Two more building societies increase interest rates

StevieJ

Thrugelmir wrote: »

I've seen little competition to lend money as cheap rates as many seem to believe would be the case. Totally the opposite in fact. What's happening is totally predictable. Lending rates are bearing less and less relevance to BOE base.

Until BR goes up.

nicko33

Harry_Powell wrote: »

There have been some lucky sods who managed to get BoE tracker rates at 0.5% etc, but I can assure that anyone who has been buying over the last 18 months are paying 'normal' 5% and 6% rates. I know I am.

sub 3% trackers and fixed were still available less than 12 months ago, at 80% LTV.
I ended up with a BOE+1.89 tracker, but if I'd seen my house 2 months earlier I could have got BOE+0.89 (first direct)

Thrugelmir

chucky wrote: »

absolutely - why would any lender lower their rates when there is a borrowing appetite to lend at a high margin of profit from anything between 2.5% to 4%.

the reference to overstated and exaggerated is directed at the number of people that it affects.

High profit margin? Then you understand far less than I thought.

chucky

Thrugelmir wrote: »

High profit margin? Then you understand far less than I thought.

really??? could you explain your post below then??

Thrugelmir wrote: »

I've seen little competition to lend money as cheap rates as many seem to believe would be the case. Totally the opposite in fact. What's happening is totally predictable. Lending rates are bearing less and less relevance to BOE base.

if they have little do with BOE they must be related to LIBOR or even the savings that they have on deposit if it's an SVR.

and what is the margin between Libor and these SVR's at the moment...... 4% is a nice margin.... :eek:

mystic_trev

I think we'll see a fair more BS raising SVR's in the next few weeks.

Savers withdrew £7.6bn from the country's 52 societies in 2009 because of record low interest rates and fierce competition from the banks. The collapse in wholesale market funding exacerbated matters. Societies lost another £22.6bn as local authorities withdrew about £6bn of cash and other money market credit lines were not rolled over.

The £30.2bn contraction in funding, revealed by the Building Societies Association (BSA), was the most severe on record. As a result, societies have had to remove credit from other areas of operation as well.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/7130790/Building-societes-hit-by-record-cash-crisis.html

Societies are having to offer high rates of interest to attract savings, and consequently mortgage rates are rising.

Harry_Powell

nicko33 wrote: »

sub 3% trackers and fixed were still available less than 12 months ago, at 80% LTV.
I ended up with a BOE+1.89 tracker, but if I'd seen my house 2 months earlier I could have got BOE+0.89 (first direct)

Unfortunately, I couldn't spring to a 20% deposit.

nesssie1702

It was across its specialist lending division that Nationwide put up the Std Variable Rate last week

"Nationwide Building Society announced plans to raise standard variable rates (SVR) across its specialist lending divisions. Homeowners with residential, buy-to-let or self-cert deals from either The Mortgage Works or UCB Homeloans will see their SVR jump by up to half a point from February 1"

The Times article quoted by the OP states

"Borrowers with a mortgage from Nationwide Building Society benefit from one of the lowest SVRs on the market. A clause in the small print of mortgage contracts issued before April last year means that the rate can be only 2 percentage points higher than the base rate, giving a current pay rate of 2.5 per cent. Around half a million customers are thought to be sitting on the low SVR."

Charterhouse

Harry_Powell wrote: »

Why people on here think we'll have armageddon when interest rates rise is beyond me. Most established mortgage holders bought when mortgage rates were around the 5% - 6% mark and so it will be no shock to their finances whem we return to those levels. Most FTBers who bought post crash have already got mortgage rates at 5% - 6% and these will largely remain unchanged by BoE rises.

If people are banking on a second crash caused by a rise in the BoE rate, they're going to be sorely disappointed.

I'm not sure about armageddon by any means but I'm pretty sure that a LOT of the pain in the household sector and the job market has been hugely eased by the prevalence of lower mortgage interest rates and the fact that a lot of people on "old" SVRs have lucked out. We shall see who is right when interest rates start to rise but I for one am expecting at least some pain and a little bit of a roll-over in house prices.

Thrugelmir

chucky wrote: »

really??? could you explain your post below then??

if they have little do with BOE they must be related to LIBOR or even the savings that they have on deposit if it's an SVR.

and what is the margin between Libor and these SVR's at the moment...... 4% is a nice margin.... :eek:

Banks don't fund mortgages on overnight LIBOR.

LIBOR is the overnight inter bank lending rate. Not a commercial lending rate or facility.

Do you know the purpose of LIBOR?

chucky

Thrugelmir wrote: »

Banks don't fund mortgages on overnight LIBOR.

LIBOR is the overnight inter bank lending rate. Not a commercial lending rate or facility.

Do you know the purpose of LIBOR?

who mentioned overnight Libor?

did you not know that Libor goes out to 12 months?

obviously not