MSE News: Mortgage blow as building society hikes SVR

babycakes023

dasilva wrote: »

I am sure that the Skipton would not take the same view of a borrower 'amending' the agreement if that borrower was 'unable to honour it's guarantee'.
Regarding moving to another lender, why should you if you signed an agreement and more importantly what would be the point of signing another agreement with another lender if as it appears that lender is able to amend one of the major selling points of it's agreements so easily.
As someone mentioned earlier, investors in a bond paying a guaranteed rate over a number of years would be up in arms if issuer decided to not pay that rate because BOE rate has been too low for too long.
The whole idea of a guarantee is that it is just that, a guarantee.

I am also with skipton, they have given me 90 days to get out of my mortgage without incurring the 3% penalty because they have amended the terms - this is my point - it is highly unlikely that i will be able to sell in 90 days, although I am trying, I now have less than 3% deposit in my house & I was made redundant so we are unable to remortgage with another lender because we no longer have the income to support that size mortgage. If i were to sell outside those 90 days skipton will port my portable mortgage but now want 85% ltv, when i took the mortgage it was 90%. I want to borrow less than 50% of what i currently have. I really feel that as they have changed terms then there should be no 90 days, it should just be when we sell

Pincher

I think people have to remember the ancient status quo of tenant farmers getting thrown out when the landlord raises the rent. Rise above the illusion of the Land Registry entry with your name on it: the lender is the master, and you are the serf. The laws of most countries are designed to protect property rights, i.e. the lender's money. Without some legal restraint, the serf is totally at the mercy of the landlord.

It the BOE goes to 10%, which is not impossible in the near future, is the Skipton going to listen to your plea of "exceptional circumstances"?

Japan is a G7 (or is it G10 these days?) country, and has been at near zero base rate for 15+ years, but we had it for one year, so it's "exceptional"? When they offered the mortgages two, three and five years ago, they never heard of Japan, I suppose? There is nothing exceptional about going out of business when you make promises you cannot keep.

Alistair Darling will no doubt do a cost/benefit analysis, to decide how much it will cost the tax payer in these two options:

A) Bail out, and haemorrhage money on mortgages
Compensation to savers due to bankruptcy.

dasilva_2

Incidentally the two skipton tests are as follows.
'1. Base Rate is less than or equal to 2.7%;'
It has been since dec 2008.
'2. Base Rate minus the UK average Branch Instant Access savings rate (as published monthly by the Bank of England) is less than or equal to 2.5% for each of the three preceding months'
This has been since oct 2008 so the qualifying time would be 3 months after.
It would be interesting to know how many mortgages have been given by the skipton since the beginning of 2009 and wether those customers were told that there were already exceptional circumstances which would prevent the skipton from honouring their 'guarantee'.

elephant32

There is now a petition on the No.10 website about the skipton and the wider problem of SVRs that can be varied on the whims of the lender.

Visit the number 10 petitions website and search for "Skipton"

Tell your friends - or anyone who is fed up being pushed around by banks.

VIGILANT22

Pay back the amount you have borrowed .........easy solution

elephant32

Pay back the amount you have borrowed .........easy solution

Thankyou for your oh so helpful reply made with absolutely no knowledge of my financial situation. Why would I have a mortgage if I could just pay it back whenever I liked?

The point is that Skipton have entered into a contractual promise, but when they discovered their contract didn`t allow them to make enough $$profit$$ out of their customers, they unilaterally changed the terms and broke the promise. Most companies wouldn't dare, but bankers STILL seem to think they are above the law (the unfair terms in consumer contracts law in this case).

Because the government intervened in banking in such a big way, there is no longer a free and competitive marketplace for mortgages (especially if you are self employed, investing, self-building, etc.). If the skipton did business on thin margins, it should be required to live within its means, (or go under if it cannot) rather than be allowed to reach into the pockets of its customers.

beecher2

elephant32 wrote: »

There is now a petition on the No.10 website about the skipton and the wider problem of SVRs that can be varied on the whims of the lender.

Visit the number 10 petitions website and search for "Skipton"

Tell your friends - or anyone who is fed up being pushed around by banks.

The clue's in the V for variable. If people want to know what they're going to be paying, they need a fixed rate.

Reflect on your post from the point of view of a saver, rather than a borrower. You will perhaps see things differently if you do so.

elephant32

beecher2 wrote: »

The clue's in the V for variable. If people want to know what they're going to be paying, they need a fixed rate.

Reflect on your post from the point of view of a saver, rather than a borrower. You will perhaps see things differently if you do so.

I do appreciate that the rate is variable, but in the case of the skipton, there was an explicit statement that the Variable rate would not be more than 3% over Bank of England Base Rate.

In the more general case, lenders move their SVRs up and down roughly in line with bank base rate, and also taking the wider market into account. Unfortunately the government has broken the marketplace by its interventions, so there is no longer any real competition (the gap between lending and savings rates had widened considerably over the last 18 months), allowing banks to make bigger profits.

If the skipton is allowed to do this, then other banks will be falling over themselves to follow.....leading eventually to the bank base rate becoming an irrelevance to the mortgage market, and hence the wider economy.

Skipton have not shown any sign that they will pass the full 1.45% rise in income from borrowings on to savers in their savings rates, so why is this such great news for savers? The only real beneficiaries are the banks.....who got us all into the problem in the first place.

Thrugelmir

elephant32 wrote: »

I do appreciate that the rate is variable, but in the case of the skipton, there was an explicit statement that the Variable rate would not be more than 3% over Bank of England Base Rate.

In the more general case, lenders move their SVRs up and down roughly in line with bank base rate, and also taking the wider market into account. Unfortunately the government has broken the marketplace by its interventions, so there is no longer any real competition (the gap between lending and savings rates had widened considerably over the last 18 months), allowing banks to make bigger profits.

If the skipton is allowed to do this, then other banks will be falling over themselves to follow.....leading eventually to the bank base rate becoming an irrelevance to the mortgage market, and hence the wider economy.

Skipton have not shown any sign that they will pass the full 1.45% rise in income from borrowings on to savers in their savings rates, so why is this such great news for savers? The only real beneficiaries are the banks.....who got us all into the problem in the first place.

Without Government intervention interest rates would be far higher.

Blame the Government, blame the bankers, but also people have to take personal responsibility as well.

dasilva_2

Thrugelmir 'Without Government intervention interest rates would be far higher.

Blame the Government, blame the bankers, but also people have to take personal responsibility as well.'

So some people take a responsible decision to go for a guaranteed capped rate assuming that a respectable established mutual organisation may actual keep to their guarantee.
Unfortunately that respectable established mutual organisation now appears to have not been mutually responsible by making business decisions and predictions that would have led us mere mortals to the office of the official receiver.
But wait, it doesn't matter because they can invoke 'exceptional' clauses and get their members to bail them out. Respectability? In a greed led society, thats just a hinderance, so out of the window it can go.