Rant!! Extortionate mortgage increase.

Thrugelmir

vet8 wrote: »

My complaint is still what I said earlier that with base rates and the bank swop rate very low it is a joke to be charging virtually the same SVR as they were over a year ago when rates were much higher.

A year ago the mortgage market was populated by far more lenders. Lenders that were lending aggressively on very low margins without even credit checking borrowers.

Those lenders have gone. The party's over. You are now paying for that excessive lending. That you benefited from too.

Now we are left with the banks and building societies that lent responsibly. Didn't take high risks. Credit checked their customers. Asked for deposits.

We all need to move on. Its a different era now.

Pobby

Thrugelmir wrote: »

A year ago the mortgage market was populated by far more lenders. Lenders that were lending aggressively on very low margins without even credit checking borrowers.

Those lenders have gone. The party's over. You are now paying for that excessive lending. That you benefited from too.

Now we are left with the banks and building societies that lent responsibly. Didn't take high risks. Credit checked their customers. Asked for deposits.

We all need to move on. Its a different era now.

Yes indeed. The problem is, as I see it, is the rapid and stark contrast in lending policies. Perhaps if lenders had worn their sensible hat 10 years ago so much of this could have been avoided. As mad as the lending party was a few years back, banks have now done a U turn. Of course they did need to tighten up but I am hearing of sound businesses being starved of cash flow and consequently suffering.

The banks have our money and I do think it is up to the government to take a harder grip on lending policies.

Thrugelmir

Pobby wrote: »

Yes indeed. The problem is, as I see it, is the rapid and stark contrast in lending policies. Perhaps if lenders had worn their sensible hat 10 years ago so much of this could have been avoided. As mad as the lending party was a few years back, banks have now done a U turn. Of course they did need to tighten up but I am hearing of sound businesses being starved of cash flow and consequently suffering.

The banks have our money and I do think it is up to the government to take a harder grip on lending policies.

My point is that the banks that are left haven't fundamentally changed at all. The perception is they have. What's changed is that all the "other" lenders have disappeared.

opinions4u

Pobby wrote: »

Yes indeed. The problem is, as I see it, is the rapid and stark contrast in lending policies. Perhaps if lenders had worn their sensible hat 10 years ago so much of this could have been avoided.

Agreed. Or even as recently as 3 years ago.

As mad as the lending party was a few years back, banks have now done a U turn. Of course they did need to tighten up but I am hearing of sound businesses being starved of cash flow and consequently suffering.

The business world could learn a lot about not relying on banks to manage their cash flow for them though.

The banks have our money

Which bit of your income did you give then?

and I do think it is up to the government to take a harder grip on lending policies.

So bank lending got us in to this mess. Banks should now lend more (even though the risks of lending have increased) but they should do it at a lower margin? That will help the banking system become so much sounder then!!

jamesd

vet8, you really should try a different lender at this point. With a decade of accounts for the business available you'll be in a far better position than you were when you started with UCB. At the moment, with them, you're just a nice source of profit to help offset some of the losses they will be making on their more normal loans.

Fixed rate mortgages aren't supposed to be cheaper than SVR or variable rate deals. Over the long term studies have shown that a person always using fixed rates will pay more than variable rate, becuase of the cost of the fixed rate protection that's built in to the product, which the consumer pays for in the fees and rate they get. You've been doing really well from the variable rate deal you have.

From the latest economic situation it seems that it'll be a year or two before rates start to rise so you might consider a variable rate deal instead of fixed rate. Do be sure to save the difference between the initial payments and say a 6% mortgage rate. You may need this to keep up with the mortgage payments later, after rates rise, though it sounds as though you're thoroughly solvent and likely to be able to cope without trouble.

You're completely wrong about banks making money on mortgages, in general, in recent history. The recent cause of the last two years of economic trouble was defaults on mortgages in the United States and it's moved over here with rising default rates in the UK. Not all sub-prime and self-cert, though that's where it started to happen first in both countries. This has led to the lowest ever Bank Rate and massive cash infusions in many countries to try to avoid a major recession caused by lots of banks going bankrupt or nearly bankrupt due to their mortgage lending losses. In a good year they might make 2% a year margin, with defaults after house price drops it doesn't take many defaults to bankrupt them. There have been around 70 bank bankruptcies in the US so far this year. You've probably noticed the UK rescues and forced mergers. Individual mortgages, including your own, can be profitable, but the overall picture is horrible for the mortgages granted with loan to value numbers in the 85-100%+ range that cause big losses if there's a repossession.

vet8

Thank you jamesd and opinions4u for your intelligent, well-argued and reasoned responses. It is good to see sensible responses and not just snide comments which you can get on this site.