Nationwide rate cut?

Locoblade

confused31 wrote: »

I just said the rates should be competitive for people who have 5 or 10 percent deposits, not as they are now as they are still too high.

confused

The problem is, 3 years ago a 5% deposit would turn into 10% after a year, and 20% within 2 years due to house prices rising, so if the homeowner defaulted on their mortgage there was always plenty of equity in the house for the lender to recover the money if the customer defaulted on their payments.

In 2008, a 5% deposit may well turn into a -5% deficit in 1 year, and -20% in 2 years, therefore there's a magnitude more risk for the lender because they have no way of recovering the money should a default occur. In addition to that, because of a looming recession etc, the percentage of customers who default is likely to rise, so even more risk overall.

lisyloo

I just said the rates should be competitive for people who have 5 or 10 percent deposits, not as they are now as they are still too high.

In a perfect world which we could design then you might be right and we might agree.
However you are clearly intelligent enough to understand that the banks aren't charities and are primarily in place for their shareholders.
Markets are not goverened by what is fair, moral or right.
Perhaps there should be a little more of that, I would agree.

But in reality I'm afraid there is no reason that anyone should expect everything in busines to always be fair and right as it might be in our perfect fantasy world. It's something that businesses are sometimes prepared to offer on THEIR terms.

I can assure you if I lent money it would be on MY terms alone and if people didn't think it was fair, then tough, it's MY money and MY risk, so I make the rules. I see nothing wrong in that.

If people can save up a 5% deposit, then why shouldn't they jsut save a little longer to get to 10% and buy a cheaper house when price have fallen?
Surely that puts then in a better posistion.

Whilst it might be ideal in a perfect world, I don't see that people have a right to demand credit. It's not a human right.

confused31_2

i think everyone as slightly gone of the original post which was are nationwide going to pass on the rate cut, which they havent, they have put it up.

People getting mortgages are at a all time low and the housing market is at a standstill due to the credit crunch, high house prices, high interest rates from banks plus a lot more fuel bills, food etc.......................

So I dont think the FTB's what everyone needs to come back, will be back in the future unless the banks start lowering their rates.

thats my personal point of view, i dont think they will come back until the house prices bottom out, when that will be is when the FTB come back, its alright the odd FTB with a 30% deposit back, but this is the minority and the market will stay stagnant for a long time.

http://www.tiscali.co.uk/news/newswire.php/news/pa/uknews/story2.html&template=/news/feeds/story-template-pa.html

http://www.telegraph.co.uk/finance/personalfinance/borrowing/3157059/Interest-rate-cut-will-not-help-first-time-buyers.html

take a look here, people are lookng at ther eown circumstances not what the majority of other peoples circumstances.

people taking mortgages are at a all time low from 2002, take a look at the articles.

confused

lisyloo

I agree completely with all your analysis about the housing market.

I don't agree that it's Nationwides obligation to sort out the housing market, to help people or necessarily their top priority right now.
Long term it should be a consideration but right now I think the banks have more immediate concerns.

Locoblade

confused31 wrote: »

i think everyone as slightly gone of the original post which was are nationwide going to pass on the rate cut, which they havent, they have put it up.

They haven't "put it up" though! Whenever they say on the news that "base rate drops will be passed on by lenders", all they mean is that the lender's SVR rate will drop. It does not and never has meant that they'll drop all their new mortgage offerings in line with the drop, because as has been discussed already, new mortgage offerings are not based on the BoE rate. Historically, it's true that LIBOR rates were strongly linked to BoE rates so a BoE drop often meant lower new offerings after a month or two, but from what I undertand, the BoE no longer has much of an effect on the LIBOR, which means no lower rates unfortunately.

Admittedly Nationwide (as far as I'm aware) haven't yet dropped their SVR following the Boe drop, so that is a bone of contention I agree, but they certainly haven't raised it, and to be fair to Nationwide their SVR was one of the lower ones to start with (6.5%?) so even without any drop it will still be similar to a large majority of other lenders who have dropped theirs.

confused31_2

http://forums.moneysavingexpert.com/showthread.html?t=1217769

look at this thread, it was posted yesterday, nationwide are putting their rates up.

