Mortgage rate hike??

bobmonkeydog

Dear all,

My mortgage is currently very competitive - at the end of my fixed rate last year we reverted to paying 1% above base rate so we are now paying just 1.5%.

In the news today I noticed that there are some banks that are increasing their rates. Can my lender do this?? I was under the impression that only a base rate increase would affect my payments???

I am with HSBC

Anyone got any ideas????

callmechar

It depends if its the banks standard variable rate - this is variable

betmunch

It doesnt sound like its a Banks Standard Variable, it sounds like you have reverted to a tracker.

Get the paperwork out and have a look.

If you have reverted to a tracker you will only see and increase when the bank of england decides to increase its rates. If you have a Standard Variable rate it can vary, as Callmechar states

Thrugelmir

bobmonkeydog wrote: »

In the news today I noticed that there are some banks that are increasing their rates. Can my lender do this?? I was under the impression that only a base rate increase would affect my payments???

I am with HSBC

Anyone got any ideas????

HSBC is one of a handful of banks where raising funding is not an issue. As the majority of its business is conducted in Asia. Where by nature, people are more cautious with their money.

So unlike LloydsHBOS for example. HSBC isn't exposed to the whims of the wholesale money markets nor the need to attract retail deposits with high savings rates.

In a simplified answer to your question. Yes banks can change their lending rates and amend contractual terms. Fundamentally on the basis that they need to lend profitably, i.e. at a higher rate than the money is costing them to borrow. The FSA will not interfere providing the banks can prove that the increase is due to commercial pressures. As was the case with both Skipton and Norwich & Peterborough Building Societies.