BoE 0.1% base rate, why aren't mortgage providers passing this on to eligible customers?

edited 31 March 2020 at 12:44PM in Mortgages & Endowments
37 replies 1.6K views
24

Replies

  • edited 31 March 2020 at 1:52PM
    WillimS2020WillimS2020 Forumite
    1.1K Posts
    1,000 Posts Name Dropper
    ✭✭✭
    edited 31 March 2020 at 1:52PM
    csgohan4 said:
    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. 
    Let me just think about this for a moment, when there is a BoE interest rate rise it applies with immediate effect with mortgage lenders, so therefore they instantly gain the higher interest rate value, flip side of the coin there is a interest rate fall, which does not apply with immediate effect, so take mine for example which does not kick in until 1st May 2020, but the 0.1% lower rate was 30/03/2020.  This mean my mortgage provider who is going to take a 'full month' to pass on this lower interest rate to me and millions more like me, will make millions in interest.


    If you think that doesn't breach FCA rules, and does not make for a flood of FOS complaints, rate rises apply immediately , yet  rate falls apply after a month, why do a rate fall take a month to pass on, but a rate rise is with immediate effect, come on where you born yesterday?
  • prowlaprowla Forumite
    12.1K Posts
    Part of the Furniture 10,000 Posts Name Dropper
    ✭✭✭✭✭
    Quick to put interest rates up, slow to bring them down.
  • csgohan4csgohan4 Forumite
    10.5K Posts
    10,000 Posts Seventh Anniversary Name Dropper Photogenic
    ✭✭✭✭✭
    csgohan4 said:
    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. 
    Let me just think about this for a moment, when there is a BoE interest rate rise it applies with immediate effect with mortgage lenders, so therefore they instantly gain the higher interest rate value, flip side of the coin there is a interest rate fall, which does not apply with immediate effect, so take mine for example which does not kick in until 1st May 2020, but the 0.1% lower rate was 30/03/2020.  This mean my mortgage provider who is going to take a 'full month' to pass on this lower interest rate to me and millions more like me, will make millions in interest.


    If you think that doesn't breach FCA rules, and does not make for a flood of FOS complaints, rate rises apply immediately , yet  rate falls apply after a month, why do a rate fall take a month to pass on, but a rate rise is with immediate effect, come on where you born yesterday?
    prowla said:
    Quick to put interest rates up, slow to bring them down.
    Nothing new with quick to raise interest rates and slow to lower them, but this has been ongoing for years, Why has there noone had their complaint upheld then OP? Why has the banks been allowed to do this for so long??
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"

    G_M/ Bowlhead99 RIP
  • edited 31 March 2020 at 2:03PM
    ThrugelmirThrugelmir Forumite
    86.2K Posts
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    ✭✭✭✭✭✭
    edited 31 March 2020 at 2:03PM
    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. 
    I'm not giving advice. Merely attempting to explain how the real world works. In June all will be fixed. These are challenging and difficult times for everyone. I would suggest that you go for a walk. It has an amazing effect on our mental well being. 
    Real insurance claim quote : -

    "Going to work at 7am this morning I drove out of my drive straight into a bus. The bus was 5 minutes early.".
  • fewcloudyfewcloudy Forumite
    502 Posts
    Ninth Anniversary 100 Posts Photogenic Name Dropper
    ✭✭
    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. 
     I was clearly miss-sold this financial product
    Don't be so ridiculous
    Feb 2008, 20year lifetime tracker with "Sproggit and Sylvester"... 0.14% + base for 2 years, then 0.99% + base for life of mortgage...base was 5.5% in 2008...but not for long. all credit goes to my mortgage broker and yes he knows it
  • WillimS2020WillimS2020 Forumite
    1.1K Posts
    1,000 Posts Name Dropper
    ✭✭✭
    Don't you just love the responses from those who haven't a clue on the subject, 'go for a walk' or 'don't be so ridiculous'. I am just glad I am not paying for any of this 'expert' advice :D
  • zagfleszagfles Forumite
    17.8K Posts
    Part of the Furniture 10,000 Posts Name Dropper Chutzpah Haggler
    ✭✭✭✭✭
    So what do the terms of your tracker say? Have you read them? They'll likely say something about passing on changes to the base rate within a certain period of time, it's unlikley to be immediate.
  • csgohan4csgohan4 Forumite
    10.5K Posts
    10,000 Posts Seventh Anniversary Name Dropper Photogenic
    ✭✭✭✭✭
    Don't you just love the responses from those who haven't a clue on the subject, 'go for a walk' or 'don't be so ridiculous'. I am just glad I am not paying for any of this 'expert' advice :D
    .............
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"

    G_M/ Bowlhead99 RIP
  • WillimS2020WillimS2020 Forumite
    1.1K Posts
    1,000 Posts Name Dropper
    ✭✭✭
    zagfles said:
    So what do the terms of your tracker say? Have you read them? They'll likely say something about passing on changes to the base rate within a certain period of time, it's unlikley to be immediate.
    Now you mention it, I have the previous letter from my mortgage lender when the BoE rate was risen from 0.5% to 0.75% with 'immediate' effect, I now have in my hand a letter dated 27/03, stating the 'new' lower rate  interest rate 0.01% will apply from 01/05, next month a 'full' 4 weeks interest in their favour. 

    On that basis my mortgage provider stipulates the interest rate on the account is 2.0000%, I have worked that out to be on the base rate of 0.5%, so clearly they are still not passing on the 0.1%, they obviously think that Jo Public can,t work out the BoE base rates, and how it is worked out. 
  • zagfleszagfles Forumite
    17.8K Posts
    Part of the Furniture 10,000 Posts Name Dropper Chutzpah Haggler
    ✭✭✭✭✭
    zagfles said:
    So what do the terms of your tracker say? Have you read them? They'll likely say something about passing on changes to the base rate within a certain period of time, it's unlikley to be immediate.
    Now you mention it, I have the previous letter from my mortgage lender when the BoE rate was risen from 0.5% to 0.75% with 'immediate' effect, I now have in my hand a letter dated 27/03, stating the 'new' lower rate  interest rate 0.01% will apply from 01/05, next month a 'full' 4 weeks interest in their favour. 

    On that basis my mortgage provider stipulates the interest rate on the account is 2.0000%, I have worked that out to be on the base rate of 0.5%, so clearly they are still not passing on the 0.1%, they obviously think that Jo Public can,t work out the BoE base rates, and how it is worked out. 

    Once again, what do the terms say? There might be a floor, there might be a delay allowed etc etc.
This discussion has been closed.
Latest News and Guides

£10-£50 London theatre tickets

For over 45 shows in January and February

MSE Deal

Join the 1p Savings Challenge 2022!

It should help you save £667.95

MSE Forum