interest rate rip off

The_White_Horse

when the interest rate was 4.5% i got a 5yr fix on 5.29% - 0.79% above base.

Now the best 5yr fix is 3.99% or thereabouts which is 3.49% above base.

I know banks want to increase their reserves, but this is ridiculous.

!!!!!! is going on here??????

daveyjp

Thanks for the laugh at lunchtime.

It's called the free market, which looking at your sig you are all in favour of! Or are you one of these free market fans who only likes it when it appears to be offering a good deal?

The_White_Horse

i am just surprised that no bank or building society at all is prepared to undercut these massive rates.

its like Morrisons, Sainsbury's and ASDA all charging 5 quid for a loaf of bread. You can bet Tesco would be selling it for 50p within a week. That is the free market. What we have here seems to be a cartel who have all agreed to keep rates offered to the public massively high compared to the base rate.

Generali

daveyjp wrote: »

Thanks for the laugh at lunchtime.

It's called the free market, which looking at your sig you are all in favour of! Or are you one of these free market fans who only likes it when it appears to be offering a good deal?

Free market my rrrrr.

The Corporatist system in place in the UK and much of the rest of the West means that in the UK most of the mortgages are written by 6 banks.

There's hardly any competition and it's virtually impossible to set up a competitor so the banks are making out like bandits.

Necessary conditions of capitalism is that failing companies fail and that competitor companies can be set up reasonably easily. Neither applies in the UK banking market. No new banking licences were issued in the 20th Century and 1 has been in the 21st if memory serves.

bendix

The_White_Horse wrote: »

when the interest rate was 4.5% i got a 5yr fix on 5.29% - 0.79% above base.

Now the best 5yr fix is 3.99% or thereabouts which is 3.49% above base.

I know banks want to increase their reserves, but this is ridiculous.

!!!!!! is going on here??????

A very disappointing post WH. You are usually sound philosophically, but it seems you're only a free market libertarian when it suits you.

It is obvious why the you got the rates then, and cant get them now. Back then, rates were falling. Ergo it was in the Banks's interests to have long term fixes likely to be ABOVE the base rate.

Now the rates are on the upward spiral, so banks are reluctant to fix at low rates for long periods.

It's good business sense.

As a capitalist, the answer is simple. What you miss out on re your mortgage, I suggest you buy shares in the bank to take advantage of the profit windfall.

And stop whining. It's pathetic, particularly coming from you.

WHITEVANMAN

The_White_Horse wrote: »

when the interest rate was 4.5% i got a 5yr fix on 5.29% - 0.79% above base.

Now the best 5yr fix is 3.99% or thereabouts which is 3.49% above base.

I know banks want to increase their reserves, but this is ridiculous.

!!!!!! is going on here??????

No more easy money, the likelyhood of higher base rates in the next 5 years and many many other factors, also they know you need to swap down to a new lower rate if you want to keep costs down.

I mean, would you want to lend me a £150000 for just 1.29% apr with the chance that interest rates could easily be 4% + in the next 5 years?

daveyjp

"i am just surprised that no bank or building society at all is prepared to undercut these massive rates."

Mortgages are no different to fuel prices. Why don't BP suddenly offer fuel at 10p a litre less than everyone else?

WHITEVANMAN

The_White_Horse wrote: »

i am just surprised that no bank or building society at all is prepared to undercut these massive rates.

its like Morrisons, Sainsbury's and ASDA all charging 5 quid for a loaf of bread. You can bet Tesco would be selling it for 50p within a week. That is the free market. What we have here seems to be a cartel who have all agreed to keep rates offered to the public massively high compared to the base rate.

Tesco's would be selling it to you at a loss, and reaping profits on all the bigger sales they manged to trick you into buying

Loughton_Monkey

This is all easily solved.

Let's get up a petition, and insist that banks revert to paying us savers about 0.75% below base. In other words, we all agree to pay them 0.25% for the privilege of letting them look after our life savings.

Then with any luck, they might think about reducing mortgage rates to nearer your requirements.

Even better. Santander could do a new 3 year bond e-Bond. Put in £1,000. Get £970 back after 3 years. Assume you would be at the front of the queue?

michaels

The level of financial illiteracy on this board still manages to surprise me sometimes.

Conrad

Whitehorse, to be rational you have to see an argument from all sides, not simply the side that happens to dovetail with your needs.