVR, which IIRC is 2.5%. Unsure as to what to do, if you say N'Wide are struggling, I assume they're going to whack it up sooner rather than later?
They can't whack it up unless the base rate changes. THe never more than 2% over base promise is part of your terms and conditions. As soon as base rises, so will your mortgage. Until base moves, it cannot change.
dirty boy said:
scotal said:
dirty boy said:
I'm currently on Nationwide SVR, which IIRC is 2.5%. Unsure as to what to do, if you say N'Wide are struggling, I assume they're going to whack it up sooner rather than later?
They can't whack it up unless the base rate changes. THe never more than 2% over base promise is part of your terms and conditions. As soon as base rises, so will your mortgage. Until base moves, it cannot change.
I'm undecided whether to take an SVR rate of 3.99% or tracker at 3.19% over BOE base. I'm moving and will be sticking with Scottish Widows as the lions share of my mortgage will remain at 1% over BOE base for term.
I can't remember the last time I was so uncertain what the next few years will bring.
I can't remember the last time I was so uncertain what the next few years will bring.
Noel said:
I'm undecided whether to take an SVR rate of 3.99% or tracker at 3.19% over BOE base. I'm moving and will be sticking with Scottish Widows as the lions share of my mortgage will remain at 1% over BOE base for term.
I can't remember the last time I was so uncertain what the next few years will bring.
Well, it seems like a fair bet that once rates start going up, so will the SVR - banks seem to be itching to rase SVRs even without a base rate increase to give as an excuse. I guess in the short term the two will probably rise at about the same pace but it's difficult to know until we see the first base rate increase (maybe 4th Feb?).I can't remember the last time I was so uncertain what the next few years will bring.
I guess eventually the SVR will hold whilst the base rate continues to edge up: if base rate was 5%, 3.49% above base would seem quite a lot. Haven't been in this game long enough to know what SVRs could look like in that situation to be honest. Assuming this is a realistic scenario, the question is, how long will it take for the tracker to become more expensive and thus will it be worth taking it in the meantime? Plus, by that time there might be more competitive products on offer. For me, I'd look at the tracker with the expectation to remortgage after a short while (I guess with the same lender so you can keep your other tracker), so it'd probably come down to fees and lock-in periods.
By the way, what happens with overpayments on a mortgage with two simultaneous rates? I guess they use it to repay the cheaper debt first? Or maybe the oldest?
Noel said:
I'm undecided whether to take an SVR rate of 3.99% or tracker at 3.19% over BOE base. I'm moving and will be sticking with Scottish Widows as the lions share of my mortgage will remain at 1% over BOE base for term.
I can't remember the last time I was so uncertain what the next few years will bring.
It's only got to go up 0.5% to mean you're paying more. If it starts to go up, chances are it's not going to stop at that level. I'm surprised you're debating this one.I can't remember the last time I was so uncertain what the next few years will bring.
SJobson said:
Noel said:
I'm undecided whether to take an SVR rate of 3.99% or tracker at 3.19% over BOE base. I'm moving and will be sticking with Scottish Widows as the lions share of my mortgage will remain at 1% over BOE base for term.
I can't remember the last time I was so uncertain what the next few years will bring.
It's only got to go up 0.5% to mean you're paying more. If it starts to go up, chances are it's not going to stop at that level. I'm surprised you're debating this one.I can't remember the last time I was so uncertain what the next few years will bring.
bogwoppit said:
By the way, what happens with overpayments on a mortgage with two simultaneous rates? I guess they use it to repay the cheaper debt first? Or maybe the oldest?
Depends on the lender, but if you have two seperate account numbers you should be able to nominate which debt you pay first. Yep 2 accounts so I can off set against either or over pay. Obviously I'm going to deal with the higher rate mortgage first.
My question is really about the gap between BOE base and SVR's. I have no doubt an increase in BOE base would lead to an increase in SVR but will they increase like for like.
I checked today and Scottish Widows are now offering 2.89% over BOE base rather than 3.19% (2 yr period with tie in). Still 3.99% SVR. I'm edging towards taking the deal rather than SVR.
My question is really about the gap between BOE base and SVR's. I have no doubt an increase in BOE base would lead to an increase in SVR but will they increase like for like.
I checked today and Scottish Widows are now offering 2.89% over BOE base rather than 3.19% (2 yr period with tie in). Still 3.99% SVR. I'm edging towards taking the deal rather than SVR.
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