Coventry BS - how variable is variable?

blokedownpub

Hi All, as savings rates are pretty dire and would rather not tie up cash in long term investments I'm after an offset mortgage. Normally the interest rates for these are pretty uncompetitive but the Coventry building society have a "Variable rate for term, currently 1.99%", which seems quite reasonable.

My concern is that as the rate isn't linked to the Bank of England base rate then they can change it at will. I called their advisers to clarify the rules they use to make adjustments but they couldn't tell me.

I guess the answer is "how long is a piece of string" but I'm looking for opinion or anecdotal evidence of how they're likely to treat this rate?

The setup and exit fees are £300 and £125 respectively so not a killer if they do decide to do something silly but would rather avoid if it were likely.

Any thoughts?

Thanks in advance.

amnblog

All that can be said is that variable rates will historically have followed base rates.

You are correct in that the BS can set the rate based on what suits their business

PBA

The cynic in me says are they just offering this rate to get business in the door, and then they'll quietly start increasing the rate hoping existing borrowers won't notice. But as long as you're reviewing your mortgage on a relatively regular basis then that doesn't matter, as long as you're prepared to move your mortgage at short notice if the rate increases relative to the market.

amnblog

PBA wrote: »

The cynic in me says are they just offering this rate to get business in the door, and then they'll quietly start increasing the rate hoping existing borrowers won't notice.

History tells us this is not what they do.

silvercar

I've been with them since 2000 and their tracker rate has always tracked the BoE rate.

Of course their behaviour in the future is not guaranteed by their behaviour in the past, but they do pride themselves on their fairness.

Daniel54

I have some savings with CBS and they have been slow to reduce their rates compared with many others.

I also had a Flexx mortgage with them and they were quick to reduce the rates as the BOE base rate fell in 2008

I've also experienced excellent customer service from them and their phone operatives are based in Coventry

blokedownpub

All, thanks for your feedback.

Ok, it's got to be worth a pop as it sounds like the building society has pretty good form.

One oddity was when I called initially and went through our details, the customer services person happened to have the same birthday as my wife. On calling back for more details the representative that time had the same birthday as myself. Coincidence surely but someone more cynical may think it a marketing ploy. :-)

Anyhow, thanks again.

Thrugelmir

blokedownpub wrote: »

Normally the interest rates for these are pretty uncompetitive but the Coventry building society have a "Variable rate for term, currently 1.99%", which seems quite reasonable.

Max LTV on the product is 65%. Which is most likely why it is.