Retrospective interest rate hike

Elinor_197

I've received a letter this morning 24th June from Derbyshire Home loans (subsiduary of Nationwide) saying my mortgage is going up by over £300 (38%) a month from the 1st June, the letter is dated 29th May, I phoned to ask and a very tired sounding voice told me the letter must have been delayed in the post, she did admit having had "quite a few" simular calls. Royal mail assure me a letter delayed that length of time would have to have been wrongly sorted in which case would have marks which my letter does not. Surely they can't do this !

beecher2

Why is it going up? Is it reverting to the SVR after a fixed rate which you would already know about? Letters can and do go missing and turn up with no marks on it.

dimbo61

Even if it was not delayed in the post sending a letter out on the 29 of may to give an increase in your payments from the 1 of June is very poor so write to the chief exec and complain big style ( send it recorded delivery ) so he/she has to sign and mark it urgent!!!

Thrugelmir

Poor customer service sending out notification so late. However you should have been aware of when your current mortgage deal expired. So the change in rate isn't retropspective. As you knew about at this at the time of applying for the deal.

phillsmit3

I am in the same situation as the original post. My fixed rated ended prob over a year ago and have since been on the SVR. however the letter now states the the SVR is increasing in June which increases my interest payment by approx 33%. This seems like a massive jump in the SVR?? The SVR is based on LIBOR.

james3333

!!!!!!?
what were you guys fixed on for it to be going UP NOW? surely the SVR would bring it down, the BoE int rate is at 0.5%!!??

phillsmit3

I have just rung them up. The rate i am paying has increased from 3.25% to 4.32%. I asked why and they said due to LIBOR increasing. I had looked up LIBOR and that has increased by 0.71% from 0.64%. Which is a total joke. Is there anything i can do about this? My mortgage paper work just says the rate will the companies SVR + x%

Thrugelmir

phillsmit3 wrote: »

My mortgage paper work just says the rate will the companies SVR + x%

Lenders can change their SVR as they wish.

4.32% is not an expensive rate and well beneath the average across all lenders.

Your only option is to vote with your feet and move your mortgage to another lender.

james3333

I had never heard of LIBOR before now. this is pretty scary then if they can jutst up the SVR as they like, they could do that to me next month!?!?
i have only just FOR THE FIRST TIME IN 10 years started to benefit from not being locked into a deal (was fixed in at 5.95% with halifax) now on SVR at 3.5% saving me £140 per month.......could this really just be lost at the drop of a hat?

beecher2

james3333 wrote: »

I had never heard of LIBOR before now. this is pretty scary then if they can jutst up the SVR as they like, they could do that to me next month!?!?
i have only just FOR THE FIRST TIME IN 10 years started to benefit from not being locked into a deal (was fixed in at 5.95% with halifax) now on SVR at 3.5% saving me £140 per month.......could this really just be lost at the drop of a hat?

Of course the variable rate can (and will) go up. The 'norm' for Halifax's SVR is closer to 7% though I wouldn't expect it to start rising until the base rates go up. When that will happen is anyone's guess, but it would be wise not to get too used to your 3.5% rate.

Thrugelmir

james3333 wrote: »

I had never heard of LIBOR before now. this is pretty scary then if they can jutst up the SVR as they like, they could do that to me next month!?!?
i have only just FOR THE FIRST TIME IN 10 years started to benefit from not being locked into a deal (was fixed in at 5.95% with halifax) now on SVR at 3.5% saving me £140 per month.......could this really just be lost at the drop of a hat?

Don't concern yourself with LIBOR.

Yes the Halifax could raise its SVR at any time. Market forces control SVR's as lenders need to be broadly competitive in order to win and keep business. However as rates rise and one lender breaks ranks, expect other lenders to follow suit in order to maximise their margins.