Coventry Building Society NOT cutting rates!

csgohan4

bluh74 said:

OK Dunstonh so why then do lenders amend their SVRs when BBR changes. It's because the FCA and BoE took a very dim view of lenders not passing on the drop in 2008-09 when rates went from 5% to 0.5%. Now with Flex the rates (at least mine) followed BBR down in 2016 and then up in 2017 and again 2018. The FCA will clearly see this as a breech of TCF as they have set precedents and are now misleading consumers (I wouldn't mind if my rate never changed but it has so precedent created). Doesn't matter what the T&Cs say the FCA will look at how they have treated consumers and will not be impressed by this current stance.   

Wrong, the FCA will look at what YOU signed and agreed to, seems they are satisfying their end of the agreement. Just because you didn't get a true tracker mortgage, you seem to be blaming the lender when you were the one who agreed this mortgage. 

I wouldn't mind to have had a tracker mortgage but took out a fixed mortgage instead, who's responsibility was this? Mine, not the lenders. Do I have reasonable grounds to complain, hell no. 

You want your cake and eat it, it's not going to happen. Rather having sour grapes because the BOE is low, take responsibility or move on, noone can predict BOE rates accurately. 

If you feel you have a case, please complain to FCA and post on here what the outcome here. 

silvercar

bluh74 said:

OK Dunstonh so why then do lenders amend their SVRs when BBR changes. It's because the FCA and BoE took a very dim view of lenders not passing on the drop in 2008-09 when rates went from 5% to 0.5%. Now with Flex the rates (at least mine) followed BBR down in 2016 and then up in 2017 and again 2018. The FCA will clearly see this as a breech of TCF as they have set precedents and are now misleading consumers (I wouldn't mind if my rate never changed but it has so precedent created). Doesn't matter what the T&Cs say the FCA will look at how they have treated consumers and will not be impressed by this current stance.   

The fact that people could and did take out a BoE rate tracker when you chose to take a Flexx product will weaken your argument.
(Incidentally my product was a 5 year fixed rate followed by a lifetime BoE tracker, so I had being payer a higher rate for a number of years before I gained what is now an amazing deal.)

dunstonh

OK Dunstonh so why then do lenders amend their SVRs when BBR changes. 

Different lenders fund their borrowing by different means.   There is no direct link.  However, many will use funding sources where there is a closer link.  Some will have funding that sees the bulk of it affected by interest rates.  Others will have less.   The SVR also has financial solvency and affordability in terms of the lender impacting on it.

The FCA will clearly see this as a breech of TCF as they have set precedents and are now misleading consumers

Lets see the proof then.  Where in your contract does it say it is a base rate tracker.  How has it misled you?
And previous rate changes do not set precedents.    And the FCA will not take action if the lender is acting reasonably.   If the lender cannot afford to lower its SVR without straining its solvency requirements then the FCA put financial solvency ahead of rates.  If it believes it is profiteering then it may well take a view.   Your argument assumes it is profiteering but there this no evidence to suggest it is.   
When the base rate is low, the net interest margin gets lower.    Depending on the business model of the lender,  some will find ways to absorb the reduction. Some will cross-subsidise.  Some get to a point where they just cannot go lower without putting their own solvency at risk.

MattJ007

I was looking for the above product the other day, have CBS pulled the Flex? 

nickpick79

This is what is says in the mortgage offer:

The mortgage contract shown in this Offer is provided by Coventry Building Society.

FFM54 - Flexx for Term - A variable rate, currently 1.75%, which is managed by Coventry Building Society

and is set independently of its Standard Variable Rate and the Bank of England Base Rate, to the end of the

mortgage term.


this is what they emailed me:

We currently have a selection of variable products and not all of these products are linked to the Base Rate of England (BBR). For those products where the rates have been reduced, we have already sent confirmation to our members in writing. If you haven't received a letter, you may have a Flexx product.

I can confirm that following a review by the society our Flexx for Term rates remain unchanged. When reviewing our rates we consider Bank of England Base Rate as one of a number of factors which include; economic forecasts, products offered by other lenders, the impact on our savers, the cost of funding and so on. What we've done this time is concentrate the impact of the falling interest environment on those borrowers currently paying higher rates. We've taken this action before, when rates fell dramatically during the last financial crisis.

We believe that our Flexx rates continue to offer good long-term value to our members through a combination of rate and product features. For example, we don't apply any Early Repayment Charge to our Flexx range so you're not tied to your current product if you think an alternative - either with us or another lender- would suit you better. We'd be happy to talk to you about other options if you feel this is appropriate. 

This is a difficult time and were seeing some extraordinary events right now but we have to consider the needs of all members, and that sometimes means making some difficult and unwelcome decisions. 

Looks like they can do whatever they want according to the offer document. However, this is not how it was sold to me. Also historical behaviour does set a precedence in my view. I’ll try to go all the way. Complaint, financial ombudsman and then take them to court. Just for the sake of it. It’s also a great learning experience. 

Thrugelmir

nickpick79 said:

 A variable rate, currently 1.75%, which is managed by Coventry Building Society

and is set independently of its Standard Variable Rate and the Bank of England Base Rate, to the end of the

mortgage term.

However, this is not how it was sold to me. 

Seems transparently clear with nothing hidden. 

nickpick79

The question is just, why would anybody sign up to a mortgage that has rates moving only upwards but not downwards with BOE rates? This is what the product effectively is.

csgohan4

nickpick79 said:

The question is just, why would anybody sign up to a mortgage that has rates moving only upwards but not downwards with BOE rates? This is what the product effectively is.

The person who signed the mortgage offer is responsible. If the applicant did not understand at the time, the time to ask was before they signed. Signing it and complaining afterwards without reading and screaming foul play won't get much sympathy with the FCA,

Look at the interest only Mortgage threads on here screaming foul play when they didn't have repayment vehicle in place despite being quite clear in their t+c what a interest only mortgage product is. 

nickpick79

A product that tracks an imaginary rate seems to be an unfair product. Has nothing to do with the terms and conditions. Never mind, I'll just cancel the whole thing and see how far I get with complaining and court. Definitely worth trying. It's like insurances, they are also missold and consumers occasionly win.

dunstonh

Looks like they can do whatever they want according to the offer document. However, this is not how it was sold to me.

Pretty much they can within reason.

Also historical behaviour does set a precedence in my view.

Your view is irrelevant.  What matters is law and regulatory positions.   

Complaint, financial ombudsman and then take them to court. Just for the sake of it. It’s also a great learning experience. 

And a costly experience when you lose your case in court.


The question is just, why would anybody sign up to a mortgage that has rates moving only upwards but not downwards with BOE rates? This is what the product effectively is.

The question is just, why would anybody sign up to a mortgage that has rates moving only upwards but not downwards with BOE rates? This is what the product effectively is.

You bought it, you tell us. However, if that is the extent of your argument in court then you are doomed for failure when they give all the examples of when it fell. You have still failed to give us where they have breached the contract terms.

It's like insurances, they are also missold and consumers occasionly win.

Do you know how rare that actually is?