A&L - When will they lower there standard variable rate?

Donna_k2003

Hi all

This is my first post so im hoping im doing this the right way.

PLEASE HELP.

Im coming to the end of a fixed rate mortgage with a and L.

Due to the decrese in house prices I will need 95% loan if i remortgage.

So I dont have many good options open to me.

I can stay with a & l on their standard variable rate, which i have just found out its 5.35

Does any one have any information about whether this is likely to change soonish.

Im aware many other providers have a much lower rate following the drop in bank of england rate. WHEN IS A&L GOING TO ACT ON THIS?

please help, i need to decide what im going to do when the fixed rate is up.

All suggestion's welcome.

Gorgeous_George

This page shows A&L's current deals.

With an LTV of 95% it does look like you will be stuck with A&L's SVR of 5.34%.

Compared to a 4.0% SVR with Nationwide you will be paying £66 per month extra per £100K borrowed (after 5 years at 6% on a 25 year mortgage).

I'd expect the SVR to fall next month but nothing is guaranteed.

GG

sundog

http://newsvote.bbc.co.uk/2/hi/business/7764736.stm

notoriously slow and not passing on the full cut

Fliss_M

With a 95%LTV I'd say your stuck for the moment. Unless you can find the cash to make it 90%, but even then the rates are not favourable.

Am afraid there isnt much you can do, but do double check your paperwork as a few have found they go onto a 0.99% + BOE rather then SVR with A&L. So it may be worth a look. (It also wouldnt surprise me if this is the reason SVR cuts are slow and not passed on in full, they have so many moving onto this tracker.)

alfista

Donna - I'm afraid you're probably stuffed (to use the technical term). My son was in exactly the same situation as you, went on to A&L's SVR a couple of months ago. His repayments shot up to horrendous levels, but have gradually dropped as A&L lower their SVR.

Some expert will now come along and explain things, but as far as I can see :
- A&L are a Spanish bank and aren't obliged to lower their SVR
- A&L are probably happy to have captive customers like you, who are now paying over the odds.

Gordon Brown and co should be doing something to help people like you, who are probably a good credit risk, but have been cornered into paying over the odds for their mortgage. However, ..... end of rant.

1978

aren't A&L owned by Santander, the same bank that owns Abbey?

there's probably a really straightforward explanation - but how come the Abbey SVR is lower than the A&L one?

WestonDave

Santander bought Abbey years ago as a normal merger, and its a brand they presumably want to continue. They picked up A&L in the fire sale when it was about to collapse and are presumably therefore happy to bleed what they can out of it - those that can will remortgage out which is fine as it puts capital back into the bank for further lending, those that can't will be higher risks and their higher interest will help fund the higher than average defaults. People will say what a nasty bank A&L is for not dropping its rate but as the brand probably has no long term future Santander will be quite happy making a bit more money.

b0rker

I have every sympathy for the OP. I suspect I will be in a very similar situation in September.

The strictness of the LTV issue is cornering a lot of people that bought at the top of the market on 100% mortgages and on short term (2 year) fixed deals. You may say that people should have had at least a 10% deposit when purchasing (I would agree) but of course if the banks are lending at 100% and the house prices were still rising then people were obviously going to take these deals. No one would of done so in hindsight but then predicting exactly when the bubble was going to burst was impossible.

The sad thing is that the OP could probably easily afford the repayments at the current fixed rates on offer. They just cannot secure a new fixed deal due to not meeting the new strict LTV criteria. It means living in fear on the SVR until the LTV criteria gets relaxed (hoping that your house value does not decrease yet further in the mean time). Or waiting until the interest rate on the SVR goes up so high that repayments become unaffordable and the house is repossesed.

That is neither in the interest of the bank nor the borrower.

b0rker

Another fact with A&L specifically in relation to their SVR is that A&L are offering some of the best interest rates on savings (well certainly according to this site anyway!).

Possibly they are keeping the SVR high to offset the cost of the higher than average interest rates on savings?

Basically persecuting the mortgage holders to satisfy the savers?

I myself have an ISA and a savings account with A&L entirely because their rates are so competative in what is a very poor market for savers. Both of which I only just opened in the last couple of months.

Donna_k2003

alfista wrote: »

Donna - I'm afraid you're probably stuffed (to use the technical term). My son was in exactly the same situation as you, went on to A&L's SVR a couple of months ago. His repayments shot up to horrendous levels, but have gradually dropped as A&L lower their SVR.

Some expert will now come along and explain things, but as far as I can see :
- A&L are a Spanish bank and aren't obliged to lower their SVR
- A&L are probably happy to have captive customers like you, who are now paying over the odds.

Gordon Brown and co should be doing something to help people like you, who are probably a good credit risk, but have been cornered into paying over the odds for their mortgage. However, ..... end of rant.

Hi Alfista

Thank you for a very useful reply

Your right its a very bad situation to be in. I didnt realise they aren't obliged to lower their SVR. INTERESTING

Donna_k2003

thanks for that.

Its a very interesting chart, trust me to be with one of the higher rates.

How can there be 2% difference if its suppose to be based (sort of) on the boe rate?