Absolutely Disgusted with the Coventry

silvercar

I'm on a BoE base rate tracker, I've only been informed of the first interest rate drop, not the latest one.

Ronnie02

Coventry Flex products aren't directly linked to BOE base rate. They are linked to the lenders SVR which in time usually does reflect BOE rate, however they are not legally obliged to follow this. If you had a base rate tracker mortgage then that would be different, however some of these products have a minimum rate written in to their terms.

Glover1862

Ronnie02 said:

Coventry Flex products aren't directly linked to BOE base rate. They are linked to the lenders SVR which in time usually does reflect BOE rate, however they are not legally obliged to follow this. If you had a base rate tracker mortgage then that would be different, however some of these products have a minimum rate written in to their terms.

They are not linked to the lenders SVR otherwise they would have reduced as CBS have reduced their SVR by the full .65%.The Flexx for term is not linked to anything.

The rate has been lower previously so this particular reduction is nothing to do with anything written into the contract, they have simply decided not to pass on the reduction this time, which they are perfectly entitled to do,  however the increased rates were passed on very rapidly.

As mentioned best to just remortgage or Product Transfer as the Flexx comes with no ERC, no point only getting the increases which will hurt more as you’ve not benefited from the decreases.

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.

csgohan4

BoutTime said:

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.

All irrelevant

What matters is what appears in your T+C, Whether they reduced your rate or not, they do not have to follow BOE

Your complaint will likely fail with the ombudsman. 

Btw those rates are 50% better than my mortgage rates

dunstonh

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.

Not uncommon when you use an interest rate that is not linked to the Base Rate.

I've complained to them.

...stating that you failed to understand your mortgage and its their fault?

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.

When the net interest margin is higher, you expect changes to somewhat link.  When the net interest margin is lower, you do not.

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

...and buy a product that matches what you want.  Don't buy a product that doesn't match what you want and then moan that it is the provider's fault that its not doing what you want.

csgohan4

dunstonh said:

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.

Not uncommon when you use an interest rate that is not linked to the Base Rate.

I've complained to them.

...stating that you failed to understand your mortgage and its their fault?

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.

When the net interest margin is higher, you expect changes to somewhat link.  When the net interest margin is lower, you do not.

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

...and buy a product that matches what you want.  Don't buy a product that doesn't match what you want and then moan that it is the provider's fault that its not doing what you want.

Ultimately the poster is kicking himself for not going on a tracker now that the rates are so low and finding a way to blame the lender for their own inability of reading their own T+Cs.  Noone could have predicted the interest rate would be this low

Am I annoyed I am not on a tracker rate, no because it was the right product for me at the time. No one has a perfect crystal ball to predict when world changing events will happen

Glover1862

BoutTime said:

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.

CBS have had plenty of cheap BOE funding, £4.2 billion in 2018 I think, no doubt they will take more at 0.1%, yet it's us who need to subsidise the ones on higher rates, savers have had their rates slashed so not helped them either. Yes, I know it's not in the T&C that we are entitled to a reduction but neither are those on SRV and Privilege rates, both still had reductions, I'd question the fairness of that, remember the lower rates were offered to us as they viewed us as low risk ie typically 50% LTV, they weren't just offered out of goodwill.  Saying they now only want to help members on higher rates directly contradicts their aim to be fair to ALL members.    

I think quite a few customers will be moving or finding other ways to mitigate, I'm on a offset Flexx so I'll transfer additional money into the offset saving account, by the end of the year my saving will match my mortgage, hence no interest to pay, this was always the long term plan I just need to bring it forward, it's money I had intended to use in the economy but won't now. 

BoutTime, you could consider something similar, CBS have a Offset 5 year fix with NO product fee at a rate of 1.85%, you could product transfer to that, when you get your endowment, place it in the linked savings account, that way you'll pay no interest if the savings and mortgage balance is equal, you'll have access to all your endowment money, if you carry on paying at 0% interest you'll pay down the mortgage quickly and still have the savings balance. THIS IS NOT PROFESSIONAL ADVICE BY THE WAY!!!
   

BoutTime

Glover1862 said:

BoutTime said:

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.

