Nationwide rate cut?

confused31_2

lisyloo wrote: »

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.

loo

the post is about nationwide passing the interest rate cut on, they havent they are putting it up, others may have put theirs down but nationwide havent.

Put the news on now people cant get mortgages especially FTB, i dont blame them not getting a mortgage as the svr of these banks compared to the BOE rates are rubbish deals.

Why do you think no one is getting a mortgage and why the housing market is at a standstill????????????

Is it beacuse the interest rates and fees the banks are charging are to high???

To look at the rates you have put down the nationwides rate is still better than them, it just makes me laugh how these banks expect the customers to come back by cutting .5% off thier rates, when there still well over 2% above the BOE rate.

your making out they are doing customers favours by dropping the o.5 % of if they didnt all them banks you mention would be over 7% which is a rubbish rate.

confused

Richardcardiff

tartanterra wrote: »

: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.

I'm confused. Say Nationwide acquired £10m from the wholesale money market 3 years ago at a rate of 5% and lent on £100k to me at 5.5%. Is the rate at which they acquired the funds variable and are they still servicing that debt?

feisty1

ajbell wrote: »

Any one know if Nationwide have announced if they are passing on the rate cut on savings or mortgages?.

For us advisers we have new rates as from 2moro..........

lisyloo

none of the banks

So "none of the banks" refers to Nationwide???
In which case I don't understand your use of language.

Why do you think no one is getting a mortgage and why the housing market is at a standstill????????????

Well I've got a mortgage? but then I've been increasing my deposit for a long time by saving.
Anyone with a decent deposit and decent income multiple can get a mortgage.
The housing market is at a standstill because current prices are out of reach of because of years of loose lending.
Sorry but whether you like it or not, there is going to be a correction.

s it beacuse the interest rates and fees the banks are charging are to high???[?QUOTE]

No, it's due to an asset bubble caused by years of loose lending criteria to prop it up. Letting it continue is not the answer.

it just makes me laugh

Glad you're finding it amusing.
Perhaps you should go to your local hostel and laugh at some repossesed families.
I bet your sides would be splitting.

when there still well over 2% above the BOE rate.

The ones I provided are SVRs.
I've never paid SVR in my life.
There are loads of deals better than them.
The point of the figures was to show the drops.

your making out they are doing customers favours by dropping the o.5 %

No, that wasn't the point I was making at all.

You said NONE of the banks.
In what way does NONE OF THE BANKS mean Nationwide (which is a name of ONE bank)??

Locoblade

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.

I wouldn't expect them to borrow money at stepped rates either, but it makes sense that they borrow the money as cheaply as possible based on the most likely scenario, which is that you'd remortgage at the end of your fix. I don't know the markets or the comparative rates, but I suspect borrowing money for 25 years would be significantly more expensive than for 2 years, so as taranterra mentioned, its logical that they borrow short term so they can offer the best fixed rate, because if they borrowed at the (more expensive) 25 year rate but you jump ship at the end of the fix, they've not made as much profit during that timeframe.

Locoblade

Richardcardiff wrote: »

I'm confused. Say Nationwide acquired £10m from the wholesale money market 3 years ago at a rate of 5% and lent on £100k to me at 5.5%. Is the rate at which they acquired the funds variable and are they still servicing that debt?

What he's saying is they only borrow that money for 3 years, in line with your fixed rate, so they do need to acquire new funds for you to continue as a customer once that 3 years is up.

tartanterra

Richardcardiff wrote: »

I'm confused. Say Nationwide acquired £10m from the wholesale money market 3 years ago at a rate of 5% and lent on £100k to me at 5.5%. Is the rate at which they acquired the funds variable and are they still servicing that debt?

As previously alluded to, money is normally borrowed by the lender at a fixed rate for a short period, as the lender will assume (rightly!) that most people will remortgage after a discounted deal, rather than pay the dreaded SVR!

tartanterra

Locoblade wrote: »

What he's saying is they only borrow that money for 3 years, in line with your fixed rate, so they do need to acquire new funds for you to continue as a customer once that 3 years is up.

:T That's exactly what I'm trying to say!

confused31_2

lisyloo wrote: »

So "none of the banks" refers to Nationwide???
In which case I don't understand your use of language.



Well I've got a mortgage? but then I've been increasing my deposit for a long time by saving.
Anyone with a decent deposit and decent income multiple can get a mortgage.
The housing market is at a standstill because current prices are out of reach of because of years of loose lending.
Sorry but whether you like it or not, there is going to be a correction.

s it beacuse the interest rates and fees the banks are charging are to high???[?QUOTE]

No, it's due to an asset bubble caused by years of loose lending criteria to prop it up. Letting it continue is not the answer.

Glad you're finding it amusing.
Perhaps you should go to your local hostel and laugh at some repossesed families.
I bet your sides would be splitting.

The ones I provided are SVRs.
I've never paid SVR in my life.
There are loads of deals better than them.
The point of the figures was to show the drops.

No, that wasn't the point I was making at all.

You said NONE of the banks.
In what way does NONE OF THE BANKS mean Nationwide (which is a name of ONE bank)??

you make me laugh, you say you have a mortgage fair play to you for saving but trust me your the minority.

Have you got a house now?

When did you buy your house?

ive looked at the svr deals you put up and the only one that looks any good is First Direct.

Im just saying that the banks may say they are passing on the drop , but in my eyes it should be a lot more than a 2% gap between themselves and the BOE rate.

Its like what a well known supermarket done in the past when they promised to knock 50 percent of 10 items of fruit they sold in their shop.

When all they did was increase it from 1.35 to 3.00 then when it was 3 pound have a big campaign saying they were halving 10 items of fruit when in reality they were putting it up slightly more than it was before at 1.49.

This was all within a matter of 2 months.

People arent thick and they know when they are being took for a ride, lets hope house prices come down 50 percent and lets hope the banks lower their rates .5% above the BOE RATE.

It would be great for everyone.

I want houses to come down and i hope they come down 50 percent

Locoblade

confused31 wrote: »

the post is about nationwide passing the interest rate cut on, they havent they are putting it up, others may have put theirs down but nationwide havent.

Im just saying that the banks may say they are passing on the drop , but in my eyes it should be a lot more than a 2% gap between themselves and the BOE rate

As has been said many times on here, new mortgage deals are primarily tied to LIBOR rates, not the BoE rate. LIBOR or swap rates are the rates that banks pay to borrow large chunks of money from each other. Because banks are going bust left right and centre, naturally those banks WITH money to invest are fairly reluctant to lend to those without, unless the rate they can lend at is worth the risk. Because of this reluctance to lend (the credit crunch), LIBOR rates are high, so mortgage rates are high.

No banks have lowered their NEW mortgage offerings since the BoE drop because LIBOR rates are just as high now as they were last prior to the BoE drop, and thats unlikely to change until the whole banking crisis is sorted out. The reason trackers are now starting to go up too is because although the BoE is now lower, again the bank needs to borrow that money to lend to you at a LIBOR based rate, so in order to make a profit, theyve had to raise their adjustment above BoE to compensate for the drop.

What they' have generally done though is drop their SVR, this doesn't help new home buyers or remortgagers as such, but it will help those in negative equity and others who are also unable to remortgage after their fix/discount finishes, so are forced onto SVR.

What we need to remember is the BoE base rate has an effect on the whole economy, its not simply a mechanism to set mortgage rates, so just because the rate drops, doesn't mean new mortgages will.