MSE News: When is a tracker mortgage not a tracker?

Former_MSE_Helen

This is the discussion thread for the following MSE News Story:

"Some mortgage holders who believe their tracker rate is pegged to the Bank of England base rate could be in for a nasty shock"

Read the full story:
When is a tracker mortgage not a tracker?

michaels

Also worth mentioning that many mortgages also hae 'exceptional circumstances' terms which give the banks a get out as well - for example on 'svr never more than 2% above BoE base rate' promises.

Funnily enough these clauses all seem to be in the banks favour, borrowers don't have a 'I want out of my 10 year fix after 5 years because base rates are exceptionally low' clause to fall back on. Hopefully the ombudsman will look at the relative financial expertise of lenders and borrowers and throw these stealth rises out.

The_J

Their money, their rules. If you were giving someone hundreds of thousands of pounds you would make them dance to any tune you like.

nomoneytoday

IMHO it's not sustainable to lend people money at 2%, but have to pay savers 3-4% to remain competitive...

ILW

Is more banks going bust going to help anyone?

EricMears

The_J wrote: »

Their money, their rules. If you were giving someone hundreds of thousands of pounds you would make them dance to any tune you like.

But it's not "Their money" ! In the case of real building societies it's the investing members' money and even in the case of 'banks' it's still money they've borrowed from someone else.

Nor for that matter are they 'giving' it away.

I look forward to hearing that the financial organisations looking after my money have found some special reason to reward me better.

The_J

nomoneytoday wrote: »

IMHO it's not sustainable to lend people money at 2%, but have to pay savers 3-4% to remain competitive...

You're right, so think about it...

The ECB is lending money to banks at 1%, LIBOR is 1.08%. What does that suggest to you?

ILW

EricMears wrote: »

But it's not "Their money" ! In the case of real building societies it's the investing members' money and even in the case of 'banks' it's still money they've borrowed from someone else.

Nor for that matter are they 'giving' it away.

I look forward to hearing that the financial organisations looking after my money have found some special reason to reward me better.

The rates on many savings accounts have increased recently.

The_J

EricMears wrote: »

But it's not "Their money" ! In the case of real building societies it's the investing members' money and even in the case of 'banks' it's still money they've borrowed from someone else.

That is, their money. The members have invested it with them and therefore EVEN MORE SO it is good that they are being careful with it an ensuring the members get a good return on their investment.

I look forward to hearing that the financial organisations looking after my money have found some special reason to reward me better.

See above, if your savings rates are higher than that then you are being rewarded. In this climate you could easily expect banks to charge you to look after your money (-ve interest rate).

The debtor dances to the debtee's tune.

DannyboyMidlands

Some mortgage holders who believe their tracker rate is pegged to the Bank of England base rate.........should have paid more attention when they signed up.

The_J

Pride comes before a fall dannyboy :grouphug: