Abbey - why haven't they reduced their SVR?

juniper1

I don't know whether anyone has posted about this before but I have a mortgage with the Abbey whose SVR (standard variable rate) is sitting at 4.94%. I am considering writing to the Abbey and asking why when Bank Base was at 5% their SVR was at 6.94% (1.94% above base) and now that Bank Base is at 0.5% the SVR is at 4.44% above base! Other lenders, i.e Nationwide, Halifax etc,. have reduced their SVR to a more reasonable level, i.e 3.5% and 3.00 respectively.
I came off a fixed rate with the Abbey in January and am waiting for a good deal to come out from either them or someone else but are we benefiting from the Bank Base rate drop - NO! And we are losing money because of savings so whilst others are benefiting from their lenders amending their SVR's I and many many other people are losing out big time.
Is it because they are owned by Santander? i.e. a foreign company.
Does anyone know? Is it because their savings rates are higher than other institutions?
I feel quite strongly about this. I used to be a mortgage underwriter so have always been keen to follow rates obviously but I think I and all the other people in the same position as myself are being penalised here.
I'd be interested to know what other people think and what you think I should do.

nw_man

I think that the simple reason is that Abbey dont have to reduce their SVR.

Unfortunately its a commercial world and lenders are not forced to do anything.

Annoying, I agree.

dunstonh

They have a simple answer to give you. If you want to track the BoE rate then have a tracker mortgage. SVR is funded in multiple ways.

System

Abbeys SVR is 4.24, it's all over their website.

juniper1

Thank you Joeskeppi for that.
They've only just reduced the SVR to 4.24%. I did quote the wrong figure in my original thread. I realised that after I posted. I am currently paying 4.69%. Hopefully they will reduce our monthly payments down asap to the 4.24% figure but that has only recently happened. Its still very much higher than some other lenders and there are also other lenders out there that have higher SVRs & I feel sorry for the people who are on them like myself. I do not have a problem not having a tracker mortgage, when I took out the fixed rate that we've just come off it was the best rate at the time and I've done very well with it. My annoyance is that some lenders are not reducing their SVR's quick enough when the Bank Base has gone down nor are they reducing their SVR's to reflect the Bank Base reductions. There are 4 major lenders out there who have responded straight away to the reduction and their borrowers are benefitting. I am currently waiting to see what the market does and hopefully get a good fixed rate for 2/3 years.

dunstonh

I am currently waiting to see what the market does and hopefully get a good fixed rate for 2/3 years.

2-3 fixed rates will almost certainly be poor choices when the rates start to rise.