Accord Mortgages - Increasing SVR?!

benjo

captainhaggis wrote: »

Forgive me, but can someone explain how a bank can just increase their SVR for existing customers?

I've asked a similar question on another (newer) thread but I'm still not entirely sure I know the answer.....

Doesn't a mortgage offer usually state what the lender's SVR is and state that this is the rate onto which a mortgage will revert at the end of any fixed period?

My mortgage switches to "Barclays Base Rate plus 2.440%" at the end of my fixed period. This is in my mortgage paperwork in black and white.

Could my lender just suddenly decide to charge me 20% instead, or whatever rate they so chose?!

Rephrasing your first paragraph by replacing the word increase with vary.......

'Can someone explain how a bank can 'vary' their Standard 'Variable' Rate for existing customers?'

Thats it in a nutshell, the rate is variable and is quoted as current at the time you take the product, but remains subject to variation, upwards or downwards at the banks discretion. If the rate wasnt variable it would be a 25 year fixed rate deal.

You are right, on your mortgage offer it will say what you will revert to after the fix ends - and the rate you revert to is variable, but quoted at it's current rate and I dont think there is a single thing you can do about that.

There are some mortgages that revert to an SVR, that also come with a 'guarantee' not to be higher than (example only) 2% above BoE base rate, like yours

"BBBR + 1.99%, currently 2.49%, variable for the remaining term of the mortgage"

the guarantee however isnt always what you and I might think is a guarantee and usually has a get out clause like yours does

"
Barclays Bank Base Rate
Barclays Bank Base Rate (BBBR) typically follows the Bank of England Base Rate but it is not guaranteed to do so. The Bank of England Base Rate can go up or down and is announced by the Bank of England's Monetary Policy Committee every month."

busybee100

captainhaggis wrote: »

Forgive me, but can someone explain how a bank can just increase their SVR for existing customers?

My mortgage switches to "Barclays Base Rate plus 2.440%" at the end of my fixed period. This is in my mortgage paperwork in black and white.

Could my lender just suddenly decide to charge me 20% instead, or whatever rate they so chose?!

It seems the answer is yes
I asked the same question yesterday in this link

It sounds as if you have a similar product to myself.

Bx

captainhaggis

busybee100 wrote: »

It seems the answer is yes
I asked the same question yesterday in this link

It sounds as if you have a similar product to myself.

Bx

Hiya BB

Not sure I'm getting from that thread what you are.... My T&Cs say that the bank's SVR is XX% above BBBR and I have this in black and white. I understand that my overall rate changes in line with the BoE (and in turn BBBR) but given that these rates look likely to stay at below a couple of % for the next few years, that's not all that big a worry.

My worry is that my lender suddenly decides to change their SVR to BBBR + 25% or whatever. That, I don't think, can be done?! Surely that represents a change to my agreement with them?

captainhaggis

benjo wrote: »

Thats it in a nutshell, the rate is variable and is quoted as current at the time you take the product, but remains subject to variation, upwards or downwards at the banks discretion. If the rate wasnt variable it would be a 25 year fixed rate deal.

You are right, on your mortgage offer it will say what you will revert to after the fix ends - and the rate you revert to is variable, but quoted at it's current rate and I dont think there is a single thing you can do about that.

Hiya Ben

I think you misunderstood a little.

I understand that the overall percentage can changed based on the BBBR or BoE rate but I am keen to know if the lender can change how many percentage points above the BoE/BBBR rate they charge.

My T&Cs say, for example, 10% above BoE Base. Can they, next week, tell me they're going to charge 20% above BoE Base instead just because they feel like it?

benjo

captainhaggis wrote: »

Hiya Ben

I think you misunderstood a little.

I understand that the overall percentage can changed based on the BBBR or BoE rate but I am keen to know if the lender can change how many percentage points above the BoE/BBBR rate they charge.

My T&Cs say, for example, 10% above BoE Base. Can they, next week, tell me they're going to charge 20% above BoE Base instead just because they feel like it?

Im no expert, but I quoted Barclays site which seems to say that you revert to 1.99% above Barclays Base Rate = 2.49%, which is the bit you have in black and white.

Can they call you next week and tell you they are going to charge 20% above BoE Base......

Barclays Bank Base Rate
Barclays Bank Base Rate (BBBR) typically follows the Bank of England Base Rate but it is not guaranteed to do so. The Bank of England Base Rate can go up or down and is announced by the Bank of England's Monetary Policy Committee every month."

Yes, I think this says they can, since your product isnt linked to the BoE Base, but Barclays Base Rate which is not guaranteed to follow BoE base rate - although it typically does.

captainhaggis

benjo wrote: »

Im no expert, but I quoted Barclays site which seems to say that you revert to 1.99% above Barclays Base Rate = 2.49%, which is the bit you have in black and white.

Can they call you next week and tell you they are going to charge 20% above BoE Base......

Barclays Bank Base Rate
Barclays Bank Base Rate (BBBR) typically follows the Bank of England Base Rate but it is not guaranteed to do so. The Bank of England Base Rate can go up or down and is announced by the Bank of England's Monetary Policy Committee every month."

Yes, I think this says they can, since your product isnt linked to the BoE Base, but Barclays Base Rate which is not guaranteed to follow BoE base rate - although it typically does.

Hiya Ben

But I'm talking PURELY about the part of the new interest rate that my lender directly controls. That is the part ABOVE the base rate that they set. Can they say that instead of charging 10% above Barclay's Base they'll instead charge me 20% above Barclay's Base?

I don't think they can.

benjo

I think they can - but Im no expert.

captainhaggis

OK matey, cheers. In which case it almost makes their terms and conditions not worth the paper they're written on.

If lenders are going to change the element of their SVRs that THEY control, surely that should be made clear before someone takes out a mortgage?

Had I been told "you'll revert to our standard variable rate which is whatever we want to set it at on any given day" I'd probably have stayed clear.....

benjo

No, dont take my word for it I really dont know if they can or cant change that part, but essentially it doesnt matter much if you go onto the SVR or not. Since they control their own base rate, all your deal tells you for sure is that whatever they raise or lower their own base rate to - you will be ??% above or below it.

They want/need more money, simples, increase their own base rate to 5% above BoE instead of 1.99% above and leave your ??% alone, you are still paying more, they dont need to change your deal - at least thats how my muddled mind read their blurb.

dwsjarcmcd

captainhaggis wrote: »

OK matey, cheers. In which case it almost makes their terms and conditions not worth the paper they're written on.

If lenders are going to change the element of their SVRs that THEY control, surely that should be made clear before someone takes out a mortgage?

Had I been told "you'll revert to our standard variable rate which is whatever we want to set it at on any given day" I'd probably have stayed clear.....

If your T & C's state that the revert rate is x above BoE base rate at the end of the fixed rate then the Lender cannot change this, it must revert to this rate.

If your T & C's state that the loan reverts to the Lenders SVR, currently x%, they can change that rate at their own discretion.

In your case, I'll think you'll find that the rate is set at x% above the base rate and can't be altered