The Unbelievable Chelsea BS

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!

nesssie1702

What charges will you incur if you decide to leave the Chelsea BS? How much longer are you on a fixed rate for?

Given the tone of their letter - your options are either vote with your feet or put up and shut up?

But you'll have to take into consideration what your outstanding mortgage is, what your property value is and whether you can get a better deal somewhere else.

samsuka

They have been inundated with calls and emails about the fact that they are currently the worst out of all the major lenders to cut their rates and reduce their SVR. I chose a tracker mortgage thinking that the SVR would fall roughly in line with the base rate, but they seem to be basically refusing to cut it at all any more, making life very expensive.

Not sure what anyone can do about it other than keep the pressure up. Am considering whether its a case of being mis-sold a policy as we took the policy on the expectation that base rates would drop and so would our payments, but seem to have been held over a barrel on this one with limited recourse.

They are driving me nuts their whole response to it.

Ta

S

dannykos

samsuka wrote: »

Am considering whether its a case of being mis-sold a policy as we took the policy on the expectation that base rates would drop and so would our payments...

surely if you wanted a base rate tracker, that's the deal you should have opted for? I know svr's do tend to follow a similar pattern, but there is no requirement for banks to drop svr in line with base rate drops.

_Andy_

samsuka wrote: »

Not sure what anyone can do about it other than keep the pressure up. Am considering whether its a case of being mis-sold a policy

It's not a policy, it's a mortgage.
If you wanted a mortgage whereby the rate was guaranteed to drop if base rate fell, you should have opted for a base rate tracker.
SVRs do not have to fall in line with base rate.
There is no mis-sell.

samsuka

dannykos wrote: »

surely if you wanted a base rate tracker, that's the deal you should have opted for? I know svr's do tend to follow a similar pattern, but there is no requirement for banks to drop svr in line with base rate drops.

100% agree, but at the time their rate was a lot better than the best base rate tracker. But then what is the point in having a SVR tracker if the SVR barely moves. I would only have been slightly worse off if i had gone for a fixed rate mortgage from the start.

My understanding was that while i knew the SVR would not track the base rate exactly, the difference in rates changing would be offset by the better initial rate offered, and other lenders SVR's have all come down significantly more.

Surely if the base rate drops by 4.5% and the SVR only falls by 1.15%, that is too much of a differential, especially when other banks and building societies are cutting by between 2.5 - 4%.

I guess its a case of chalk it up to a lesson learnt, but its a hard lesson to swallow.

ILW

samsuka wrote: »

100% agree, but at the time their rate was a lot better than the best base rate tracker. But then what is the point in having a SVR tracker if the SVR barely moves.

Cannot see what you are complaining about, you took a gamble, and on this occasion, lost.

By the way, I do not think there is any such thing as an SVR tracker.

Conrad

Switching to daily interest is generaly the way to go. (This is not advice, merely a general remark)

dunstonh

The tone of their letter was: take it or leave it!

Which is exactly what it should be. They have their terms. If you dont like them then go elsewhere. Its a free market.

There is a lot of confusion it appears with people mixing up BoE trackers and SVRs. SVRs are often funded by savers or have more of a link to LIBOR. Also,the quality of the mortgage book comes into play as well. A lower quality mortgage book is likely to have higher rates to cover the risk of failures.

Peelerfart

Surely if your fed up with your current lender then you should go. If they are acting like they want you to leave then give them their wish and go somewhere else.It's not much of a mither to change lenders and you get the small sense of satisfaction of doing your bit to contribute to their downfall .

If you do leave, don't ask for an SVR Tracker though 'cos you'll make yourself look a little silly.

samsuka

ILW wrote: »

Cannot see what you are complaining about, you took a gamble, and on this occasion, lost.

By the way, I do not think there is any such thing as an SVR tracker.

OK discount mortgage. Potatoe potato. Our recent mortgage is the Chelsea SVR -1.19%. As far as i am concerned its an SVR tracker. Google the term.

Thanks for your compassion. I took a (correct) gamble on the base rate, not the mortgage lender that i was getting it from. Virtually every other lender has cut their SVR rates in-line with the BOE rate, how on earth was i to know that Chelsea would refuse to cut their mortgage in-line with it.