Nationwide to enforce floor / collar at 2%

GotAnySpareChange

bear in mind the Nationwide has also just withdrawn its SVR mortgages, apart from when people on special deals end can go onto it, i.e. people with trackers. Thus they will now have no incentive to lower their SVR anymore, I expect they will charge the full 2% above BOE base. period .

The trouble with the collar for me is it's small print and in conflict with their terminology of 'tracking BOE base rate'.

They will need to be careful if they are thinking about reraising the collar as and when they feel fit, the FSA will surely have something to say about that.

nomoneytoday

MrMicawber wrote: »

Why should the banks and building societies remove / waive the floors? I can't understand why people expect this as almost some kind of human right. All those on trackers signed up to them.

Sorry if I'm sounding unsympathetic but we just can't expect to have our cake and eat it.

Because IMHO Nationwide don't borrow at the BoE base rate, but from savers and LIBOR rates. Charging 2% could mean a loss, and no business aims to do that...

morrisoscar

My 5 year Tracker with Nationwide taken out in October 2004 has the following statement in the special conditions.

BANK OF ENGLAND BASE RATE - In the event of the Bank of England ceasing to set a relevant interest rate, we may, by resolution of our Board of Directors, declare some other comparable rate to be the Tracker Rate for the purpose of these conditions.

No mention of a collar,so am I one of the lucky few without?

No mention of who decides that the Bank of England has set an irrelevant base rate, surely not the Nationwide Board?

GotAnySpareChange

what other lenders decided to not enforce their collar floor?... I'm sure I heard of another, but I can't recall. I wonder what their policy is?

cloud_dog

GotAnySpareChange wrote: »

The trouble with the collar for me is it's small print and in conflict with their terminology of 'tracking BOE base rate'.

Ummmmm, No its not - read the T&C's.

GotAnySpareChange wrote: »

They will need to be careful if they are thinking about reraising the collar as and when they feel fit, the FSA will surely have something to say about that.

What a ridiculous thing to say.

They cannot and will not change any existing T&C's but are perfectly within their rights to assess and change the collar on any new contracts / mortgages should they wish.

MrMicawber_2

nomoneytoday wrote: »

Because IMHO Nationwide don't borrow at the BoE base rate, but from savers and LIBOR rates. Charging 2% could mean a loss, and no business aims to do that...

You seem to be agreeing with me but I don't think you meant to. Either that or you misread my post.

GotAnySpareChange

cloud_dog wrote: »

Ummmmm, No its not - read the T&C's.

What a ridiculous thing to say.

They cannot and will not change any existing T&C's but are perfectly within their rights to assess and change the collar on any new contracts / mortgages should they wish.

And I agreee, I meant existing mortgages,calm down tiger :snow_laug actually if a lender lowers its rates and reraises them on a whim, this is not a trivial matter and I reiterate this *may* be of interest to the ombusman and of course to us savy moneysavers!

bowson0

i am very glad ntionwide honoured me the further 0.75% cut on my mortgage, it has made roughly £75 per month difference, which i would rather be saving than paying

CashSaver_2

Frances63 wrote: »

I don't blame Nationwide at all for enforcing their terms & conditions, there is no reason why they shouldn't and good reason why they should.

However, I took out a Base Rate Tracker mortgage (BoE Base Rate + 0.75) with the Portman Building Society back in 2001. It has now merged with/(been taken over by) the Nationwide. It had no collar in the terms and conditions.

Will Nationwide be honouring the mortgage as I took it?

I also took out a mortgage with Portman in October 2006. It has now transferred to Nationwide. My current terms are + 0.75% above BoE rate.

However, in the KFI, under General Information, is the following paragraph.

All of our mortgages contain a clause which allows us to vary our Base Rate Tracker Variable Rate

Although there is no specific mention of a collar, I presume that this statement means that they can do what they like?

Ian_Griffiths_Halifax

CashSaver wrote: »

I also took out a mortgage with Portman in October 2006. It has now transferred to Nationwide. My current terms are + 0.75% above BoE rate.

However, in the KFI, under General Information, is the following paragraph.

All of our mortgages contain a clause which allows us to vary our Base Rate Tracker Variable Rate

Although there is no specific mention of a collar, I presume that this statement means that they can do what they like?

If that is the only explanation, then if they try to charge you a higher rate above Base Rate, then you can always argue that this was unclear as you thought that this clause simply meant that the Interest Rate it's self would vary, and not the Margin. Unlike a Fixed Rate which would not change at all.

The KFI was introduced for a good reason and that was to provide the customer with the Key Facts and be clear in doing so. This is what you base your judgement on as to whether or not you will take out the mortgage and it protects you as well as the Lender. It is there for clarity and do away with all of what was known in the past as 'the small print'.