Bank of Scotland base rate rise

waterfortigers

I've just got a letter from RBS telling me my fixed rate mortgage will be going up by roughly £100 a month.

They're saying the standard variable rate is going up from 4.84 to 4.95% despite the Bank of England rate staying the same.

At first I couldn't understand why this applied to me as fixed rate customer but I think there's two possibilities.

Firstly, I have missed some payments this year, although I am not currently in arrears. Secondly I have had some charges made on my account for letters, phone calls etc.

On the question and answer sections they mention 3 possible reasons for the increase, one of which it definitely isn't and the other two are: 'Your balance is now higher than the amount you originally borrowed.' Which as I am on a interest only product could be. However, they do say they would only charge interest on the excess, which wouldn't be £100 a month, would it?

The other could be "you were not on SVR but have been making under or overpayments. Then from time to time we re-calculate your future mortgage payments to ensure your mortgage is repaid within the fixed term" But as I say, I don't have any outstanding arrears.

Can anyone help me? I'm really frightened, I just don't have the extra money.

opinions4u

Call them and ask the question.

It doesn't sound right (although you don't state what the current payments / debt stand at).

Additionally, Bank of Scotland is a different bank to RBS.

beecher2

It is BoS rather than RBS - they're two separate banks.
Bank of Scotland are raising their SVR
http://www.bosmortgages.co.uk/answers/
but this will only affect you once your fixed rate comes to an end. It sounds like the extra £100 is to pay back the charges - phone them up and find out though.

plane_boy2000

Not happy about this. I moved onto BoS SVR a few months back as the deals they offered were rubbish, and now the SVR is going up :-(

Have any other lenders upped the SVR or am I just being screwed by them because of their previous poor buisiness acumen?

Thrugelmir

waterfortigers wrote: »

They're saying the standard variable rate is going up from 4.84 to 4.95% despite the Bank of England rate staying the same.

An increased SVR reflects the increased cost of raising deposits by banks. While there is focus on BOE base. This has little bearing on the cost of money on borrowed on wholesale markets nor the rates offered to retail savers for deposits.

opinions4u

Thrugelmir wrote: »

An increased SVR reflects the increased cost of raising deposits by banks. While there is focus on BOE base. This has little bearing on the cost of money on borrowed on wholesale markets nor the rates offered to retail savers for deposits.

Spot on. Not to underestimate the regulatory requirements for banks to hold increased captial linked to the risk of their mortgage book.

plane_boy2000 wrote: »

Not happy about this. I moved onto BoS SVR a few months back as the deals they offered were rubbish, and now the SVR is going up :-(

Remortgage? Ask them if they have any other deals?

Have any other lenders upped the SVR or am I just being screwed by them because of their previous poor buisiness acumen?

Many lenders have increased their SVR in the last couple of years, even though the last BofE rate change was in March 2009. If I recall correctly, for the last few years mortgages sold with the Bank of Scotland brand were predominantly buy-to-let or higher risk near prime residential.