CBS have had plenty of cheap BOE funding, £4.2 billion in 2018 I think, no doubt they will take more at 0.1%, yet it's us who need to subsidise the ones on higher rates, savers have had their rates slashed so not helped them either. Yes, I know it's not in the T&C that we are entitled to a reduction but neither are those on SRV and Privilege rates, both still had reductions, I'd question the fairness of that, remember the lower rates were offered to us as they viewed us as low risk ie typically 50% LTV, they weren't just offered out of goodwill.  Saying they now only want to help members on higher rates directly contradicts their aim to be fair to ALL members.    

I think quite a few customers will be moving or finding other ways to mitigate, I'm on a offset Flexx so I'll transfer additional money into the offset saving account, by the end of the year my saving will match my mortgage, hence no interest to pay, this was always the long term plan I just need to bring it forward, it's money I had intended to use in the economy but won't now. 

BoutTime, you could consider something similar, CBS have a Offset 5 year fix with NO product fee at a rate of 1.85%, you could product transfer to that, when you get your endowment, place it in the linked savings account, that way you'll pay no interest if the savings and mortgage balance is equal, you'll have access to all your endowment money, if you carry on paying at 0% interest you'll pay down the mortgage quickly and still have the savings balance. THIS IS NOT PROFESSIONAL ADVICE BY THE WAY!!!
   

Glover1862 said:

BoutTime said:

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.

CBS have had plenty of cheap BOE funding, £4.2 billion in 2018 I think, no doubt they will take more at 0.1%, yet it's us who need to subsidise the ones on higher rates, savers have had their rates slashed so not helped them either. Yes, I know it's not in the T&C that we are entitled to a reduction but neither are those on SRV and Privilege rates, both still had reductions, I'd question the fairness of that, remember the lower rates were offered to us as they viewed us as low risk ie typically 50% LTV, they weren't just offered out of goodwill.  Saying they now only want to help members on higher rates directly contradicts their aim to be fair to ALL members.    

I think quite a few customers will be moving or finding other ways to mitigate, I'm on a offset Flexx so I'll transfer additional money into the offset saving account, by the end of the year my saving will match my mortgage, hence no interest to pay, this was always the long term plan I just need to bring it forward, it's money I had intended to use in the economy but won't now. 

BoutTime, you could consider something similar, CBS have a Offset 5 year fix with NO product fee at a rate of 1.85%, you could product transfer to that, when you get your endowment, place it in the linked savings account, that way you'll pay no interest if the savings and mortgage balance is equal, you'll have access to all your endowment money, if you carry on paying at 0% interest you'll pay down the mortgage quickly and still have the savings balance. THIS IS NOT PROFESSIONAL ADVICE BY THE WAY!!!
   

Thanks for the balanced opinion. Much appreciated. To be told by some on here I’m kicking myself for not taking out a tracker, or that my rates are half of what there’s are is irrelevant and inaccurate. I didn’t want a tracker as I didn’t want to have to remortgage every few years. And my rates are low because my LTV is also low. It’s the simple carrot on the stick to get you onboard at an attractive rate. My biggest issue is the likelihood that once the BOE rate goes back up they will push my rate up too just as before. So I’ll be paying more than I ever was. All they are doing is increasing the delta. Thanks again.

BoutTime

csgohan4 said:

dunstonh said:

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.

Not uncommon when you use an interest rate that is not linked to the Base Rate.

I've complained to them.

...stating that you failed to understand your mortgage and its their fault?

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.

When the net interest margin is higher, you expect changes to somewhat link.  When the net interest margin is lower, you do not.

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

...and buy a product that matches what you want.  Don't buy a product that doesn't match what you want and then moan that it is the provider's fault that its not doing what you want.

Ultimately the poster is kicking himself for not going on a tracker now that the rates are so low and finding a way to blame the lender for their own inability of reading their own T+Cs.  Noone could have predicted the interest rate would be this low

Am I annoyed I am not on a tracker rate, no because it was the right product for me at the time. No one has a perfect crystal ball to predict when world changing events will happen

I’m not kicking myself at all. I knew what I was getting. I also asked the broker about this very thing when taking the mortgage. Historically The Coventry have tracked the BOE rate with their Flexx for Term products. Both up and down. Like I was told at the time, if they didn’t then customers would loose confidence and transfer away. Ironically this is what I will likely do next year.