Chelsea mortgage rate?

Mithos

MarkyMarkD wrote: »

Mithos

The other factor you've missed is the FSCS levy which amounts to around 1% of savings balances (or 1% of mortgage balances). Whilst this should be borne by savers, as it's a result of savings at other institutions going wrong, in practice it is likely to be borne by SVR mortgage borrowers as they are the only ones who - at least to some extent - are not going to leave in the current climate. Savers can leave at the drop of a hat; tracker mortgage borrowers get the cuts whatever; fixed rate mortgage borrowers pay their fixed rate but the lender doesn't actually receive that because they've contracted to pay it away.

Those institutions which HAVE "passed on" rate cuts in their SVRs are not pricing realistically and they will be losing money this year as a result. Whether that's the right way to run your business is for each institution's directors to judge.

That's quite interesting, I didn't know that, so thanks for going into details and explaining. :-)

MarkyMarkD

You are very welcome. The FSCS is an insidious tax on building society (and to a lesser extent bank) customers which shouldn't have happened the way it has.

bob2

What's particularly annoying is they've set the max LTV to 65% - even for existing customers.

About 2.5 years ago we borrowed from them at 81% LTV. When our 3 year fix comes to an end this summer we'll probably still be around 80% LTV (any gains in value + our repayments negated by recent price falls). So the Chelsea have nothing for us at all!

Does anyone have any idea whether LTV limits are always rigidly stuck to? Even in cases where there are no affordability issues and good credit history?

MarkyMarkD

I think you're rather deluded if you think your LTV will be about the same, unless you have made some serious overpayments. Your capital payments in the first three years of a mortgage will be very small.

I also see no reason why Chelsea would specify an LTV limit if they didn't intend to stick to it. The reason for specifying such a limit is that it is hard for people to remortgage - at the best rates - with LTVs above 60% and therefore there's no need for Chelsea to attempt to be competitive.

bob2

Thanks for your view on how strictly they interpret their LTV limits. I don't expect them to be flexible but I'd be interested to hear from anyone who has direct experience with dealing with the Chelsea over LTV issues.

Not deluded about the LTV - could be a little bit off but not far off. Our initial LTV (and purchase price) was based on a valuation nearly 3 years ago - there were price rises after we bought (probably around 14% to the peak in our area), which of course have since been wiped out but we are now probably only around 5% below the initial valuation.

The Chelsea indicate that they use the Halifax/Nationwide house price indices to revalue for remortgage (i.e. adjust initial valuation based on the trends they show). According to these we are currently at around 79% LTV right now with our outstanding balance. In a few months when we're due to renew we'll probably be up to around 81-82% LTV perhaps 84% at most given current trends and our repayment schedule.

Ryan23

I received a reply from the Chelsea BS today re a letter - from myself -complaining about their high SVR of 5.79%. Rather cooly/snootily their reply included the unbelievable remark: "I am unaware of what rates other companies are currently offering"....if you believe that folks then I could sell you 20,000 shares in RBS!!! :rotfl: At present I am on fixed payment for the year. According to the Chelsea the SVR rate does vary throughout the year and it is possible to "Pay more off your mortgage when the rates decrease and your payments stay the same". Is this the case? I also seemingly pay interest on an annual basis and not daily. They offered to "quote me a figure" to change my account from an annual basis to a daily basis. However, would this make any difference to my monthly payment? Is it better or worse to be on daily or annual interest? Finally, If I could leave the Chelsea today I would! The tone of their letter was: take it or leave it! Advice please!

MarkyMarkD

What more advice do you expect? An SVR is whatever they want it to be. If you can't remortgage away, then you are stuck paying it.

dwsjarcmcd

Ryan23 wrote: »

I received a reply from the Chelsea BS today re a letter - from myself -complaining about their high SVR of 5.79%. Rather cooly/snootily their reply included the unbelievable remark: "I am unaware of what rates other companies are currently offering"....if you believe that folks then I could sell you 20,000 shares in RBS!!! :rotfl: At present I am on fixed payment for the year. According to the Chelsea the SVR rate does vary throughout the year and it is possible to "Pay more off your mortgage when the rates decrease and your payments stay the same". Is this the case? I also seemingly pay interest on an annual basis and not daily. They offered to "quote me a figure" to change my account from an annual basis to a daily basis. However, would this make any difference to my monthly payment? Is it better or worse to be on daily or annual interest? Finally, If I could leave the Chelsea today I would! The tone of their letter was: take it or leave it! Advice please!

I suspect what you have is a mortgage where the interest is calculated daily but they set the payments annually. I would doubt their computer systems could cope with both daily interest options. It is better to have daily interest because overpayments are credited as soon as they are received,as opposed to only once a year.

ILW

samsuka wrote: »

Hi,



I took the SVR tracker on the understanding that it would track the Base Rate.



S

Who told you that?

Jasperparrot

If it makes you feel any better Mortgage intermediaries are not treated much better by Chelsea either........... here's the reply I received.

Further to your recent enquiries in respect of our SVR, you will appreciate we are in unprecedented times and therefore our SVR is constantly under review and has to be balanced taking into consideration the rates offered to our savers along with other contributary factors.

As you point out our SVR has not reduced following recent B of E rate changes and this most recent change to B of E base rate means we are again reviewing SVR. Should a reduction be made you will be advised accordingly.

Unfortunately I can not give you a more definitive answer at the present time.

Regards


National Sales Manager - Intermediaries
Chelsea Building Society