"Thousands" with BOE trackers face mortgage interest rate rise

wotsthat

Graham_Devon wrote: »

Well you are of course free to disagree. I don't particularly want to agrue about it though.

I don't see that it's a particularly outrageous claim to make consdiering more and more appear to be writing in that thread, on the guardian and telegraph that this will see them lose their home.

If they can't be classed as zombie households, I don't know who would be classed as such.

I posted you a link to what the Guardian said when Santander put their rate up to 4.74% last August. I expect three or four posters on this site said they couldn't afford to pay it too. Many more households were affected than this. Doesn't look as if it's going to affect repossessions at all.

What's so very different about this? Quite an exciting leap in the rate and household budgets will need some readjustment but the rate is low even by recent standards.

michaels

Under the UTCCR could you sell a product badged as a 'Base Rate Traacker' and then include a condition stating that it does not have to track the base rate, it is almost Trades description isn't it?

Is there an equivalent term stating that if an increase in the base rates makes the borrower's business unviable they can unilaterally choose to pay a lower rate?

Don't forget that agreements between businesses and banks that protected the business from increases in interest rates are being struck down at the moment as they cost businesses when rates fell - ie even if the small print says it is allowed doesn't mean that banks can get away with it.

Finally if the bank is trying to use such a 'force majure' clause then surely the new rate should not be 'at the banks discretion' but would need to demonstrably be a rate that reflected the banks cost of funding rather than a random rate selected to make them a nice profit on the deals?

chucknorris

ILW wrote: »

4.5% is bloody peanuts.

You have to put it into context, peanuts of a peanut plant (or wherever peanuts come from) yes. But for me it would be an extra 20k in interest to pay every year, not what I would call peanuts and not a nice surprise either.

I guess it is more of the gravy train ending for most than a case of financial disaster, I too would be disspointed for it to end that way. At least with the base rate going back up it will be visible and over a longer period of time and compensated to some extent by the probable recovery of the economy.

EDIT: whoops it is 20k (not 23k)

PaulF81

Still paying 2.49%.... this month managed to pay down to 75% of the original capital on the loan.

That lifetime tracker I got looks a pretty good deal now, when I got it they were forecasting rate rises in 6-12 months.

Not a rate rise in sight now!

chucky

All this threads needed was a red exclamation mark, wingdings 48 font in bold with a dubious image for it to be the same type of thread that Brit starts that in reality have impact on about 3 or 4 mortgages in the whole country. Exaggerate it why don't you.

james_toney

the only thing is , will any of the other banks follow this, what is stopping them to doing it to all mortgages, even the one with lifetime tracker % above base rate,

Thrugelmir

james_toney wrote: »

the only thing is , will any of the other banks follow this, what is stopping them to doing it to all mortgages, even the one with lifetime tracker % above base rate,

Not the first time this has happened.

Skipton Building Society and Norwich & Peterborough BS.

james_toney

Thrugelmir wrote: »

Not the first time this has happened.

Skipton Building Society and Norwich & Peterborough BS.

really !! i did not know this, will have to think very carefully about any mortgage again from now on,

Thrugelmir

james_toney wrote: »

really !! i did not know this, will have to think very carefully about any mortgage again from now on,

All mortgage contracts have an all encompassing "exceptional circumstances" clause.

Banks are in regular communication with the FSA regarding their capital reserve adequacy. So I'm sure that the FSA would have been notified prior to the public announcement and raised no objections

Doubt this will be the last lender to do this either.

james_toney

Thrugelmir wrote: »

All mortgage contracts have an all encompassing "exceptional circumstances" clause.

Banks are in regular communication with the FSA regarding their capital reserve adequacy. So I'm sure that the FSA would have been notified prior to the public announcement and raised no objections

Doubt this will be the last lender to do this either.

i very much doubt it too, dont think it will be long before we see it