MSE News: Mortgage blow as building society hikes SVR

VIGILANT22

[QUOTE=marchstar;29097323]I have a rip off mortgage with GE money at about 8 per cent. Im tied in until march 09 when the rate is supposed to revert to 2.95 per cent above the base rate. I was counting on this much lower rate but after reading that some lenders are increasing their variable rates I am wondering can GE money do this. I am hoping they can not as the agreement was 2.95 above the base rate but I also know what rip off merchants they are. Does anyone have any ideas / suggestions on if they can do this. Thanks so much,[/QUOTE]


Above whose/which base rate?

starsailor123uk

Nationwide now remains the only mutual with a stupid mortgage policy that disadvantages its other members. We are talking about ordinary Nationwide savers losing £1/2bn last year and for years to come, since why would these lucky people ever remortgage elsewhere . These are numbers we usually associate with governments rather than building societies.

Nationwide already disadvantage members differently

I have a mortgage and savings so see both sides of the argument. have also been a member for over 10 years but am treated as a second class member as the large profits made each by nationwide ( they are not making losses!) are building a balance for some member who happened to be a member before an arbitrary date.

Nationwide don't see it as an issue at the moment and maybe that's becuase they took action at an earlier stage for new mortgage customers.

If the fixed rates on offer were most reflective of the base rate ( remember buidling societies are meant primarily to be funded by its own members (savers and borrowers) then maybe it would not be an issue.

Pincher

starsailor123uk wrote: »

If the fixed rates on offer were most reflective of the base rate ( remember building societies are meant primarily to be funded by its own members (savers and borrowers) then maybe it would not be an issue.

If you wanted the fixed rate mortgage to reflect the current 0.5% BOE, so you get a 3.0% 3 Year Fixed, they would have to sell the 3 Year e-Bond for around 2.5%: is that what you meant? The fixed rate has to reflect the expected rate movement over the entire 3 year period, otherwise nobody will buy the e-Bond.

baby_boomer

Pincher wrote: »

I have a lump sum earning 6.1% p.a. in a 3 Year Fixed rate ISA since October 2008 with Nationwide.
I have a BOE+1.75% (=2.25% paying rate) mortgage elsewhere, even lower than the Nationwide 2.5% SVR.
So I am a Saver with Nationwide.

You can get a 3 year e-Bond that pays 4.5~4.7% right now.

Sub-Prime? Thank goodness Nationwide didn't get into all that non-sense

All fine & dandy for you (although my ISA rate is higher than yours ).

But Nationwide's own figures suggest that its mortgage promise is costing its average member £30+ pa.

No-one - apart from perhaps you and the incredibly lucky mortgage holders in receipt of their humungous annual windfall, courtesy of other members' unwitting largesse - could possibly be happy with that.

It's a permanent millstone around the neck of a cherished national institution that needs to be removed ASAP if it is to compete properly with our banks. The board is just lacking in the cojones department. If pushed harder by its members, Nationwide could give banks the competition that MSE members deserve.

Pincher

baby_boomer wrote: »

All well and good. But Nationwide's own figures suggest that its mortgage promise is costing its average member £30+ pa.

No-one - apart from you and the incredibly lucky mortgage windfall tribe - could be happy with that.

I'm a rate tart like everybody else. But when the crunch came, I prefer to keep my money with Nationwide.

I am very glad I had my money with a dependable Society that keeps its promises, and not with a profit chasing outfit that folded during the credit crunch, of which there were so many.

Maybe you are just sulking because you missed the boat on the 2.5% SVR. You have to learn to feel The Money Saving Force: search within yourself, Luke, let The force guide you.:)

baby_boomer

Pincher wrote: »

Maybe you are just sulking because you missed the boat on the 2.5% SVR.

Oh please. You're clutching at straws. Why would I be be mortgaged in a declining housing market?

[Deleted User]

Pincher wrote: »

I am very glad I had my money with a dependable Society that keeps its promises, and not with a profit chasing outfit that folded during the credit crunch, of which there were so many.

I agree that NW should keep it's promises if it can. Just think of the uproar if the shoe was on the other foot and they were able to reduce the rate on their fixed rate bonds quoting "exceptional circumstances"!

Pincher

baby_boomer wrote: »

Oh please. You're clutching at straws. Why would I be be mortgaged in a declining housing market?

To have somewhere to live?

PhylPho

Skipton has not been the brightest apple in the barrel for some time. When things were going down the pan finance-wise it launched a 7% tax free cash ISA running from June 2008 to December 2009. It also allowed transfers-in. It tried hastily to recover itself from forking out that level of interest to savers at a time when savers were getting nothing like that rate of return, we were amongst several (as it turned out) whose transfer-in paperwork was somehow "lost" by the society in the brief period before it shut down the transfer facility. Skipton chased income seemingly regardless of consequence, good news for those who benefited, not good news for Skipton long-term. It's hardly surprising then that Skipton is prepared to court "bad publicity" now. It seems not to have much alternative.

sly_dog_jonah

On this page Skipton state that they will bring back the BoE+3% guarantee on their SVR, but only when both 'exceptional circumstances' end.

As a minimum BoE will have to be >2.7% to achieve this (and the second test would have to pass), which means at or above 2.75% (since BoE only moves in 25 basis points or more), which means BoE+3% will be 5.75%. How very kind of Skipton. I doubt many of their mortgage customers on SVR will be still with them by then, looks to me like an attempt to downsize their mortgage book.

My wife fixed with the Skipton for 5 (and a bit) years at 5.14% in August 2006 when BoE was at 4.75% and Skipton's SVR was 5.89% (a 1.14% margin over base rate). When that expires in 18 months time (October 2011), the margin over BoE is likely to be a minimum 2.05% (4.95% - 2.7%) but much more likely well in excess of 3% if Skipton have raised their SVR in line with any increases in BoE rates. From 1st March the SVR current premium over BoE will be 4.45%.

My wife (and I) are lucky in that we have considerable equity and now our combined savings to throw at the mortgage come the end of the fix (in fact we are overpaying each month to save 5.14% tax free). I despair for those who have no way out if their LTV no longer gives them access to better deals than Skipton's SVR, and whose contract stated the 3% BoE guarantee.

Yes I know the BoE rates don't reflect LIBOR rates used for mortgage funding, but that being the case then why did the Skipton provide this BoE+3% guarantee in the past then?