Some banks have started to lower their rates first direct are offering people with 10% deposits a rate of 5.49, with a fee of 399 pound which to me shows a bank that wants to get customers back through the door.

confused

Locoblade

Yes but they are not putting up their SVR RATE!! Where's the bangshead smilie?

With regards to their new mortgage offers, Nationwide are doing nothing out of the ordinary. NOBODY is passing on the BoE cut to new mortgage offers as far as I know, because as we've already ascertained, the rates they're based on have very little to do with BoE rate. Nationwide are not in any way alone in putting up their new offers though, in the past few weeks most of the lenders have upped various loans due to (you guessed it) LIBOR rates going up.

First Direct only offer their best deals to those with 20% equity or more. Im not certain but you may qualify for their SVR with only a 10% deposit, this is admittedly fairly competitive at the moment at 5.5% (very competitive for an SVR), but its not a fixed rate or any special offer. With 20% equity however, you can take a pick of all their offers and get a tracker that gets you a rate of 4.99% with a fee, or 5.29% with no fees at all, so they're still keeping the better deals for those with more equity/deposit. FD have also recently withdrawn a couple of their longer term fixed rates and have upped (twice I think) their 2 year fixed rate in the last month or so, so they're no different to Nationwide really.

johnat11

I've been looking at Nationwide's tracker rates as our fixed rate with them has just ended. All their tracker rates went up today (an increased percentage on the base rate) plus they are now charging a £299 reservation fee for products which until last week were fee-free for existing customers.

Their SVR, even without a hoped-for rate cut, looks about the best deal for us...maybe one day soon we can pay off some chunks of the debt, in our dreams!

confused31_2

Locoblade wrote: »

Yes but they are not putting up their SVR RATE!! Where's the bangshead smilie?

With regards to their new mortgage offers, Nationwide are doing nothing out of the ordinary. NOBODY is passing on the BoE cut to new mortgage offers as far as I know, because as we've already ascertained, the rates they're based on have very little to do with BoE rate. Nationwide are not in any way alone in putting up their new offers though, in the past few weeks most of the lenders have upped various loans due to (you guessed it) LIBOR rates going up.

First Direct only offer their best deals to those with 20% equity or more. Im not certain but you may qualify for their SVR with only a 10% deposit, this is admittedly fairly competitive at the moment at 5.5% (very competitive for an SVR), but its not a fixed rate or any special offer. With 20% equity however, you can take a pick of all their offers and get a tracker that gets you a rate of 4.99% with a fee, or 5.29% with no fees at all, so they're still keeping the better deals for those with more equity/deposit. FD have also recently withdrawn a couple of their longer term fixed rates and have upped (twice I think) their 2 year fixed rate in the last month or so, so they're no different to Nationwide really.

just go on sky text page 165 and it will show you best buys, which is coming up first direct 90%ltv 5.49 percent it is their variable rate and its only got a fee of 399.

confused

Locoblade

confused31 wrote: »

just go on sky text page 165 and it will show you best buys, which is coming up first direct 90%ltv 5.49 percent it is their variable rate and its only got a fee of 399.

confused

Look on First Direct's own website and you'll see that Sky's information is wrong, as there is no mortgage they offer at 5.49% with a £399 fee for anyone! The closest to that is FD's SVR mortgage at 5.50% with £299 fee, but considering your source appears to have those facts wrong, are you sure they've got the 90% LTV correct as either?

Either way, it still doesn't change that your complaint is that 5% or 10% customers can't access the best deals, yet you're using First Direct as a good example despite them not offering their best rates to those without at least 20% equity. FD's SVR is only competitive because they are in a financial position to offer good rates at the moment, but they still offer their best deals for those with more equity, and if you're on the SVR there's no guarantee that they won't put that up on a whim if and when their current strong status changes.

I'm ducking out of this one now though if you don't mind, with all due respect we seem to be contesting small details but you don't appear to be seeing the overall situation by acknowledging anything that others are saying. You're of the opinion that banks (and Nationwide in particular) should be knocking 0.5% off ALL their rates including new mortgage offer, which is where we're coming from because no bank has done that, and no bank will do that given the current banking climate, it's nothing to do with greed. :beer: