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MSE News: Mortgage blow as building society hikes SVR

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  • Gorgeous_George
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    You may wish to look at May 1988 to October 1989 here.

    7.38% to 14.88% under a Tory Government. And they'd been in for 9 years and hadn't suffered the worst world financial meltdown ever.

    GG
    There are 10 types of people in this world. Those who understand binary and those that don't.
  • ILW
    ILW Posts: 18,333 Forumite
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    poppy10 wrote: »
    It's he, not she, and yes, I was talking about IO mortgages, which have become more and more common - just have a read of the mortgage board on this forum. So many people would have defaulted on their mortgages by now if it hadn't been for the breathing space afforded by being able to go onto the ultra-low SVR. All that is over now.

    You can argue that people should have budgeted for higher rates, but not many people would have expected such a huge rise in one fell swoop. Imagine other borrowers having an equivalent hike - what if the BoE had suddenly put up the base rate by 145 basis points this month? How many people would have been able to cough up the extra money straight away? With the employment situation deteriorating, many people are just scraping by as it is.

    Anyone who is struggling to pay 5% IO at the moment and into the medium term, cannot afford the house they have bought.
  • dasilva_2
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    You may wish to look at May 1988 to October 1989

    7.38% to 14.88% under a Tory Government. And they'd been in for 9 years and hadn't suffered the worst world financial meltdown ever.

    GG

    Yes but then the average house price was not £170000 so mortgages generally as a percentage of average income were less. Also people have managed to keep their heads above water as all the essentials, utilities, food, tax have increased so dramatically by the fact that mortgage payments have come down. No is the time when the s*** will hit the fan.

    On another note if you read the Skipton website it states 'The circumstances currently prevailing are exceptional under each of two seperate tests, which have recently been defined by the Society's board as follows:'

    One of these is the fact that BOE rates are less than 2.7%. The definition of exceptional is 'uncommon'. How can the interest rate be uncommon to be less than 2.7% when it has been since dec 2008?
  • Noble_Savage
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    dasilva wrote: »
    How can the interest rate be uncommon to be less than 2.7% when it has been since dec 2008?

    How about "Rates are below 2.7% and have been so for over twelve months. This has never happened before."

    Uncommon enough for you?
  • dasilva_2
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    How about "Rates are below 2.7% and have been so for over twelve months. This has never happened before."

    Uncommon enough for you?

    But does it state that on their own website?
    No!
    If you are going to quote an exceptional circumstance then surely it has to be exceptional. They have defined exceptional as 'a rate of less than 2.7%'. No timescale involved.
    In their own words.
  • Noble_Savage
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    dasilva wrote: »
    But does it state that on their own website?
    No!
    If you are going to quote an exceptional circumstance then surely it has to be exceptional. They have defined exceptional as 'a rate of less than 2.7%'. No timescale involved.
    In their own words.

    You're going to expect them to define 'unforeseen circumstances' next, aren't you? ;)

    What we're seeing now is exceptional. Many of us can remember rates of 14-15%. Happy days. Be in no doubt, against that backdrop the current level of base rate is unusual. Probably something they could cope with in the short term. But when it gets to be this level, for this length of time, it's pretty safe to call it exceptional.
  • dasilva_2
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    Noble Savage.
    Have you looked at their website. Their definition of exceptional circumstances is 'BOE rate is less than 2.7%' No mention of for how long, no mention of where 2.7% has come from, nothing. Just that BOE rates are less than 2.7%. This has according to their website been 'recently defined by their board of directors as being exceptional'
    Had their board of directors defined exceptional as being 'less than 2.7% for in excess of 12 months' I would have no argument.
    What I am saying is that to define a rate of 2.7% or less as being exceptional when it has been for 14 months is the wrong reason as it is no longer exceptional. It is the norm and has been for 14 months.
  • beecher2
    beecher2 Posts: 3,677 Forumite
    First Post First Anniversary Combo Breaker
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    LOL - 2.7% isn't the 'norm'! Talk about clutching at straws.
  • Noble_Savage
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    dasilva - if you believe the rates we're seeing are "the norm" then there's not really much else I can say to you.
  • dasilva_2
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    beecher2 wrote: »
    LOL - 2.7% isn't the 'norm'! Talk about clutching at straws.

    So where does the 2.7% come from?
    It is just an arbitrary figure not quoted by them at any time before.
    Is it in their mortgage contract?
    I am not saying they are right or wrong in putting up their rate, I am saying they are not stating the correct reasons for their decision. I would have thought they would at least be correct in their statements.
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