Accord Mortgages - Increasing SVR?!

[Deleted User]

MarkyMarkD wrote: »

IMHO if rates stay at their current low levels, this will happen to more and more lenders.

Lenders will either report large losses - and I bet they're coming, when the building society reporting season gets under way early next year - or they will put up their SVRs because there is virtually nothing else they can do.

Exactly, this is surely just the tip of the iceberg. With so little room for manouvre, I wonder if we'll start to see increases across the board. Just in time for the election too.. :rotfl:

Joe_Bloggs

@Thrugelmir
You single out Nationwide in you quote

Building society SVR's average nearer 5% already. Other than Nationwide all are dependent on retail deposits.

Why are they any different from any other another building society in your view.
J_B.

Thrugelmir

Joe_Bloggs wrote: »

@Thrugelmir
You single out Nationwide in you quote
Why are they any different from any other another building society in your view.
J_B.

Unlike the smaller societies the NW has access to wholesale funding. Around 50% of its deposits are raised this way. It didn't lend loosely in the boom years. Maintaining high credit standards for applicants.

The smaller local societies have seen a net outflow of funds this year. So need to attract deposits. Pick up a copy of the Sunday Times Money section and there'll be half a dozen offering good fixed term rates on deposits up to £2 million.

Joe_Bloggs

I bow to your research. There is perhaps a legal restriction on the building societies of obtaining no more than 50% of what they lend from wholesale money markets.
J_B.
Edit
If I am to obtain financial information regarding lucrative savings opportunities through a newspaper then there has been a serious failing of the internet marketing strategy by the building societies.
J_B.

BargainMad_3

Accord are a sub prime lender and they know full well that most - if not all - of their existing customers will not be able to "up sticks" and remortgage at a better rate than the SVR they offer.

So they know you are stuck with them. There is no link to base rate but you can safely bet that when the base rate starts to rise they will follow the upward movements yet have more or less ignored the downward movements.

You are "free" to move but they know you can't so they have an SVR on the high side in the safe knowledge you can't do a thing about it.

I have seen far worse SVRs though. I know it is difficult but it could actually be a lot worse. Some sub prime SVRs are several percent above Accord's new rate and their current borrowers would love to get below 6%. Scant consolation but happening all the same.

[Deleted User]

@BargainMad, you're right, looking around the remortgage comparison sites, rates aren't too far off unless you have a gargantuan deposit. Looks like we wouldn't save much, if anything at all, by switching at this time. I guess it's just a sign of the times. :rolleyes:
On the subject of sub-prime though, I gotta say, I'm still glad we bought when we did because there's absolutely no chance we would have been able to buy a house now, or ever. Seems the gap between rich and poor has widened even more now than at the height of the housing bubble, and companies like this are all too happy to take advantage..

benjo

BargainMad wrote: »

Accord are a sub prime lender .......

Are they exclusively sub prime?

Markyt

benjo wrote: »

Are they exclusively sub prime?

Not exclusively, but many of their clients are as that how the business was originally pitched.

benjo

Markyt wrote: »

Not exclusively, but many of their clients are as that how the business was originally pitched.

Phew, had me worried, since my mortgage is with them, put in a 40% deposit, no defaults, ccj's, arrears etc and got a 4.69% fix for 5 years, which didnt feel like a sub prime rate - thanks for taking the time to clarify for me.

BargainMad_3

Yes I should have pointed out that Accord offer "prime" mortgages as well (such as the above fix) but the reason they can pitch their SVR higher than others is because a lot of their mortgage book is sub prime and their borrowers have large Loan to Values and/or have self certificated.

They know these borrowers can't move elsewhere and so can squeeze them with their SVR, although as I mentioned it is by no means the worst out there. Who knows, by March next year (when Accord goes up) there might be a few more lenders inching up their mortgage rates if they have no obligation to track the base rate.