Coventry Building Society NOT cutting rates!

Glover1862

csgohan4 said:

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

I've said right from my 1st post that I KNEW the Flexx  was NOT a conventional tracker, all I'm asking, was the decision fair, ethical and in the spirit of the recent BOE cuts according to CBS? They claim to be an ethical lender who work for the benefit of all members, as a long term member I think it's reasonable to ask this question, I wouldn't say that was particularly a candidate for "Joke of the year"

dunstonh said:

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.

When did I say their lending was solely from savers? I agree that they use multiple sources for funding but I see you didn't mention the cheap lending CBS had from the Term Funding Scheme and no doubt will continue to use with future variants of  TFS . I've no issue with them improving their margin, just be clear about it when asked and borrowers can move or mitigate future increases by other means. They've had BOE help so reasonable to expect them to pass on the reductions, they’ve certainly done no harm to their margin however low they may be, I'd still bet they have improved their margin on this product, why else would they risk upsetting a significant number of members. 

BoutTime

I've complained to them. I knew the Flexx For term rate wasn't contractually linked to the BOE Base Rate, but CBS have repeatedly used BOE rate rises to justify a rise in my own rate. The response I received is that they have to consider those paying higher rates.  From CBS...... "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. The same factors would be considered should interest rates increase".

So it seems those on lower rates subsidise those on higher rates. And my take on this response is that when rates rise they are more likely to pass on the rise to those on lower rates.

A history of the interest rate applied to our mortgage since 2017 is shown below:

BOE Base Rate 0.25%, Mortgage Rate 1.35% (1.10% above BOE Base rate)

BOE Base Rate 0.50%, Mortgage Rate 1.60%  (1.10% above BOE Base rate)

BOE Base Rate 0.75%, Mortgage Rate 1.85%  (1.10% above BOE Base rate)

BOE Base Rate 0.25%, Mortgage Rate 1.85% (1.60% above BOE Base Rate)

BOE Base Rate 0.10%, Mortgage Rate 1.85% (1.75% above BOE Base rate)

Only option is to vote with my feet when my endowment matures next year which isn't linked to this mortgage.

leeroyrhino

This is appening again with Godiva not having lowered the rate during the pandemic but increasing it again now. Anyone have any luck complaining?