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MSE News: Mortgage blow as building society hikes SVR

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  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    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?

    LIBOR doesn't reflect mortgage lending either. LIBOR is an interbank lending rate.

    Don't be surprised to see other lenders progressively raise their interest rates if low BOE base continues. Lending rates nearer 3.5% - 5% are the commercial reality.
  • baby_boomer
    baby_boomer Posts: 3,883 Forumite
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    PhylPho wrote: »
    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
    The rate was actually 6.5%

    When societies & banks offer fixed rate products, they always offload the risk with fixed rate financial instruments which make them money if interest rates go the wrong way.

    So I don't accept your analysis that this offer has been part of Skipton's current problems.
  • hes109
    hes109 Posts: 8 Forumite
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    I am a Skipton mortgage customer currently on a 2 year fixed deal at 5.79% fixed until August 2010. I, like many, was looking forward to a reduction in my mortage repayments at the end of my deal and still might.

    I have read all the posts in this thread to gather other people's points of view and figure out whether I am annoyed at this decision or whether I understand. I remain 50 - 50 at the moment. If Skipton was a bank I'd be annoyed as I'd imagine my money was being spent on bonuses, but that's another story.

    The thing or things about this decision that really annoy me and I can't grasp is that when looking at my mortgage offer again, it clearly states in one sentence that Skipton 'guarantee' not to raise the SVR by more than 3 % above BoE rate yet in the next paragraph it says it can remove the ceiling in these 'exceptional circumstances'. Is a guarantee not a guarantee? Also, I can't say I wasn't aware of this situation as it's there in black and white on my mortgage offer, but if these 'exceptional circumstances' have only just been defined, then technically anything about my mortgage could be changed, couldn't it? I know that's to the extreme I'm just portraying it literally. Part of me feels we accepted a mortgage offer without the full facts. I also don't understand the 1.45% increase when most others have only raised theirs by 0.5%.

    Whatever happens next, we do not regret our mortage offer and cannot fault Skipton in their service to my husband and I. It was the best at the time (ie affordable, less risk) to get onto the housing market and time will tell if we stay with Skipton at the end of our deal.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    hes109 wrote: »
    I have read all the posts in this thread to gather other people's points of view and figure out whether I am annoyed at this decision or whether I understand. I remain 50 - 50 at the moment. If Skipton was a bank I'd be annoyed as I'd imagine my money was being spent on bonuses, but that's another story.

    The Skipton BS is unable to raise sufficent money (at a low enough cost) to fund the money it has lent. There is competition in the market for depositors money.

    So the Skipton has made a commercial decision to allow unprofitable business to leave.

    Once the "books" are balanced and market interest rates correct, then normality will return.
  • hes109
    hes109 Posts: 8 Forumite
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    Thrugelmir wrote: »
    The Skipton BS is unable to raise sufficent money (at a low enough cost) to fund the money it has lent. There is competition in the market for depositors money.

    So the Skipton has made a commercial decision to allow unprofitable business to leave.

    Once the "books" are balanced and market interest rates correct, then normality will return.

    I think if I put my business hat on I do understand and agree entirely with this reply.

    I, like others, always knew that taking out a fixed rate means accepting the SVR rates, whatever they may be, at the end of the deal. If we don't like them then we just change. Simple.

    I know one thing for sure, I would not like to be a customer of a financial insitution that did not adequately put measures in place to secure its future.
  • de1amo
    de1amo Posts: 3,401 Forumite
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    i saw someone say there was 10 troubled buildings societies -which ones are they --how is the brittania fairing?
    mfw'11 No68- 55k mortgage İO--little to nothing saved! i must do better.
  • brit1234
    brit1234 Posts: 5,385 Forumite
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    de1amo wrote: »
    i saw someone say there was 10 troubled buildings societies -which ones are they --how is the brittania fairing?

    Unsure, but this economic mess is far from over. In the US banks are still going under at a fast rate with the property bankrupties.

    I would expect the is a lot of stuff behind the scenes going on with the BOE and government trying to help them out fearing another Preston expose
    :exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.

    Save our Savers
  • mystic_trev
    mystic_trev Posts: 5,430 Forumite
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    Nationwide is to increase the SVR on residential and self-cert mortgages with The Mortgage Works and increase the SVR for some UCB Homeloans customers.

    From February 1 borrowers on residential and self-cert mortgages with TMW will see their SVR rise by 0.5%.
    Buy-to-let borrowers with UCB Homeloans will also see their SVR increase by 0.3%.

    Nationwide operates a range of SVRs on products taken out through its specialist lending arms TMW and UCB Homeloans depending on when products were taken out.

    http://www.mortgagestrategy.co.uk/nationwide-hikes-svrs-on-specialist-products/1005546.article
  • [Deleted User]
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    de1amo wrote: »
    i saw someone say there was 10 troubled buildings societies -which ones are they --how is the brittania fairing?
    Britannia no longer exists as a building society. It was taken over by the Co-operative Bank. I think that the combined health of the new entity is fine though.
  • de1amo
    de1amo Posts: 3,401 Forumite
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    so long since i saw my mortgage statement--and out of touch i am---now to decide whether to chuck money at my svr or invest it abroad--i agree its a stinking mess-i have read american publications online who forcast this fall of capitalisation going back 4 years--it projected the debt crisis and its affect on the world--my brother who sent them to me is now cash very rich and property poor--he is gloating and i am sobbing!!
    mfw'11 No68- 55k mortgage İO--little to nothing saved! i must do better.
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