Base Rate Cut By 1.5%

roddydogs

Why all the fuss? if you wanted a "Tracker" why didnt you take out a "Tracker"? why take out a SVR then complain the rates havent dropped?
Same with Fixed Rate-if you took out a fixed rate, why moan that it hasnt reduced?

Andy_Hamilton

roddydogs wrote: »

Why all the fuss? if you wanted a "Tracker" why didnt you take out a "Tracker"? why take out a SVR then complain the rates havent dropped?
Same with Fixed Rate-if you took out a fixed rate, why moan that it hasnt reduced?

That's a bit harsh without knowing the facts. Thousands have come off fixed rates on onto the SVR only to find that they can't get a fixed rate deal due the lenders moving the goal posts for the competative rates (compared to when the original mortgage was taken out).

sherer

roddydogs wrote: »

Why all the fuss? if you wanted a "Tracker" why didnt you take out a "Tracker"? why take out a SVR then complain the rates havent dropped?
Same with Fixed Rate-if you took out a fixed rate, why moan that it hasnt reduced?

No one knows what it going to happen at the moment, rates could go down further, maybe even to 1% or less according to some sites.

With thousands coming off deals at the moment for some it makes sense to pay no fee and go onto a SVR that has the same rate as they are paying at the moment, then when people know what is going to happen with the market you can lock yourself into a tracker or fixed

katew87

Abbey have dropped a few of there fixed rates by 1% BRING IT ON!!!!! im securing mine today.

Baz_2

katew87 wrote: »

Abbey have dropped a few of there fixed rates by 1% BRING IT ON!!!!! im securing mine today.

But only for 2 years though with £1000 of fees.

Where are the 5 years ones!!!!

Jvic28

roddydogs wrote: »

Why all the fuss? if you wanted a "Tracker" why didnt you take out a "Tracker"? why take out a SVR then complain the rates havent dropped?

I think that's a bit harsh, the V in SVR means Variable. That usually means they vary with the Bank of England Base Rate and can vary to be more competitive. Problem is, they seem to put it up when base rate rises and if the base rate drops they don't seem to be as quick about matters.

I think most of us are aware that we're unlikely to see cuts of 1.5% as we know we aren't on trackers, but some sort of a cut is expected. As I said above, they're quick to increase but not so quick to decrease.

TOBRUK

Parisien wrote: »

I looked on Birmingham Midshires site, but couldn't find any up-to-date info about what they are going to do, especially about SVT borrowers, anyone shed any light on their intentions?

I telephoned them yesterday and they have passed on the October cut 0.5% and are now reducing and passing on this month's cut of 1.5% on my SVR (which will show I believe they said in Feb payment) - they are sending letters out.;)

Bernard_Coleslaw

Jvic28 wrote: »

I think that's a bit harsh, the V in SVR means Variable. That usually means they vary with the Bank of England Base Rate

Sorry, but it has nothing to do with the Bank Base Rate. It never has. We're just seeing that more clearly these days.

Problem is, they seem to put it up when base rate rises and if the base rate drops they don't seem to be as quick about matters.

What we saw historically was that the cost of funding mortgages closely tracked Bank Base Rate. Bank Base Rate fell (or rose) and the cost of funding would move pretty much alongside it - hence your SVR mortgage seemed to be moving with Bank Base Rate.

Over the last fifteen months, the world has changed. Lenders can't get cheap funding from the wholesale markets. Therefore there is more competition for savers' money. High-ish rates were paid there to attract them. So the cost of funding has gone off and done its own thing, independent of Bank Base Rate. In fact, earlier this year the Bank Base Rate was reduced by 0.50% and the cost of funding went in the opposite direction.

We live in strange times!

I think most of us are aware that we're unlikely to see cuts of 1.5% as we know we aren't on trackers, but some sort of a cut is expected. As I said above, they're quick to increase but not so quick to decrease.

I think you'll see some reduction, as costs are (slowly) settling down again. But you can perhaps see why we are where we are.

Jvic28

Bernard_Coleslaw wrote: »

I think you'll see some reduction, as costs are (slowly) settling down again. But you can perhaps see why we are where we are.

Base rate has dropped 2.25% since I last had a reduction on my mortgage.

Apologies if my information is incorrect but I have got it from a few sources (including MSE main site). This is from the Mortgage Advice Bureau:

Standard variable rate (SVR) mortgages

A standard variable rate mortgage offers the option of paying the lender’s standard variable rate (SVR) throughout the mortgage term. This rate increases and decreases in line with the Bank of England's base rate.


However, I never expected it to behave like a tracker and I understand there are other factors involved other that BofE Base Rate, but to not receive any reduction at all seems so unfair.

Bernard_Coleslaw

Jvic28 wrote: »

Base rate has dropped 2.25% since I last had a reduction on my mortgage.

Apologies if my information is incorrect but I have got it from a few sources (including MSE main site). This is from the Mortgage Advice Bureau:

Standard variable rate (SVR) mortgages

A standard variable rate mortgage offers the option of paying the lender’s standard variable rate (SVR) throughout the mortgage term. This rate increases and decreases in line with the Bank of England's base rate.


However, I never expected it to behave like a tracker and I understand there are other factors involved other that BofE Base Rate, but to not receive any reduction at all seems so unfair.

The information you have been given is, sadly, incorrect.

While I'm sure Martin is a very clever man, I would not take something as gospel just because it's on MSE.

Generally, lenders' SVRs have never been linked, contractually or otherwise, to Bank Base Rate. There might be a few that have offered specific guarantees, but SVRs in general are completely independent.

Is it correct that SVR doesn't automatically track BBR? Undoubtledly. Is it fair? Well, that's another debate completely.