Accord Mortgages - Increasing SVR?!

[Deleted User]

Received some wonderful news from Accord Mortgages today.. despite the LIBOR dropping and the continuing low interest rates, they've kindly decided to increase their Standard Variable Rate by 0.65% from 5.34 to 5.99%, adding £39.12pcm to the cost of our mortgage, although payments will commence from Mar 2010.

Obviously my first thought was "Well, thanks for nothing Gordon!!" Their SVR has been sky high anyway since rates dropped to 0.5%, but I wonder if we're now looking at the beginnings of a new trend not only in credit card rate hikes, but mortgages too. Christmas has indeed come early for the banks.

My second thought was of course of all you lovely MSE people with more knowledge than I could ever possess in this area Are there any grounds for disputing the rise, proforma letters to be sent, or do we just have to take this one sitting down? I'm guessing it's the latter. They've thoughtfully included that the rise is "in line with your Mortgage Loan Terms" despite the fact that they felt no need to adhere to them whilst the base rate was dropping...

Ah, for the day when I'm no longer owned by these thieving weasels...

opinions4u

Myssinic wrote: »

Received some wonderful news from Accord Mortgages today.. despite the LIBOR dropping and the continuing low interest rates, they've kindly decided to increase their Standard Variable Rate by 0.65% from 5.34 to 5.99%, adding £39.12pcm to the cost of our mortgage, although payments will commence from Mar 2010.

Do the terms and conditions of your mortgage link it to LIBOR? If not, LIBOR isn't particularly relevant.

Obviously my first thought was "Well, thanks for nothing Gordon!!" Their SVR has been sky high anyway since rates dropped to 0.5%, but I wonder if we're now looking at the beginnings of a new trend not only in credit card rate hikes, but mortgages too. Christmas has indeed come early for the banks.

Credit card rates, unsecured rates and the differential between mortgage SVRs and the BofE base rate have all increased over the last 18 months.

Nothing to do with Christmas. Everything to do with the price lenders pay to raise funds and the increased risk of lending in the current environment.

My second thought was of course of all you lovely MSE people with more knowledge than I could ever possess in this area Are there any grounds for disputing the rise, proforma letters to be sent, or do we just have to take this one sitting down? I'm guessing it's the latter.

I'm not aware of anything.

They've thoughtfully included that the rise is "in line with your Mortgage Loan Terms" despite the fact that they felt no need to adhere to them whilst the base rate was dropping...

When you say they didn't adhere to the mortgage loan terms, please can you clarify this. If they have breached the T&Cs then you have a potential route to complain.

If they have simply varied a variable rate, unfortunately I can think of nothing that you can do about it.

There is a reasonable chance that the Accord mortgage book is running at a loss. They are probably trying to strengthen the balance sheet a little to ensure that they can continue to fund the business via the wholesale markets. Unfortunately you're caught up in that!

Ah, for the day when I'm no longer owned by these thieving weasels...

Doe you have any equity that you could use to remortgage elsewhere?

LizEstelle

My guess is it's an inducement to leave their SVR and to move onto a fixed rate and tie you in. They have dropped the rates on these (for existing borrower transfers) twice in the last month.

Their standard two year fix is now 5.19% with £0 sign up, which is not the worst deal in the world.

Oh and by the way - Gordon doesn't set Yorks BS (Accord) policy...

milliemonster

It might be because they're paying for my 3 year tracker at 0.39% above BOE 18 months ago, I'm pretty sure they didn't see that coming!

Thrugelmir

LizEstelle wrote: »

My guess is it's an inducement to leave their SVR and to move onto a fixed rate and tie you in. They have dropped the rates on these (for existing borrower transfers) twice in the last month.

Their standard two year fix is now 5.19% with £0 sign up, which is not the worst deal in the world.

Oh and by the way - Gordon doesn't set Yorks BS (Accord) policy...

My guess is it's an inducement for you to transfer your business elsewhere.

Trollfever

milliemonster wrote: »

It might be because they're paying for my 3 year tracker at 0.39% above BOE 18 months ago, I'm pretty sure they didn't see that coming!

:T

:rotfl:



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[Deleted User]

Thrugelmir wrote: »

My guess is it's an inducement for you to transfer your business elsewhere.

Well they're certainly doing a good job of it! :rotfl:
Unfortunately, like the rest of us impoverished Brits, I have zero funds to remortgage, and very littly equity. So effectively they can do what they like, I guess.

My real beef here though is that since the BoE rate started dropping, they only lowered their SVR by (how convenient) 0.65%. So what they're effectively doing is putting them right back to where they were. Of course, they were very keen to raise it immediately following a rate increase, but not so happy months after rates dropped by 5%.

Still, I'm fully aware that as a meagre pawn in their evil little game, there's nothing that I can do. But it's pretty offensive to see Mervyn on one hand telling us that homeowners can breathe a sigh of relief because rates will stay as they are (like he knows anything) whilst the FSA happily tolerates this sort of practice. If there can be an investigation into hikes in credit card charges which are not in fact intrinsically linked to the base rate, surely there should be one into these jokers who absolutely are.

And Gordon might not currently have anything to do setting rates, but he sure has taken a lot of the credit...;)

opinions4u

Myssinic wrote: »

My real beef here though is that since the BoE rate started dropping, they only lowered their SVR by (how convenient) 0.65%.

While it's an understandable frustration, they don't raise their funds at the BofE rate.

Accord have a low quality mortgage book (no disrespect intended - I am talking generally, not specifically) which has higher than industry average figures for repossession, arrears and write-offs.

Their cost of raising finance on the money markets will have risen in the last 2 years, despite BofE rates falling.

Still, I'm fully aware that as a meagre pawn in their evil little game, there's nothing that I can do. But it's pretty offensive to see Mervyn on one hand telling us that homeowners can breathe a sigh of relief because rates will stay as they are (like he knows anything) whilst the FSA happily tolerates this sort of practice.

The alternative could be to force them to charge BofE plus 2% and force the collapse of the parent company I suppose.

It's not nice for those in your position. But there are economic realities behind it for the lender.

[Deleted User]

Accord are a law unto themselves of course, but I wonder how long it will be before other major lenders decide to follow suit?

Thrugelmir

Myssinic wrote: »

Well they're certainly doing a good job of it! :rotfl:
Unfortunately, like the rest of us impoverished Brits, I have zero funds to remortgage, and very littly equity. So effectively they can do what they like, I guess.

My real beef here though is that since the BoE rate started dropping, they only lowered their SVR by (how convenient) 0.65%. So what they're effectively doing is putting them right back to where they were. Of course, they were very keen to raise it immediately following a rate increase, but not so happy months after rates dropped by 5%.

Still, I'm fully aware that as a meagre pawn in their evil little game, there's nothing that I can do. But it's pretty offensive to see Mervyn on one hand telling us that homeowners can breathe a sigh of relief because rates will stay as they are (like he knows anything) whilst the FSA happily tolerates this sort of practice. If there can be an investigation into hikes in credit card charges which are not in fact intrinsically linked to the base rate, surely there should be one into these jokers who absolutely are.

And Gordon might not currently have anything to do setting rates, but he sure has taken a lot of the credit...;)

Where do you think banks get the money they lend from?

[Deleted User]

Thrugelmir wrote: »

Where do you think banks get the money they lend from?

Why would it suddenly be so much more expensive to service a mortgage compared to a year ago, and by so much? Surely last year would have been the time to cite 'difficulties in the market'. I'm not a banker, but it seems like a pretty flimsy pretext to me.