Recuce Mortgage interest PETITION

eddie701

I have just forwarded this email to Jeremy Vine at the BBC. I have posted an online petition

"Last week you had a discussion regarding banks and what they were doing for us in respect of all of the public monies they had recieved. I have put forward a petition e-petition at: epetitions.direct.gov.uk/petitions/18734 for people to affect MP's and how much profiteering the banks can achieve. In short, to put a cap on the mortgage interest rate the banks can place on mrtgage holders. If people are so concerned then vote for the petition. The affect of families having more money at present are obvious. Regards Edward Strickland"

I am petitioning the following….

Reduce the maximum Mortgage lenders can charge over and above the Bank of england base rate to 1%
Responsible department: Her Majesty's Treasury
At present the Bank of England base rate is very low at 0.5%. This rate is what high street banks are charged to borrow overnight from the Bank of England. The high street mortage rate is on average 4%. I suggest a cap of 1% premium on top of the Bank of England rate. This would reduce mortages interest to 1.5% at present. This would have the effect of releasing monies to households and increase consumer demand. Further their would be a reduction in mortage defaults. When a family loses their home it may fall upon the council and the general taxable population to house a family which has lost its home. A reduction in bank mortage rates to 1% would redress the imbalance of interest rates which have occured over the past 3 years.
Hope you can all support this appropriately…….and click and sign the petition.

Thrugelmir

eddie701 wrote: »

Reduce the maximum Mortgage lenders can charge over and above the Bank of england base rate to 1%

On what commercial grounds?

Why should savers be penalised?

You need to understand the mortgage market before firing off.

[Deleted User]

But it mean that banks will stop lending to a significant proportion of customers. And there would be no margin if they did lend, as they're not borrowing at the base rate. And further losses when customers default.

So no mortgages for anyone, basically. Cash only from now on.

DannyboyMidlands

This is a stupid idea. It should not be up to taxpayers to bail out mortgage holders. If they don't like their interest rate then tough, nobody forced them to sign up to it.

I'd go the other way and do away with benefits to "homeowners" such as SMI. Why should potentially low earning taxpayers subsidise the purchase of assets for these people?

ViolaLass

eddie701 wrote: »

At present the Bank of England base rate is very low at 0.5%. This rate is what high street banks are charged to borrow overnight from the Bank of England.

I can assure you that I charge the bank significantly more than that to borrow money from me.

kingstreet

Oh dear.

We get a few BoE trackers in the market and suddenly everyone thinks mortgage lending is a function of base rate.

There's absolutely no allowance made for risk in this scenario. So the 100% borrower with ten defaults gets the same rate as the 50% borrower with the clean credit history?

Where does the money come from to run the lenders? What savings rates are you going to be able to offer to get money in through the front door to lend to borrowers?

Sometimes I think we'd been better off with the closed down ATMs and barter economy we were close to in September 2008 when Halifax was on it's way out of business. It might have opened one or two eyes to our reliance on the financial system, whatever you may think of it.

beecher2

Spelling errors, factual errors, daft idea - surprised you managed to convince one other person to sign to be honest.

eddie701

Couple of points,
Im suggesting 1% on top of the base rate, NOT 1% as the actual rate.
Mortgages are secured against homes, this is how banks mitigate the risk.
My point is that as Rates have dropped for the banks, the rate reductions have NOT been passed onto the general mortgage market.
Banks would not exit the market with a1% premium, 3 years ago, this was the premium they earned.
As far as the taxpayers bailing out mortgage holders, I dont think the subsidising of banks which commoditized risky mortages which defaulted has been considered.

ViolaLass

eddie701 wrote: »

Banks would not exit the market with a1% premium, 3 years ago, this was the premium they earned.

And look where that got us...

Thrugelmir

eddie701 wrote: »

My point is that as Rates have dropped for the banks,

What rates have dropped?

DannyboyMidlands

eddie701 wrote: »

As far as the taxpayers bailing out mortgage holders, I dont think the subsidising of banks which commoditized risky mortages which defaulted has been considered.

Yes, taxpayers have bailed out the banks but that doesn't mean it should be open season for them to bail out everybody.

You seem to be under the impression that all taxpayers are mortgage holders when, in fact, they aren't.