Coventry Building Society NOT cutting rates!

davidmcn

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.

That's what every product which isn't actually a tracker (or a fixed rate) is.

nickpick79

Yea I guess you're right. No big deal. Should be out of that mortgage by the end of the month.

Thrugelmir

nickpick79 said:

Yea I guess you're right. No big deal. Should be out of that mortgage by the end of the month.

Next time read the terms and conditions more carefully. 

Glover1862

nickpick79 said:

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. 

I've not had a formal reply but this is what i expect, cost of funding I assume has gone down and they've reduced savers rates, they didn't include the line that they'll take the opportunity to increase their margin as well! 

Yeh, no ERC and flexibility, but we did pay a premium for that , it certainly is not free. The response is, accept it or P**s off, fair enough!!
Apart from a few member who are SVR, more members are negatively impacted, they are looking after themselves not members, again fair enough, but don't come across as some "ethical" interest of the members organisation.
 

dunstonh

I've not had a formal reply but this is what i expect, cost of funding I assume has gone down and they've reduced savers rates, they didn't include the line that they'll take the opportunity to increase their margin as well! 

The net interest margin is at historic lows.   So, your assumption is almost certainly wrong.  As is your assumption that they solely fund their mortgages from savers.   

Coventry lent £42.2bn in mortgages and has £36.2bn in savers.  It paid on average 0.65% higher to savers than the market average.   So, its clear that it is funding a good chunk of its mortgage book from multiple sources.

Thrugelmir

With 1:7 mortgage holders already having applied for a payment holiday. Lenders are having to monitor capital positions closely. 

WherethereisaWill

I am still holding the mindset that the Flexx product needs to perform with certain characteristics to their tracker product and that is the crux point. This of course does not mean immediate and identical movement in the Rates for Tracker and Flexx but it does mean a substantial reduction in the BoE base rate should see a reduction or sorts forthcoming to the Flexx product.
It should also be noted that for an equal term of x / borrowing £ of y and LTV z, the entry rate and product fees to take out these products are different between Tracker and Flexx therefore other factors are influencing the consumer on their decision to select a mortgage.
Whilst on a pure black and white old school legal basis there is no comeback to the signed contract there are a whole heap of modern day legislative angles that favour the consumer.

Stenwold

WherethereisaWill said:

I am still holding the mindset that the Flexx product needs to perform with certain characteristics to their tracker product and that is the crux point. 

No, it doesn't.

Whilst on a pure black and white old school legal basis there is no comeback to the signed contract there are a whole heap of modern day legislative angles that favour the consumer.

No, there aren't.

It's a product that isn't linked to the base rate, and therefore Coventry aren't obliged to reduce it. Using previous rate changes as precedent is a weak argument as they didn't need to reduce it then either, but they did anyway. If they've not breached the terms and conditions that you agreed to, I'm not sure what you think FOS or the small claims court can do about it?

Thrugelmir

WherethereisaWill said:

Whilst on a pure black and white old school legal basis there is no comeback to the signed contract there are a whole heap of modern day legislative angles that favour the consumer.

Takes the biscuit for quote of the day! 

csgohan4

Seems the joke of the year, people thinking Flexx products being the same as tracker products. Not sure but the name says it all.