MSE News: Buy-to-let borrowers hit by West Brom mortgage hike

caroldaisy

Hi
i would just like to see if ant other landlords have a lifetime tracker mortgage with west bromich.
I took out three life time tracker morgages for term of mortgage(25 years).i understood it would be 0.59% above bank of england base .
I have original paperwork and contract.
It was in this wednesdays daily mail that the building society has found a clause in the small print that they can change this. I have received a letter from them telling me they will increase rate by 2%.
I am disgusted as i thought a contract was a contract and if the bank of base had gone up i would have expected to pay. how would they like it if it had risen and i had said in order to protect my business and the tennants then i would pay them2% less!
i have three properties with them mortgage value £309000
the 2% increase will mean i will be £6180 per annum worse off on my profit (now wages !)
I left the nhs on voluntary redundancy in order to pursue my rental business full time.
This is very worrying as when you sign contracts you judge your business income accordingly and i was anticipating slow rises from the bank of England is 0.25 and then 0.5 etc
I also have lifetime trackers with other building societies and if they follow on also . It will be devastating for me.
My profits have been good for a few years because of the drop in rates and that is why a took a chance on leaving work.
i was always aware of the risks but never thought a building society could welch on a contract . i intend to speak to a solicitor and have already posted a comment on the daily mail website to this news.
I would like to discuss this further with any other members facing the same! i have written to several organizations

motch

hopefully the BOE base rate will get back to some sort of normality in the future and stop all this tinkering from the banks. I've always thought a good guide is around 5% base rate.

Thrugelmir

motch wrote: »

hopefully the BOE base rate will get back to some sort of normality in the future and stop all this tinkering from the banks. I've always thought a good guide is around 5% base rate.

A rise in base rates will also have a profound impact on property prices.

Typo22

As a retired saver and not a landlord, my heart is in the "vultures" camp.

But my head is firmly not. If a mortgage's T&Cs allow lenders to put up rates because of "market conditions", how is that a tracker and not a plain old variable rate mortgage? Sounds like another case of mis-selling to me.

Thrugelmir

Typo22 wrote: »

But my head is firmly not. If a mortgage's T&Cs allow lenders to put up rates because of "market conditions", how is that a tracker and not a plain old variable rate mortgage? Sounds like another case of mis-selling to me.

Very simply the Directors have a legal responsibility to maintain the BS in a solvent position. In every mortgage mortgage contract there is an exceptional circumstances clause. That's the fall back. The matter is somewhat more complex that merely "market conditions".

fewcloudy

Thrugelmir wrote: »

Very simply the Directors have a legal responsibility to maintain the BS in a solvent position. In every mortgage mortgage contract there is an exceptional circumstances clause. That's the fall back. The matter is somewhat more complex that merely "market conditions".

As I said before Thruglemuir, do you actually believe that the banks and BS's finances were so badly thought through, that a small number of customers on lifetime tracker mortgages are enough to cause them to become insolvent? Really?

Well I don't.

It's all very well tossing out "very simply" and "more complex than merely market conditions". FWIW I am not and never have been a BTL customer. In over 20 years of having a mortgage I have almost always had a fixed rate product at many % over the rate that the bank had borrowed the money at. And just because in the last 4 years or so I have a mortgage at a % below what they could borrow money at, they should just be allowed to cancel out the agreement?

I think you are confusing "Directors have a legal responsibility to maintain the BS in a solvent position" with "Directors are not able to deliver such huge profits to their fat greedy shareholders as they used to"...

If some day in the future my bank tell me that my contract with them is going to do anything other than track the BOE BR + 0.99% then yes, it is "simply" miss-selling.

brit1234

fewcloudy wrote: »

As I said before Thruglemuir, do you actually believe that the banks and BS's finances were so badly thought through, that a small number of customers on lifetime tracker mortgages are enough to cause them to become insolvent? Really?

Well I don't.

I guess then you missed the credit crunch, Leyman Brothers collapse, mass nationlisation of British banks and QE with Funding for Lending to keep the rest going then.

What we need is base rates to rise to help savers, pensions and banks make a profit sustainably.

fewcloudy

brit1234 wrote: »

I guess then you missed the credit crunch, Leyman Brothers collapse, mass nationlisation of British banks and QE with Funding for Lending to keep the rest going then.

What we need is base rates to rise to help savers, pensions and banks make a profit sustainably.

Patronising me doesn't make you look big or clever.

Base rates need to rise and they surely will rise sooner or later. I am a saver too, also have a pension etc. This underhand move by a very few lenders just reduces customer confidence.

We (lifetime tracker customers) are small potatoes to the lenders, minuscule in comparison to some of the world events you used above to try to make me look stupid. The only reason they are behaving this way is because at the moment they think they can.

fc

James_N

harpoboy wrote: »

Hi brit

Nice to see you've amended your signature.

It makes you look marginally less foolish.

Only marginally though. He still spouts nonsense.

Thrugelmir

fewcloudy wrote: »

The only reason they are behaving this way is because at the moment they think they can.

That's a patronising view too. Lenders have to raise the deposits in order to fund the money they advance. The financial crisis may have left the front pages. Doesn't mean that everything is resolved. Far from it. The situation in Europe could still blow UK banks off course in this inter connected global world.