Lloyds TSB standard variable rate question

gazpacho_uk

Hi,

I have a Lloyds TSB mortgage which was taken out prior to 2010. When our tracker ended last year we had the opportunity to go on to their standard variable rate and because we were customers prior to 2010, the rate was/is guaranteed not to go above 2% higher than the bank of England base rate.
After reading the comments of Mervin King today (02/12/11), I am concerned that I do not have the safety blanket of a tracker or fixed rate mortgage.
If Lloyds TSB cannot go back on their guarantee, I guess I would be safe until those base rates rise, which seems to be quite some time off, so I could be OK.
My question is, can or could Lloyds TSB rescind that guarantee by giving a period of notice and change the terms ?

sw67

I was told the 2% above base is for the term of the mortgage. You can also port it to another property if you want to move. I have all the quotes and figures in writing but in the end decided not to move

I wouldnt worry about it

Thrugelmir

If you leave the SVR and take another product product. You will default onto the new SVR rate of 3.49% at the end of the term.

So don't be hasty in jumping ship. As 2% above base is a fair interest rate.

gazpacho_uk

After the tracker I went onto the SVR rate and remain there because of the info I had found here about the 2% above base rate guarantee. My concern was/is, if Lloyds TSB could somehow take away that guarantee, I would be looking for a deal which would be a lot less generous.
If I can be sure the SVR guarantee will remain for the duration of the rest of my mortgage (around two years) and assuming the bank base rate does not rise too much, I should be able to come to the end of my mortgage term quite comfortably without any worry of it rising too much.

HAMISH_MCTAVISH

gazpacho_uk wrote: »

My question is, can or could Lloyds TSB rescind that guarantee by giving a period of notice and change the terms ?

No.

That rate is contractual and LLoyds cannot change it.

And as that SVR rate is equivalent to the best trackers today, it would be daft to move or take another deal with Lloyds that would then revert to a higher SVR.

gazpacho_uk

HAMISH_MCTAVISH wrote: »

No.

That rate is contractual and LLoyds cannot change it.

And as that SVR rate is equivalent to the best trackers today, it would be daft to move or take another deal with Lloyds that would then revert to a higher SVR.

Cheers, that is exactly what I wanted to read Hamish McT !

Thrugelmir

HAMISH_MCTAVISH wrote: »

That rate is contractual and LLoyds cannot change it.

The Skipton Building Society invoked the exceptional circumstances clause in 2010 to remove their guarantee. Despite rumblings, there was no challenge to the change. Most likely as the FSA will not interfere with decisions made on commercial trading grounds.

So never say never.

gazpacho_uk

Thrugelmir wrote: »

The Skipton Building Society invoked the exceptional circumstances clause in 2010 to remove their guarantee. Despite rumblings, there was no challenge to the change. Most likely as the FSA will not interfere with decisions made on commercial trading grounds.

So never say never.

now I am worried again !!! LOL

Thrugelmir

gazpacho_uk wrote: »

now I am worried again !!! LOL

Then make hay while the sun shines. Save more into an account earning a higher rate than you are paying or overpay the mortgage.

That way you'll cover all eventualities. You only have to repay the capital balance on your mortgage once.

gazpacho_uk

Thrugelmir wrote: »

Then make hay while the sun shines. Save more into an account earning a higher rate than you are paying or overpay the mortgage.

That way you'll cover all eventualities. You only have to repay the capital balance on your mortgage once.

We carried on paying the same amount that we did on the tracker, which is around £200 overpayment each month. We only have around two years left on the mortgage, so hopefully that light at the end of the tunnel is not that far away ...... and its going to be quite an easy journey getting there

Thats for all the help

Thrugelmir

gazpacho_uk wrote: »

We only have around two years left on the mortgage,

Then the majority of your monthly payment will be capital and not interest in any event. Every month the interest chargewill reduce further. So any change in base rate will have a very low impact on your repayments.