Nationwide to enforce floor / collar at 2%

gaz1of5

http://petitions.number10.gov.uk/Tracker-Mortgage/

Ian_Griffiths_Halifax

gaz1of5 wrote: »

http://petitions.number10.gov.uk/Tracker-Mortgage/

This Petition is ridiculous! Nationwide had a collar in their KFI and said they would remove it. They then went back on that but gave a lower collar than the original. These customers are not being treated unfairly, however, a Petition against lenders who are trying to do this with collarless deals would be justified.

mattwallisuk

Have any lenders with collarless deals announced that they are collaring yet?

Prav

Ian_Griffiths_Halifax wrote: »

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.

Agreed.

So a 2 year fixed at say 4-5% with limited overpayment facility might not be the most sensible option, in the short-term. Of course like all trackers, its a gamble and not for the risk averse, or on a strict budget.

dezc2000

I'm with NW - and was very happy when they opted not to enforce the collar. Personally I'm happy they did that, and can't really complain if they don't pass on another 0.5% drop.

However - this is from the quoted Times article (above)

Halifax, Britain's biggest lender, had a collar which meant that tracker rates would fall no lower than 3 per cent, regardless of how far the Bank of England cut the base rate. However, last month the Financial Services Authority told Halifax that its collar could be unenforceable, leading the lender to say it would not invoke the rule.

So ... I wonder whether NW will be put under similar pressure by teh FSA, or whether they have waived part of the collar will be enough?

Dez

Ian_Griffiths_Halifax

Prav wrote: »

Agreed.

So a 2 year fixed at say 4-5% with limited overpayment facility might not be the most sensible option, in the short-term. Of course like all trackers, its a gamble and not for the risk averse, or on a strict budget.

A 2 year fixed at 5% certainly wouldn't be my first recommendation to most people. A 2 year Tracker or a 5 year Fixed is my gut feeling.

Walaboobah

I've got a lifetime tracker with Barclays @ BBBR + 0.5%. So assuming Barclays does pass on the rate reduction which they should despite the change on their website after the December reduction my rate should reduce to 2%.

I'm happy with that at the moment, but obviously I have concerns as and when the rate rises again.

Are we likely to see rates go up to 15% again as they did in 1992 (albeit briefly) or is a figure of around 5% a more realistic outcome.

I know nobody can offer guarantees, I was just wondering what people's opinions are on the likely medium to long term outlook for rates

mattwallisuk

medium term we will not be going up to silly rates like 15%....

1-2 years and we'll be back to 4% or 5% and another several years to break through to higher ground.

All IMHO.

humfer

dezc2000 wrote: »

I'm with NW - and was very happy when they opted not to enforce the collar. Personally I'm happy they did that, and can't really complain if they don't pass on another 0.5% drop.

However - this is from the quoted Times article (above)


So ... I wonder whether NW will be put under similar pressure by teh FSA, or whether they have waived part of the collar will be enough?

Dez

Pretty sure Halifax were on dodgy ground as they failed to put details of the collar in many of the KFI documents. However as far as I'm aware NW are ok on this front (was certainly mentioned in all my documents), so would be surprised if they are lent on to lower further. As it stands they have given me a 0.75% bonus tracking at 2% and not the 2.75% in my contract so cannot grumble

morrisoscar

morrisoscar wrote: »

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 who decides that the Bank of England has set an irrelevant base rate, surely not the Nationwide Board?

Advice please, no mention of a collar, so would NW have to pass on the reduction?