Nationwide: No More Rate Cuts

sooty&sweep

Hi

I've not read through this entire post but I have a Nationwide tracker and I was surprised but not upset that they didn't enforce the floor on my tracker.
I knew there was a floor, they included details to remind me on the letters they sent to advise me on my new repayment details when the interest rates started to be cut.
I totally agree with their decision not to pass on any further rate cuts as they do have to think about their savers.
Both of my parents are retired and they are now suffering because of the low interest rates and I'm sure their are many others in the same position. Hard working people who saved to establish a decent retirement for themselves.

For me what goes down will go back up at some point and I would much rather see some stability.

The number of redundancies they are forecasting this year is scary and I hope they are wrong but with the number of highstreet retailers that have gone or are teetering on the edge.
For me the problem has been people borrowing and being encouraged to borrow vast amounts on their credit cards and mortgage lenders offering people mortgages they cannot to pay back.
The may have the right multiple on their salary but it didn't take into consideration their other expenses as well.

Sorry for rambling but wanted to add my two peneth

MrDT

stevetodd wrote: »

fixed rates would still not be a viable alternative to a product that only has an increment of 0.38% over the Boe base rate, you cannot get away from the fact that 0.38% over base is a very small increment, If rates are high then the fixed rate alternatives will also be high.

By fixing ahead of the base rate rises you could lock in a rate of around 6.5%. Should the base rate hit 12% your tracker would indeed be a small increment above it, the fixed rate would be a huge amount below it.

Depends if people can afford the short term pain of high interest rates and ride out the storm. If they can, a tracker is probably the best financial option as interest rates will likely average out below 6.5% over 25 years (I said likely, don't want to be shouted down by the hyperinflationists).

I doubt those people squealing for rate cuts even though the base rate is the lowest it has been since Noah was a boy have much wiggle room in their finances. They won't survive high base rates on a tracker. That said, they probably wouldn't manage on 6.5% fixes either. Guess they're !!!!ed then.

majic_2

MiserlyMartin wrote: »

Whats his rate now 3% or less? Still not happy? At least you got a tracker you are lucky not to be on a fixed rate at 7% and all the good tracker deals have been pulled. Think yourself lucky.

...or even luckier that he is not on 15% as at the end of the 1980s. Who helped anyone then?

MissMoneypenny

stevetodd wrote: »

I did, but was amazed to later receive a letter from the Scarborough Building Society stating my mortgage payments would not fall below 3%! Why you ask, because not only does it state in the terms and conditions that the interest floor is 0.5% (+the 0.38% increment of the tracker) but it also states what the payment would be if interest rates fell to that level, (which at the time of taking out the mortgage I would have said no chance, but not now).

I immediately rang them and their initial reaction was that I appear to be correct that they have made an error but they would get back to me after the holidays.

Scarborough Building Society was in trouble so they are merging with Skipton Building Society.

"Skipton Building Society swoops on Scarborough"

"The two firms described the deal as a merger, although that turbulent market conditions and the continued slide in the housing market, had led to a "substantial impact" on Scarborough's profits and capital strength."

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5075952.ece

From the same link

"Some of the smaller players have been effectively shut out of the wholesale funding markets, making it difficult for them to raise capital to lend on to customers.

Nationwide, Britain's biggest building society, said last month that it was taking control of Cheshire and Derbyshire societies.


Britannia, the nation's second largest mutual lender, and the Co-operative's financial services arm, have begun preliminary merger talks although they have yet to agree on firm terms.


Yorkshire Building Society is taking over its rival Barnsley, while the Chelsea and Catholic building societies have agreed to merge"

and

details of the Skipton Scarborough merger effects on borrowers and savers

http://www.mortgagebrokers4london.co.uk/article.php?article_id=1110

uzubairu

MrDT wrote: »

I doubt those people squealing for rate cuts even though the base rate is the lowest it has been since Noah was a boy have much wiggle room in their finances. They won't survive high base rates on a tracker. That said, they probably wouldn't manage on 6.5% fixes either. Guess they're !!!!ed then.

You could be right.

Mozette

amcluesent wrote: »

Nationwide Building Society will not pass on any further interest rate cuts to the majority of its tracker mortgage customers.

The lender plans to invoke a clause in the deals enabling it to stop reducing the loans in line with cuts to the Bank of England base rate once official interest rates fall below 2%.

They should be MADE to pass on the rate cuts to hard-working families.

No they shouldn't! I know it has all been said before, but as someone with a tracker with Nationwide, I was not expecting it to track below 2.75% as it said in the terms when I took it out.

I cannot believe that there are people who take on such a huge debt without reading all that they are signing up to (or, maybe I can...)
Who, by the way, do you envisage making the well run & financially responsible Nationwide act thus? The Government - who have done such a sterling job of running the economy? (:rolleyes: sarcasm smiley, in case you can't be bothered to read the small print!)

My trackers come to an end this year, sad to say, but when I took them out 5 years was the maximum available. However I am happy to continue then on the Nationwide's base mortgage rate because I cannot find any deal that would work out better or cheaper.

More power to the Nationwide I say, and though I'm not in a position to have savings, I would hate to see the people who do be further disadvantaged at my expense. I managed this time last year when my mortgage was £100 a month higher than it is now, and the reduction has been a Godsend as it's enabling me to pay for some urgent repair work that needed doing to my home.

I feel very fortunate indeed at present, but that doesn't stop me feeling for those who are seeing their income eroded at the moment.
Swings and roundabouts.

Gorgeous_George

stevetodd wrote: »

I think that you have misundertsood my post George.

I am saying I am mortgage free in the house I live in but not in my 5.5 investment properties. I am saying that it is not IMO worth being mortgage free in my investment properties as I do claim the interest payments as an expense.

As a matter of interest (before someone else says it) I'm sure that you know that you can in fact claim interest payments for a mortgage on the house that you live in. I could for example remortgage the house I live in to buy an investment property, in which case because the loan had been taken out to fund the investment I could claim the interest as an expense

That is much clearer and spot on.

When your BTL mortgages come up for renewal (if indeed they do), it may be worth considering using your own home as security to grab a more attractive rate. Of course, this means that there will be less to offset against tax.

GG

carl1981

Gorgeous_George wrote: »

That is much clearer and spot on.

When your BTL mortgages come up for renewal (if indeed they do), it may be worth considering using your own home as security to grab a more attractive rate. Of course, this means that there will be less to offset against tax.

GG

George, think you have missed his point. Interest for an investment property is tax deductible, regardless of what property it is secured against.

stevetodd

Gorgeous_George wrote: »

That is much clearer and spot on.

When your BTL mortgages come up for renewal (if indeed they do), it may be worth considering using your own home as security to grab a more attractive rate. Of course, this means that there will be less to offset against tax.

GG

Yes I agree. As it happens they are not up for renewal for about 21 years (as I remortgaged 4 years ago), but we are going to buy again when we think the market is nearer the bottom, and as you say we are likely to get a better mortgage based on the house we live in, rather than a buy to let. We will look into nearer the time, probably in about 12 months unless a cheap auction property comes along.

mr.broderick

MiserlyMartin wrote: »

The greedy and reckless are not really just people who stretched to buy houses. They are the BTL brigade who thought they would get rich quick etc etc.... You should stop taking my posts so personally. You being one of the greedy would depend on your circumstances. I don't know them but you seem intelligent enough for that not to be the case.

How am i supposed to know who you are referring to martin? I am not a mind reader you know. Think of a colour and a tool...Don't cheat and look down...

---

Red Spanner?

---