Stupid question ?

Rubyminx

Can anyone explain why buyers cannot get new mortgage at the base rate ? Why do we have to enter into a termed contract that is higher than the variable base rate with penalties if repaid early ?
My partner and I are taking out a new mortgage, but can only get one that is higher than the base rate and carries early repayment charges.
We have a 10% deposit.
Thanks,
Ruby

Suarez

How do you expect banks to make money?

Savings rates are already low so if all mortgages were at base rate interest rates for savings would be zero.

opinions4u

Rubyminx wrote: »

Can anyone explain why buyers cannot get new mortgage at the base rate ? Why do we have to enter into a termed contract that is higher than the variable base rate with penalties if repaid early ?
My partner and I are taking out a new mortgage, but can only get one that is higher than the base rate and carries early repayment charges.
We have a 10% deposit.
Thanks,
Ruby

Who's base rate are you referring to?

Regardless, the lender puts up a price tag. The borrower decides whether or not to buy.

Thrugelmir

Rubyminx wrote: »

Can anyone explain why buyers cannot get new mortgage at the base rate ?

Banks and building societies rely on savers deposits to fund mortgages. On top of paying savers interest, there's the costs of running the business as well. All of which means that the cost to borrowers has to be higher.

bigadaj

OP this is a fairly basic question as others have explained, you are currently potentially benefitting from the lowest mortgage rates that have ever existed. Try and do some reading on basic finances and this will help you, also consider there are many other costs in both buying and maintaining a house and make sure you are aware of all of these.