BoE 0.1% base rate, why aren't mortgage providers passing this on to eligible customers? 31 March 2020 at 1:41PM edited 31 March 2020 at 1:44PM in Mortgages & endowments 37 replies 1.6K views

WillimS2020

Bank of England has dropped its base rate to a historic 0.1%, people like myself who have tracker mortgages are not being passed on this rate, surely these mortgage providers should be reported to the FCA.   

davidmcn

Are you sure you're meant to have it passed on? I would expect there to be a minimum rate.

Thrugelmir

Insufficient time to react to the announcement. Normally base rate changes are announced at the beginning of the month. Giving lenders plenty of time to process the change. 

csgohan4

davidmcn said:

Are you sure you're meant to have it passed on? I would expect there to be a minimum rate.

not to mention, some lenders have a floor limit under which they wouldn't go below. 

WillimS2020

davidmcn said:

Are you sure you're meant to have it passed on? I would expect there to be a minimum rate.

Tracker means just that, it tracks the BoE base rate which is currently 0.1%, which means your interest rate drops, hence so does your monthly repayments, some banks/mortgage lenders are not passing this on to customers or more often than not giving incorrect rates, I have calculated that my mortgage should have dropped by £18 per month given the new 0.1% base rate, my mortgage company has dropped it by £3. 

  This is clearly incorrect and clearly not tracking the correct base rate, I have of course written and complained, and awaiting response.     I suggest everyone else do the same, I might also add the last time the rates went 'up', I was swiftly notified when the base rate went up it would cost me another £16 per month. 

Thrugelmir

WillimS2020 said:

davidmcn said:

Are you sure you're meant to have it passed on? I would expect there to be a minimum rate.

Tracker means just that, it tracks the BoE base rate which is currently 0.1%, which means your interest rate drops, hence so does your monthly repayments, some banks/mortgage lenders are not passing this on to customers or more often than not giving incorrect rates, I have calculated that my mortgage should have dropped by £18 per month given the new 0.1% base rate, my mortgage company has dropped it by £3. 

  This is clearly incorrect and clearly not tracking the correct base rate, I have of course written and complained, and awaiting response.     I suggest everyone else do the same, I might also add the last time the rates went 'up', I was swiftly notified when the base rate went up it would cost me another £16 per month. 

Did you read my earlier comment?  
PS. Direct Debits are set up 10 days on advance of the collection date. 

Neutrinno

WillimS2020 said:

davidmcn said:

Are you sure you're meant to have it passed on? I would expect there to be a minimum rate.

Tracker means just that, it tracks the BoE base rate which is currently 0.1%, which means your interest rate drops, hence so does your monthly repayments, some banks/mortgage lenders are not passing this on to customers or more often than not giving incorrect rates, I have calculated that my mortgage should have dropped by £18 per month given the new 0.1% base rate, my mortgage company has dropped it by £3. 

  This is clearly incorrect and clearly not tracking the correct base rate, I have of course written and complained, and awaiting response.     I suggest everyone else do the same, I might also add the last time the rates went 'up', I was swiftly notified when the base rate went up it would cost me another £16 per month. 

We are all aware of how tracker rate mortgages work. David is simply stating that most tracker mortgages have a 'minimum rate' i.e. a cap on how low the tracker can go. With the base rate now being at a historic low, it's likely most people will be capped now. Why don't you check over your mortgage offer or statements and see what your cap limit is?

WillimS2020

Thrugelmir said:

WillimS2020 said:

davidmcn said:

Are you sure you're meant to have it passed on? I would expect there to be a minimum rate.

Tracker means just that, it tracks the BoE base rate which is currently 0.1%, which means your interest rate drops, hence so does your monthly repayments, some banks/mortgage lenders are not passing this on to customers or more often than not giving incorrect rates, I have calculated that my mortgage should have dropped by £18 per month given the new 0.1% base rate, my mortgage company has dropped it by £3. 

  This is clearly incorrect and clearly not tracking the correct base rate, I have of course written and complained, and awaiting response.     I suggest everyone else do the same, I might also add the last time the rates went 'up', I was swiftly notified when the base rate went up it would cost me another £16 per month. 

Did you read my earlier comment?  
PS. Direct Debits are set up 10 days on advance of the collection date. 

