MSE News: Bank of Ireland to raise mortgage SVR

poppy10_2

blacksta wrote: »

what is the difference between a libor rate and SVR

LIBOR is the London Interbank Offered Rate - basically the rate at which banks lend to each other. When this rate goes up, the banks have to pay more to borrow money.

SVR is the Standard Variable Rate - it varies from bank to bank. It's the basic rate at which bank lends money to customers. Once your fixed rate/tracker period deal finishes, you'll usually go on to the bank's SVR.

People seem to have forgotten the Variable part of Standard Variable Rate. They've been paying historically low rates for the last 2-3 years. Now they are moaning when the rate is going up.

The banks can't subsidise their mortgage customers, if LIBOR is going up and it is costing them more to obtain funds, then they will inevitably pass the cost on to the customers.

This problem is only going to get worse as the second leg of the credit crunch gets under way and more banks follow suit. People have gotten used to paying peanuts for their mortgage, yet most haven't been using the extra money wisely by overpaying their mortgage or saving the difference. They're in for a sharp shock over the next year or so.

blacksta

^^

thanks

if i have a mortgage that says boe + 2.15% can the bank turn round and increase the 2.15 portion of the mortage

poppy10_2

blacksta wrote: »

^^

thanks

if i have a mortgage that says boe + 2.15% can the bank turn round and increase the 2.15 portion of the mortage

Which lender are you with?

blacksta

poppy10 wrote: »

Which lender are you with?

gmac - i am sure they are no longer offering mortgages

regprentice

An svr of 2% was untenable. AIB are on 3% , pity those with Ulsterbank on 4.75.

kingstreet

regprentice wrote: »

An svr of 2% was untenable. AIB are on 3% , pity those with Ulsterbank on 4.75.

Who has an SVR of 2%?

poppy10_2

blacksta wrote: »

gmac - i am sure they are no longer offering mortgages

OK, well most lenders have a clause stating that they can raise their rates (the 2.15% in your case) in certain circumstances, for example if the cost of wholesale funding goes up. They normall have to give you notice and give you the option of rejecting the change by paying off your mortgage in full without having to pay any early repayment charges.

But basically yes, they can raise the rate if they want to.

blacksta

poppy10 wrote: »

OK, well most lenders have a clause stating that they can raise their rates (the 2.15% in your case) in certain circumstances, for example if the cost of wholesale funding goes up. They normall have to give you notice and give you the option of rejecting the change by paying off your mortgage in full without having to pay any early repayment charges.

But basically yes, they can raise the rate if they want to.

interesting - it has been that rate for the last three years , so what is the point a tracker then if they raise it any time

kazoouk

Got the letter this morning.. This has been what I have been dreading for a long time.. For all those smart !!!!!! who seem to think we can just change to a fixed.. No dice.. We have less than 10% equity thanks to the housing dip .. We are stuck.. 1.5% in less than a year is criminal.. We are going to be down £200 a month. I feel absolutely trapped as I know this is only going to get worse when the boe rate goes up which is inevitable

ManuelT

Got a Bristol and West Mortgage 3 and a bit years ago fixed for 3 years, really stuggled towards the end of the fixed rate as everything has gone up except our wages so the SVR was a godsend. We can't remortgage as we are now self employed and our LTV is high probably close to 95% as property prices haven't moved in 3 years. So we are now looking to see if we can afford to keep the house which i'm hoping we will just be able to do but it's very tight.