Nationwide rate cut?

Richardcardiff

My tracker rate with the Nationwide will be 4.74% following the recent 0.5% BoE rate drop. I'm coming to the end of my deal and was quoted 5.98% (5 year fixed rate). This is quite a hike bearing in mind I wont be borrowing any additional funds.

So the Nationwide 'loyalty' rate is not that generous (saving of £300 on admin fee only) bearing in mind they wont need to find additional funds and the LIBOR rate issue doesn't apply.

marshallka

I spoke to Intelligent Finance today and they are passing it on in the next week or two so I was told.

IPP-Believer

The Nationwide are putting their rates up tomorrow for new customers.

Also the LTV is being reduced to 85% for new borrowers. I hope they will still have deals for existing customers who have a higher LTV.

Locoblade

Richardcardiff wrote: »

So the Nationwide 'loyalty' rate is not that generous (saving of £300 on admin fee only) bearing in mind they wont need to find additional funds and the LIBOR rate issue doesn't apply.

I think you'll find the "LIBOR rate issue" does still apply. When offering you the mortgage 2 years ago, Im sure they'll have borrowed the money to pay for your house based on your original mortgage terms, ie at the lower intro rate to start with then onto SVR, which is a higher rate. I imagine if you remortgage with them you're effectively a new customer in that to offer you that new discounted rate, they'll need to go to the money markets again and "re-borrow" the money at a rate that's still profitable for them, paying back the original money they borrowed which you'll no longer be using.

Its a simplistic viewpoint and only a guess, but I suspect that may be how it works

lisyloo

confused31 wrote: »

It makes you laugh the bank of england rate drops to 4.5%, none of the banks pass it on to the customer

You must be confused :rotfl:

The following banks have passed it on in FULL

Barclays has cut its standard variable rate by 0.5% to 6.64% • Birmingham Midshires has cut its standard variable rate by 0.5% to 6.94%
• Cheltenham & Gloucester has cut its SVR by 0.5% to 6.5%
• Clydesdale Bank has cut its standard variable rate by 0.5% to 6.64%
• First Direct has cut its standard variable rate by 0.5% to 5.5%
• Halifax has cut its SVR by 0.5% to 6.5%

• Lloyds TSB has cut its SVR by 0.5% to 6.5%
• Natwest has cut its SVR by 0.5% to 6.69%
• RBS has cut its SVR by 0.5% to 6.69%
• Yorkshire Bank has cut its standard variable rate by 0.5% to 6.64%

• Woolwich has cut its SVR by 0.5% to 6.64%

Richardcardiff

Locoblade wrote: »

When offering you the mortgage 2 years ago, Im sure they'll have borrowed the money to pay for your house based on your original mortgage terms, ie at the lower intro rate to start with then onto SVR, which is a higher rate.

Uum? I doubt whether the terms with which banks acquire funds from the wholesale market is the same way that they then lend it on to us i.e. a stepped rate. I had always thought banks acquire a lump of cash from the wholesale market at a certain rate and then effectively package it up and sell it on at a higher rate.

I should think the money Nationwide used to acquire my hourse 2 years ago was obtained at a set rate from the wholesale market. They dont need to acquire any new funds for my debt; they set their 'new' mortgage rate according to the prevailing market conditions i.e. based on what a new lender would quote, which now is at a significant profit to them based on the rate at which they had acquired the funds.

tartanterra

Richardcardiff wrote: »

Uum? I doubt whether the terms with which banks acquire funds from the wholesale market is the same way that they then lend it on to us i.e. a stepped rate. I had always thought banks acquire a lump of cash from the wholesale market at a certain rate and then effectively package it up and sell it on at a higher rate.

I should think the money Nationwide used to acquire my hourse 2 years ago was obtained at a set rate from the wholesale market. They dont need to acquire any new funds for my debt; they set their 'new' mortgage rate according to the prevailing market conditions i.e. based on what a new lender would quote, which now is at a significant profit to them based on the rate at which they had acquired the funds.

:rolleyes: I think you will find - in line with most lenders - that Nationwide borrowed "short term" and will almost certainly need to aquire new funds to finance your debt.

confused31_2

lisyloo wrote: »

You must be confused :rotfl:

The following banks have passed it on in FULL

Barclays has cut its standard variable rate by 0.5% to 6.64% • Birmingham Midshires has cut its standard variable rate by 0.5% to 6.94%
• Cheltenham & Gloucester has cut its SVR by 0.5% to 6.5%
• Clydesdale Bank has cut its standard variable rate by 0.5% to 6.64%
• First Direct has cut its standard variable rate by 0.5% to 5.5%
• Halifax has cut its SVR by 0.5% to 6.5%

• Lloyds TSB has cut its SVR by 0.5% to 6.5%
• Natwest has cut its SVR by 0.5% to 6.69%
• RBS has cut its SVR by 0.5% to 6.69%
• Yorkshire Bank has cut its standard variable rate by 0.5% to 6.64%

• Woolwich has cut its SVR by 0.5% to 6.64%

Im with nationwide and they havent dropped their rate they have put it up, i have also seen on the nationwide loyalty mortgages that they are now charging fees for existing customers, before they wasnt, to be honest i still think the rates are bad considering the BOE rate is 4.5%

Considering i got a 5 year deal in 2005 fixed at 4.69 when the the BOE rate was 4.75, i had a fee to pay 199 pound, but now i think the banks are getting greedy, and trying to make up for all the money they have loaned out, which they are not going to get back.

Im lucky that i have still got over 2 years on mine, FTB are just not going to borrow at these high rates and they will just not bother buying houses, i know i wouldnt if i was in their shoes.

thats why i think its going to get worse, before it gets better....

you may say im confused, but if my memory serves me properly nationwide are not passing on any great deals to their current customers.

And if i was a first time buyer i would not get a mortgage now at these rates are to high. I would just rent until they come down, if they dont come down then the banks wont get the business, not only this if the banks want to get customers they will have to lower the rates for FTB as we all know the FTB are the people everyone needs to come back to get the housing market back.

I think its great for FTB'S, they can hang on until the prices come down and if the banks dont lower the interst rates so they can buy them , the banks will be stuck with a load of repossessed houses.

confused

steelhorse

haven't seen anything on them

lisyloo

you may say im confused

I was specifically referring to your comment in post #6 that "none of the banks pass it on".
When quite clearly many have.

I'm sorry if your haven't but saying that none have is quite clearly mis-representing the situation and is simply untrue.