I have received a letter from my mortgage company they are passing on the £3 reduction in mortgage payments as-of 1st May 2020, clearly the new BoE 0.1% base rate was from 30/03/2020, which means yet again not only is my mortgage provider not passing on the correct tracker rate, they are also clearly not backdating it from the 30/03/2020, they are clearly flouting FCA rules. 

Thrugelmir

WillimS2020 said:

Thrugelmir said:

WillimS2020 said:

davidmcn said:

Are you sure you're meant to have it passed on? I would expect there to be a minimum rate.

Tracker means just that, it tracks the BoE base rate which is currently 0.1%, which means your interest rate drops, hence so does your monthly repayments, some banks/mortgage lenders are not passing this on to customers or more often than not giving incorrect rates, I have calculated that my mortgage should have dropped by £18 per month given the new 0.1% base rate, my mortgage company has dropped it by £3. 

  This is clearly incorrect and clearly not tracking the correct base rate, I have of course written and complained, and awaiting response.     I suggest everyone else do the same, I might also add the last time the rates went 'up', I was swiftly notified when the base rate went up it would cost me another £16 per month. 

Did you read my earlier comment?  
PS. Direct Debits are set up 10 days on advance of the collection date. 

I have received a letter from my mortgage company they are passing on the £3 reduction in mortgage payments as-of 1st May 2020, clearly the new BoE 0.1% base rate was from 30/03/2020, which means yet again not only is my mortgage provider not passing on the correct tracker rate, they are also clearly not backdating it from the 30/03/2020, they are clearly flouting FCA rules. 

In due course you'll find your assertions to be totally misjudged. Everything will come out in the wash so to speak. 
The contractual product terms and conditions of your mortgage is what matters. These aren't set by the FCA. As a consequence there's no flouting. 

WillimS2020

Thrugelmir said:

WillimS2020 said:

Thrugelmir said:

WillimS2020 said:

davidmcn said:

Are you sure you're meant to have it passed on? I would expect there to be a minimum rate.

Tracker means just that, it tracks the BoE base rate which is currently 0.1%, which means your interest rate drops, hence so does your monthly repayments, some banks/mortgage lenders are not passing this on to customers or more often than not giving incorrect rates, I have calculated that my mortgage should have dropped by £18 per month given the new 0.1% base rate, my mortgage company has dropped it by £3. 

  This is clearly incorrect and clearly not tracking the correct base rate, I have of course written and complained, and awaiting response.     I suggest everyone else do the same, I might also add the last time the rates went 'up', I was swiftly notified when the base rate went up it would cost me another £16 per month. 

Did you read my earlier comment?  
PS. Direct Debits are set up 10 days on advance of the collection date. 

I have received a letter from my mortgage company they are passing on the £3 reduction in mortgage payments as-of 1st May 2020, clearly the new BoE 0.1% base rate was from 30/03/2020, which means yet again not only is my mortgage provider not passing on the correct tracker rate, they are also clearly not backdating it from the 30/03/2020, they are clearly flouting FCA rules. 

In due course you'll find your assertions to be totally misjudged. Everything will come out in the wash so to speak. 
The contractual product terms and conditions of your mortgage is what matters. These aren't set by the FCA. As a consequence there's no flouting. 

There will be for the FOS, I was clearly miss-sold this financial product, as it doesn't do what it says on the tin, when there is a BoE interest rate rise this is with  'immediate' effect from that date passed on to the customers, however when the rate is lowered it takes a month or two to apply, and you honestly believe the FOS will not consider this a breach of contract, you clearly have no idea on this subject, hence I will take no advice from you. 

csgohan4

Guess the holidays / isolation are taking effect

OP please come back to us with regards to the outcome of the complain you have made, baring in mind they will take minimum 8 weeks plus more for the current situation on the £18 you have perceived to have lost.

As Above DD are taken 10 days in advance, there will be invariable some delay and most lenders will pass this on on 1/4/20 as base rates changes are normally announced at the beginning of the month. These are strange and unorthodox times. 

There is more to worry about than the BOE at present, you will get your rate decrease as per your T+Cs just takes some time. 

If your not happy, I suggest you go on a Fixed rate mortgage for 10 years, that way no surprises both up or down.