One Account rate cuts

Chinkle

Thanks to forum users who followed up re announcements on a rate cut following the recent BOE 0.5% cut.

Does anyone know what the cut will be? Given they haven't passed anything on recently and even went in the opposite direction of increasing their rate this year I hope they pass on the full whack. The margin between BOE and the SVR is crazy.

What's the point of base cuts if they aren't being passed on to customers, how is that going to help the economy? Just seems like an opportunity for the banks to claw back some profits from their own foolhardy, irresponsible lending of late.

lisyloo

What's the point of base cuts if they aren't being passed on to customers

Well they are being cut for people who went onto a BOR tracker rate
Those who chose to go onto "whatever the lender wants" rate will get exactly what they signed up to.

Just seems like an opportunity for the banks to claw back some profits from their own foolhardy, irresponsible lending of late.

Well I reckon it's Martins fault

Couldn't possibly be that you chose the wrong product could it? :rolleyes:
No of course not, definitely the greedy banks and Martin.

Chinkle

Hey, I didn't blame Martin - although you're right if we go at them in one area of their business they take it out on another.

All you bank charge reclaimants !!!

I don't mind being on SVR as the banks always played ball in the past - given the shrinking number of other options and personal circumstances - I'm going to stick with the lender for now.

I was just hoping to here some good news that RBS are passing on the full cut this time round.

lisyloo

as the banks always played ball in the past

Well, we are in the middle of an unprecedented banking crisis of massive proportions.
So at the moment I think any assumptions about SVR (or anything else) are now out of the window.
I don't think you should be suprised if things are a bit different right now.

I'm glad you're happy with your deal though.

FWIW - I think base rates will drop sharply, so you should see some relief soon, even if it doesn't follow what the BOE do.

MarkyMarkD

Stop saying "passing on the cut"! BoE base rate is irrelevant to mortgage rates.

Banks that "pass on the cut" aren't "passing on the cut". They are reducing their interest margins, because their cost of funds hasn't fallen by anything like 0.50%. And their cost of funds (over and above BoE base rate) is far, far higher now than it was two years ago or whenever you took out your mortgage in the first place.

Chinkle

Funny how we never heard of this inter-bank lending rate till now. What about when the banks were rushing to lend each other money - we weren't told we're undercutting the BOE rate because we are awash with cash/confidence!!!

lisyloo

we weren't told we're undercutting the BOE rate because we are awash with cash/confidence!!!

Yes, we blooming well were !!!!!

I was on 3.04% at one point in 2005.
We have had ludicrously cheap lending which is exactly why we are in this mess.

The point that a lot of people seem to be missing is that lending has in the recent past been VERY cheap. Now it's returning to normal NOT getting expensive.

If you were simply "born at the wrong time" and think the last few years are normal then you are in for a big shock I'm afraid.
But you seem to be basing things on your recent experience and making huge assumptions.
Listen to a few older people and believe me that your experience appears very limited and it appears that you making massive assumptions that things have always been this way based on a very short length of experience.

If SVRs have followed BOE for the last few years then it means absolutely NOTHING on which you can base any future predictions or expectations.
If you do base any financial plans on any such assumptions which are groundless then you are heading for a big shock.

MarkyMarkD

Absolutely. I had a mortgage with a 3% discount on SVR - i.e. around a 1% discount on BBR - for 2 years followed by 1 year at BBR+1.25%. Overall it worked out at around 0.25% below BBR over 3 years. Even then the lender wasn't making any money on the deal. Now, it would be positively suicidal.

People have had a very easy ride on mortgages in the early 2000s. We are moving back to a more rational market - rather like it was in the early 1990s after the last housing market crash - and people don't like it.

Gorgeous_George

Lending could be considered to be cheaper NOW than last year.

With inflation at 2.5% and interest rates at 5% this means borrowing to buy something cost 2.5%. With inflation at 5.2% and interest rates at 6.5% the cost of borrowing is just 2.3%.

Many people complain that their personal inflation is 10% or thereabouts. If that is the case, most bank loans are great value at 8%. Buy stuff now using borrowed money and it will be worth more next year.



GG