BoE rate / SVR

msc1977

Hi this may be a really dumb question but i was wondering if reductions in the BoE rate would automatically (eventually) have an effect on mortgage SVR's?

We are currently with Accord on a 4.73 fixed rate till 31/01/09, at the current time Accord fixed rates for what i anticipate they will say our LTV is arent that different to their SVR, we're not really in a position to move to another company as we have a few credit issues, (missed and late payments on c/cards / catalogues..no defaults or ccj's and mortgage is up to date and always paid on time and always has been) so anyway i think we'll be better off staying with Accord to save new credit checks etc but i wonder if we'd be better spending a few months on their SVR (which i hopw will come down a little) till things settle down a little (if they do) ...any advice would be much appreciated. thanks

Gorgeous_George

It may well have an effect eventually but nothing is automatic. By Jan 09 things may be somewhat clearer and better rates may be available to more people. In the meantime, don't spend anything that you don't need to spend.

GG

msc1977

Thanks GG, we can just about afford Accords current SVR of 7%if we need to although it will be a struggle, what i dont want to do is tie in to a fixed rate of 6.49 / 6.99% for example which their current fixed rates are and then find the SVR cut to the same rate we're on. We certainly wont be taking anymore credit in the next three months and with the exception of one c/c (one payment behind but slowly catching up) we are totally upto date with everything now.
i think we will wait till the new year before making any decisions......any other opinions????

opinions4u

A BofE rate cut does not automatically mean a SVR rate cut for any lender.

The SVR is usually linked to LIBOR rates which have fallen by approximately 0.25% following the last BofE reduction which was 0.5%..

If this was repeated after 9 x 0.5% BofE cuts, your SVR would reduce to 2,.25% when the BofE rate would be 0%. Would this be what happens? Sorry, dunno!

Many lenders who provide tracker mortgages have a 'collar' rate of around 2.5%-3.0% that protects them against unusually low BofE rates.

I think that competitively, those lending money to mortgage lender (wholesale funders, governments and savers) expect a return of some sort on their money. In turn, the lenders will mark the price up meaning that the mortgage payer still pays something!

patchman

Accord have reduced their SVR by a paltry 0.15% to 5.85%, even though the Yorkshire Building Society who own them have reduced theirs by 0.3%. Surely they get their funding from the same place? What a rip off !!!! At least D ick Turpin wore a mask :mad: :mad:

patchman

svr should read 6.85% not 5.85%

koexelek

opinions4u wrote: »

A BofE rate cut does not automatically mean a SVR rate cut for any lender.

... but a Bank of England rate rise will guarantee an SVR rise within seconds of it being announced :rolleyes:

Jimbo65

Are there grounds for formal complaints to FSA on grounds of lenders not passing on Base Rate cuts? I'm with Egg, they passed on .15 % of a .25% reduction in March, then upped it again a few weeks later, and now they have failed completely to pass on the .5% in October. On top of this they failed to insure us for two years having done so for the previous 8 years........and on a £7 arrear I was receiving very threatening and harrassing calls from some burke called Edward stating the matter was 'urgent'. Nope, they hsadn't written to advise of the unpaid £7, nor had they advised us the rate was going back up, they did apologise for not insuring us for two years.......so I am somewhat miffed with Egg not least because they were a reliable, competitive lender when we took a loan from them 8 years ago.
They have been shoddier than I could have imagined over the past 2 years and communicating with them is as much use as a chocolate teapot so.......are there grounds for a formal complaint? Does anyone know? Is the Treasury impotent do you think? What's the point of BoE Base Rate cuts that are not passed on?
Thoughts please folks, would be much appreciated. Egg are overdue a very severe kicking and I am in the perfect frame of mind to deliver it.