Variable Rate Never Goes Down

gonefishing

We have a secured loan on a variable interest rate, which in 10 years has never once reduced, despite the massive reductions in the bank base rate. As any form of refinancing is out of the question for us, I thought I would tackle the loan company on the subject today. They insist that their rate is based on the rate that they borrow at and has nothing to do with the bank rate. Whilst I accept this may well be true, I find it difficult to believe that their cost of borrowing has not fallen over the last 10 years.

I could tell from the voice of the representative that he was feeling very uncomfortable discussing the subject and I "almost" felt sorry for him. When I asked him a direct question; "has your borrowing rate fallen over the last 10 years?" he became quite agitated and after lots of spluttering, he unconvincingly answered no. The loan company is apparently owned by a Building Society, so I am struggling to believe him. I would be interested to know if anyone has ever succeeded in getting a lower interest rate under these circumstance and if so how they went about it; or would I be just wasting my time. The loan company has never been very supportative, so I am pretty sure I would not be able to appeal to the better side of their nature!

Any advice would be gratefully received.

Gaz83

In all the threads I've read about variable interest rates on here, they only ever vary one way - up.

nomoneytoday

Can you not revisit refinancing at a lower APR?

[Deleted User]

Its a fact that such interest rates rarely if ever go down, its a bit like cc rates which still charge 18-19% yet offer new customers 3 years free credit, no doubt the OPs lender offers their best rates to new business

ViolaLass

In 10 years, your financial position has not improved enough for you to refinance?

ReadingTim

It's their money and their choice who they lend to and at what rate. The only people they're accountable to are those who own the business - the shareholders. Not you, a customer.

Furthermore what business (which exists to make a profit, not provide a service to society) would reduce the profit they're making from a customer, especially as that customer isn't in a position to go elsewhere?

p00hsticks

You could look at it this way;

If they loaned you the money ten years ago, then they had to borrow that amount ten years ago, at whatever interest rate they could get at the time .... the fact that if they loaned you the same amount now it would be cheaper for them is neither here nor there.

PeacefulWaters

Gaz83 wrote: »

In all the threads I've read about variable interest rates on here, they only ever vary one way - up.

Yet so many evil banks passed on the most recent base rate cut in full to mortgage customers.

Arleen

PeacefulWaters wrote: »

Yet so many evil banks passed on the most recent base rate cut in full to mortgage customers.

It all depends on what the competition does. If even one bank were to pass the cut, but others didn't, that one would win a lot of customers.