SVR rises higher and higher whilst base rate lowers

bashali

Rip off, does any one know if accord mortgage customer will get voting rights on merger ?

Thrugelmir

islay wrote: »

Am I the only one who feels the mortgage lenders are pulling a fast one! They legally have to advise you on their inital offer that when your deal expires then your looking at 2-2.50% SVR (yes, that was on the paperwork two years ago). But now that your in the SVR -they move the goal posts. B OF Scot SVR is 4.35 ABOVE B Of E base rate! I think we should all get together and challange this............. what do you think............

You need to understand that there is no direct relationship between BOE base ( or LIBOR either), and the cost of a mortgage to a borrower. Thats unless the terms of the mortgage state that it is.

Banks raise money from depositors to lend. Thats the function of banks. Banks don't borrow money at BOE base rate. One example I can give is that at the 30th June. The average cost of funding across LloydsHBOS's mortgage book was 3.85% far above .5% which is BOE base.

To obtain a better interest rate you need to improve your LTV by repaying your mortgage down quicker. Which in itself reduces the total amount of interest you'll pay. Unfortunately this is the reality of the situation.

As BOE base does increases to more normal levels then its more likely that SVR will return to around 2.5% to 3% above base.

Gorgeous_George

It is so nice that some people's only complaint in life is that SVRs are about 5%-6% tops.

The world must be at peace.

My savings are earning 4.3% before tax - 3.8% above BofE Base Rate. If people wanted a tracker they should have opted for a tracker rather than some short term fix.

Merry Christmas.

GG

_Andy_

bashali wrote: »

Rip off, does any one know if accord mortgage customer will get voting rights on merger ?

What is a rip off?

mystic_trev

If people are moaning now, what'll it be like when IRs start rising next year?

brit1234

mystic_trev wrote: »

If people are moaning now, what'll it be like when IRs start rising next year?

and house prices falling lol

itsakidsworld

I mentioned this months ago. If you are able to obtain a fixed rate mortgage below 5% on ANY mortgage deal take it! It has been a tough journey for everyone of late and that includes banks.

When rates were dropping people were seeing fixed rates offered around the 4% mark. However we are only human(some anyway!!) and so people say lets wait it may go lower? Even now if you are available to get a fixed rate around 5%(may not be possible now though?) for the next ten years take it!! Rates are only going one way and it's not down.

Those of us old enough to remember when we were paying 2-4% above base when base rates were 13% feel like we are lottery winners at the moment! Act now and get your rates fixed if you can at around the 5% mark. When the money train sets of again its only going to gather speed and it will be too late!!!!!

In my opinion a stable economy needs to operate with average mortgage rates around 7.5-8% which provides stability in the economy for savers, import, export, currency. That is where the banks may be looking to stabilise the country and at the moment have their sights firmly on the EU central banks next move.

mark5

Guaranteed to be no more than 2% above the Bank of England base rate is how lloyds TSB describe their SVR on the website!

kriss_boy

_Andy_ wrote: »

Nothing 'badly wrong' about it - the SVRs, unless specifically stated, are just that - variable. If a lender varies the rate there's nothing unethical about that.

This is why I dont understand the concept of a fixed price. You get it fixed at a more competitive rate but knowing when it ends you are at the mercy of the lenders then imposed variable rate?

Wheres the advantage in it? When the fixed period ends cant you just go elsewhere for another competitive fix?

leveller2911

No different than being a saver. Savings rates have been slashed to almost zilch.......I feel for the old girl 4 doors down who relies on the income from her savings to pay her Council tax and heating.