Lenders and the rate cut - a call to Martin

Charlton_King

It seems to me that our beloved leader has sufficient public profile and clout such that he could - and should - be taking up the cudgels on behalf of struggling mortgage payers in the same way he was keen to champion the anti-bank charges cause.

I'm aware that some lenders are making the case that their rates would not be due for review until December. However, I believe that once that has come and gone and we can see how the dust has settled, he should be taking every opportunity he can in the media to 'name and shame' the worst offenders.

It seems crazy to me in a climate like this that anyone's monthly repayment should actually go up, as seems to have happened in many cases - and perhaps he should be proposing that lenders should be persuaded not to invoke the finer points of their agreements with borrowers in such situations. This is becoming, in all but name, a greater national interest situation.

Obviously, lenders could ignore such pleas in the jolly, self-interested and bloody-minded way to which we have all become accustomed - but maybe if they can spare some time from their executive junketing to actually think about this, they might realise that HMG might just be serious about sending in the Commissars. Perhaps they need a final, very public nudging..?

I'm copying this to both the mortgage and discussion fora as I believe this really does need an audience

wymondham

Don't forget it's all a juggling act - if they cut rates then savers lose out .... they can never please everyone, but I would imagine there are more savers than mortgage holders????

dunstonh

It seems crazy to me in a climate like this that anyone's monthly repayment should actually go up, as seems to have happened in many cases

Why is that crazy? Annual review mortgages could see them see a rise as rates were higher in the early part of the year so they have to do some catch up. Some people were on lower rate deals and they are expiring and the current rate is higher. Quite logical to be honest.

The banks have a problem in that some just dont have the money to risk to give it all away. Better they look at solvency first rather than worry about 0.25-0.5% on the mortgage rate.

I doubt Martin would have any clout here at all as it wouldnt take much for a few economists to blow him away on a head to head on the news. It may not be popular to see some holding back some of the rate drops but when you understand the economics that is going on behind the scenes then it makes more sense. You can either join the Daily Mail waving crowd and argue about something you know nothing about or you can read up on it and understand the problems. I would suggest the latter.

opinions4u

Rightly or wrongly, the Government has decided that savers should pay up front for the country to survive a recession.

On 1st December the reality is that the rate on many high street savings accounts will drop below 1%.

There is only so far mortgage lenders reliant on savings balances can cut their rates, and we are very nearly at the floor.

If there's a 1% BofE cut announced in December, I'd be amazed if any lender is able to pass it on in full.

That won't be about naming and shaming. That will be about the reality of the money lent on mortgages has to be paid for (interest to savers) and the provider lending it on for house purchase has to recapitalise a battered balance sheet.

This is the reason some lenders have been wise enough to include a floor in their tracker terms and conditions - not so they can rip people off, but so that they can run their business prudently.

If only they had lent more prudently in the recent past too.

minimike2

You post this as if Martin is some kind of financial God.

Let me assure you, he is not. Mr Lewis has zero influence in the world of mortgage rates. And why should he? The banks are businesses and are there to make money. If you dont like thier products then go with another bank. Simple. If you cant get a product you want, rent.

The problem is not mortgage rates or banks policies. The problem is that people expect everything for nothing. And where did they get this baloney idea from? Yes, you guessed.....Martin Lewis. lol.

Thats probably a bit harsh, Martin gives some good tips for certain things and I dont knock him for that, but the extent to which peoples expectations have changed does mean that no one really understand the economics of anything anymore, which is fuelled by sites like this.