Whinging.

Thrugelmir

RenovationMan wrote: »

I don't think so, there are plenty of alternatives to remaining on SVR. Perhaps the SVR rises will just stop people from being lazy and make them actually think about where they lend their money from and at what rate.

You speak as if there's a real alternative. There's not.

SVR is reflecting the cost of money to the lenders. Its a benchmark. Heavily discounted rates below SVR will become a thing of the past.

Graham_Devon

RenovationMan wrote: »

I don't think so, there are plenty of alternatives to remaining on SVR.

Name some then.

Name some for someone with 85%+ LTVs.

Halifax have indeed offered an alternative. But it cost's more than the SVR, and only lasts 2 years.

olly300

PaulF81 wrote: »

Off (sic) course I know that. :rotfl:

My point was, despite receiving HALF the typical mileage that most companies pay for business, I still can cover costs. Who seriously would buy an Audi or any car with massive depreciation if all they are going to do is commute to work and back in the main? Poor personal choice if you ask me.

You forget that people change jobs or lose one then gain another one further away.

So if you are like quite a few people I know who didn't have to commute to work by car then affording a fuel guzzler wasn't a problem but once they had to change jobs and started having to do lots of miles the fuel efficiency became a problem.

Unfortunately if you cannot afford to do a part-exchange or the car dealer refuses to do one, then you are going to have to wait until you sell your car.

BTW most people I know buy 2nd hand cars so depreciation isn't a massive issue.

RenovationMan

Graham_Devon wrote: »

Name some then.

Name some for someone with 85%+ LTVs.

Halifax have indeed offered an alternative. But it cost's more than the SVR, and only lasts 2 years.

So everyone on SVR has 85%+ LTVs?

Show me the proof of that.

Graham_Devon

RenovationMan wrote: »

So everyone on SVR has 85%+ LTVs?

Show me the proof of that.

That's not what I said and you know it. I merely asked for a product for those on SVR with an LTV above that figure.

Take it you won't answer the question? You stated there were plenty of options for people on SVR. I'm wondering what they are. Julie said the same, but wouldn't tell me what they were either.

vivatifosi

Thrugelmir wrote: »

You speak as if there's a real alternative. There's not.

SVR is reflecting the cost of money to the lenders. Its a benchmark. Heavily discounted rates below SVR will become a thing of the past.

Exactly. I've wanted to say that but you articulated it better.

In the past there was a relationship between inflation and interest rates where there was a big cancelling out effect but it's gone out of the window as the BoE tries to bolster very weak demand. I wonder if reducing the rates - as suggested by economists in a thread started today by Hamish - could have unintended consequences. Would banks put up SVRs to cover costs on mortgages with little margin, especially trackers that are only slightly above base? This could affect those in the weakest position (neg eq, low eq, low pay, poor credit, self-cert etc).

HAMISH_MCTAVISH

Thrugelmir wrote: »

SVR is reflecting the cost of money to the lenders.

Thrugelmir, that's just a blatant lie.

Current SVR rates represent massive profiteering through abuse of a cartel position and lack of competition in the markets.

Its a benchmark. Heavily discounted rates below SVR will become a thing of the past.

On the contrary, eventually competition will return and the bankers will get their comeuppance.

pqrdef

HAMISH_MCTAVISH wrote: »

Current SVR rates represent massive profiteering through abuse of a cartel position and lack of competition in the markets.

Maybe - if you think it's sensible to fund a mortgage book through short-term borrowing, trusting to luck that refinancing funds and credit will always be available.

Or maybe the banks do too much of that already and borrowers should pay more realistic rates for 20-year money.

HAMISH_MCTAVISH

pqrdef wrote: »

Maybe - if you think it's sensible to fund a mortgage book through short-term borrowing, trusting to luck that refinancing funds and credit will always be available.

We don't as a rule have long term lending in the UK on fixed rates.

Mortgages adjust with funding costs all the time.

What people object to is the current situation, where trapped SVR borrowers are exploited with exorbitant record high bank margins, (4% or so above base) whilst new borrowers are able to access rates that reflect the cost of funding plus a decent profit. ie, 2% margins above base.

It cannot be emphasised enough that bank funding costs are currently FALLING, yet they are raising rates anyway.

Or maybe the banks do too much of that already and borrowers should pay more realistic rates for 20-year money.

Then the UK banks should lend on 20 year + terms.

You can get a 30 year fixed mortgage in America for 4.5% today.

That accurately reflects the cost of long term money in the market today, plus a reasonable profit for the bank.

Except of course in "Rip-off Britain", where competition has been removed and the banks can gouge customers at will.

A 20 year swap rate today for the UK is 3.1%. Banks can mark that up by nearly 50%, and lend mortgages at 4.5% fixed for a two decade term.

the_flying_pig

HAMISH_MCTAVISH wrote: »

... in "Rip-off Britain", where competition has been removed...

Blame your magnificent risk-taking capitalist heroes at HBOS and Northern Rock for that. Despite your mantra that there were no 'systemic' problems with uk retail lending Halifax and NR between them had about a third of the mortgage market. The pair of them merging with another huge player and/or being state zombified did far more to reduce competition than anything else.