Nationwide to enforce floor / collar at 2%

Ian_Griffiths_Halifax

mattwallisuk wrote: »

Sorry just searched and found the other thread which clearly states HSBC does not have a floor/collar on BoE tracker rates. Good to know!

Each KFI is applicable for that mortgage only. You can't go by what somebody else's rules.

I'm getting fed up with the number of people who are confused about whether or not there is a floor (collar) on their mortgage rate. Just to make that clear, I'm not getting fed up with the posters, just the fact that there are so many who can't tell.

In the past you could have a 'Capped Rate' where there would be a ceiling on what your rate could go up to. You could also get 'Capped & Collared Rates' which means there was a ceiling and a floor. This was way way before the current tighter regulation of mortgages and it was plainly obvious if there was a floor on the mortgage as there was an indication in the name of the type of product.

A Base Rate Tracker is a Base Rate Tracker. It Tracks the Base Rate. That's what the customer believes and that's what it should do. If that isn't what it does, then perhaps there's a case for Trading Standards to investigate how they are advertised if it doesn't do what it says. Afterall, if you get a Fixed Rate, does the rate ever change? No, you know what you are getting.

It's no good the lender putting their get out in the Offer and T&Cs, as the decision to take the mortgage is based on the KFI. Expense has already been incurred by the borrower, in many cases, before they receive the Offer Letter, with it's undisclosed 'extras'.

craiguito

I'm one of the lucky ones who got a tracker deal just before Nationwide pulled them in November, and although my deal has a collar, Nationwide honoured the interest cuts saving me a nice sum per month. However, I have the option to switch and fix my tracker rate. As Nationwide apparently won't pass on any further cut, should I switch and fix now?

mattwallisuk

0.5% cut....

Bettyboop

Gosh is ours is at a fixed rate for another 4 years! We are paying 5.25% which is double what most are paying! How I wish this could be reduced as financially we would cope a lot better.

sniperpenguin

Just confirmed with nationwide that mine will be staying @ 2.58% (0.58 above BoE mortgage) with their altered 2% cap.

TighterThanTwoCoatsOfPain

Bettyboop wrote: »

Gosh is ours is at a fixed rate for another 4 years! We are paying 5.25% which is double what most are paying! How I wish this could be reduced as financially we would cope a lot better.

I wouldnt worry... thats not true by a LONG shot. 'Most' will not be on trackers with a low margin.. Sure, there will be lots of people trying to jump on the band waggon now thinking that BOE + 2% is a good deal.. Wait till you see the look on their faces if (when??) the BOE starts to creap upwards to 'normal'. I feel sorry for those who are locking into brand new trackers at the current rates available.

Prav

TighterThanTwoCoatsOfPain wrote: »

I wouldnt worry... thats not true by a LONG shot. 'Most' will not be on trackers with a low margin.. Sure, there will be lots of people trying to jump on the band waggon now thinking that BOE + 2% is a good deal.. Wait till you see the look on their faces if (when??) the BOE starts to creap upwards to 'normal'. I feel sorry for those who are locking into brand new trackers at the current rates available.

That's true but there are a few BOE trackers, namely by HSBC and First Direct, with no exit fees and low(ish) booking fees. They are suitable if you want to overpay as much as possible, taking advantage of the low rates with no penalty. Then when rates become unaffordable you can jump ship to a more affordable fixed rate. But are we realistically going to be seeing BOE rates back up to 4-5% this year? Who knows/

Drawback is 60% LTV, plus the percentage margin is getting higher etc.

Like all mortgages it's whatever suits the person's individual circumstances I guess.

Ian_Griffiths_Halifax

Prav wrote: »

But are we realistically going to be seeing BOE rates back up to 4-5% this year? Who knows/

I can't see 4%+ within 12 months but maybe 18 months. I don't base this on any data, economic projections or scientific calculations. It's just my gut feeling having been in the business so long and it's never really let me down.

gaz1of5

neverdespairgirl wrote: »

Nationwide, Britain's biggest building society, will not pass on any further cuts to the Bank of England base rate to customers with tracker mortgages, The Times has learnt.

The lender plans to invoke a rule in its mortgage contracts allowing it to freeze tracker rates when the base rate falls below 2 per cent, affecting more than 200,000 customers.

http://www.timesonline.co.uk/tol/money/property_and_mortgages/article5430130.ece

Petition to get PM to alter legislation on mortgage collars - http://petitions.number10.gov.uk/Tracker-Mortgage/

gaz1of5

neverdespairgirl wrote: »

Nationwide, Britain's biggest building society, will not pass on any further cuts to the Bank of England base rate to customers with tracker mortgages, The Times has learnt.

The lender plans to invoke a rule in its mortgage contracts allowing it to freeze tracker rates when the base rate falls below 2 per cent, affecting more than 200,000 customers.

http://www.timesonline.co.uk/tol/money/property_and_mortgages/article5430130.ece

http://petitions.number10.gov.uk/Tracker-Mortgage/ - worth a try to change legislation