Evidence of my repayment plan

Thrugelmir

Brodiebobs wrote: »

I understand the background of it, but if they were wanting people to do this why wack a healthy dollop of interest on top?

Because during the credit boom to offer sub base +2% mortgages. Banks cross subsidised products. So made vast sums from selling PPI for example.
The legacy now is that they have a huge number of what are unprofitable customers on their books. So any way of moving them onto new contractual terms has an obvious attraction.

The Icelandic bail out levy instigated by the FSA has added approximately a .25% cost to all new mortgage from a lenders perspective.

So the result if retail and investment banking is split. As soon are suggesting. May result in higher cost of a mortgage to the consumer.