interest rate future

de1amo

İ am new to this site and therefore maybe asking naive questions!
İ have read lots of links concerning interest rates and am right in concluding that there is a fundamental anomily in the system.
İ have 2 interest only mortgages on 1 property with the same lender-i took them in 2005 and 2006 and both have reverted to svr at only 2pc apr- i gather from what i have read most people seem to be on about 5pc mortgages--will this gap ever close?

beecher2

Well put it this way, your SVR can only go up and won't stay at 2% forever. 5% is roughly the 'norm' for base rates, but the SVR 'norm' must be more like 6% or 7%.

de1amo

yes but what happens when mine goes up to 6pc will the people currently on 5 or 6pc be rise to 10 or 11pc-will the anomily continue--people talk on here as norm of 5pc on trackers and discounted rates--these too go up with rate increases! a svr is a tracker of the base rate!!

_Andy_

SVRs are not trackers

Wutang_2

de1amo wrote: »

yes but what happens when mine goes up to 6pc will the people currently on 5 or 6pc be rise to 10 or 11pc-will the anomily continue--people talk on here as norm of 5pc on trackers and discounted rates--these too go up with rate increases! a svr is a tracker of the base rate!!

Sorry about this but - what are you on about??

de1amo

when the base rate rises 1pc my building society will raise my standard variable rate mortgage by 1pc to 3pc and there after as the base rate climbs--is this not tracking

bunkerboy31

Good point!

inspector_monkfish

09:36 21Jan10 - GBP/USD: Extends South After UK M4 Money Supply Shock

London, January 21.

Cable has fallen to a fresh 8-day low of 1.6162 on the back of the disclosure
that UK M4 broad money supply fell by 1.1% last month. A 0.9% increase was
expected, to follow a 0.1% rise in November. The disappointing number is bad newsfor hawks calling for a Spring/Summer Bank Rate hike. Bank Rate has been at 0.5%since last March.

inspector_monkfish

http://forums.moneysavingexpert.com/showthread.html?t=2217341

beecher2

de1amo wrote: »

when the base rate rises 1pc my building society will raise my standard variable rate mortgage by 1pc to 3pc and there after as the base rate climbs--is this not tracking

No, it isn't tracking.

Someone might have a product of base rate plus 1% and someone else will have a tracker of base rate plus 3%. Obviously the first person will have a lower rate than the second, whatever happens to base rates.

I doubt that 5% is the 'norm' for trackers at the moment, and haven't read any comments which says so.

I think you should worry about your own mortgage, and not be too concerned over deals other people have.