BOE Base Rate Cut by 0.25 to 5.5%

saxmund

I've always taken the view that by taking out a fixed-rate mortgage you're gambling with the mortgage lender on whether rates will go up or down. And I know who has the most knowledge about financial markets and likely changes in rates... and it isn't me. So I've always gone with a tracker.

penguin83

Woohoo - got a letter this morning - GMAC have reduced our interest rate from 01/01/08 - better than nothing! x

saxmund

I'm still waiting on C&G, but as I have a tracker I suppose it isn't so important as I know it's going to come down by 0.25% next month.

Dan_Collins_2

I had an email stating that 31 lender are pulling SVR's down. However most lenders have increased the loading on BOE trackers to beat the drop, so unless you are ina tracker you may not feel the drop.

Also GMAC and coming back really hard and will be going for it again in the new year!

MisterC_2

Stevenfisher

Your comments about Standard life are an echo of mine. I am on a 2 year descounted variable, and was subject to their 0.15 penalty earlier this month and when I speak with them now they are still not sure if they will be passing on the 0.25 following the BoE cut. SO in effect we are currently having a 0.4 imposed on us.

To say not impressed is gross understatement, cant wait till my 2 years is up to switch to another lender.

Nationwide and Halifax have cought my eye now with them reacting so swiftly to the cut. :T

lisyloo

Your comments about Standard life are an echo of mine. I am on a 2 year descounted variable, and was subject to their 0.15 penalty earlier this month and when I speak with them now they are still not sure if they will be passing on the 0.25 following the BoE cut. SO in effect we are currently having a 0.4 imposed on us.

It sounds as though you both signed up to a mortgage that was "whatever rate standard Life choose". Surely you knew this?
It wasn't fixed or didn't track the base rate.

Nationwide and Halifax have cought my eye now with them reacting so swiftly to the cut.

Beware. You are now talking about changing from "whatever standard life want" rate to "whatever halifax and nationwide want" rate.
That doesn't necessarily sounds like a sensible switch to me.

What about a fixed or BOE tracker?
Then you wouldn't have this milarky.

Dan_Collins_2

SVR do not have to follow any rate other than that chosen by the lender!

MisterC_2

I foolishly believed that my discounted variable rate was just that, i.e. it would go up and down with BOE rate changes. I really in my heart of heart didnt believe they would rapidly increase it when BoE went up, not reduce it when it went down and impose penalties when they felt like it.

Very hacked off with Standard Life. :mad: and myself for not reading the small print that they can make the rate whatever the &*£@ they want to.

MisterC_2

lissyloo, yes my next mortgage will be a tracker (and not with standard life).

lisyloo

I really in my heart of heart didnt believe they would rapidly increase it when BoE went up, not reduce it when it went down and impose penalties when they felt like it.

You might have seen in the papers that there is a "credit crunch" going on.
The rates the banks are having to pay have gone up a LOT (they pay LIBOR rate not BOE rate).
There are unusual circumstances.

You DO need to be aware of what you sign up to, so try to learn from this.
Normally this wouldn't have happened but when push comes to shove and times are hard then it does come to what you signed.

If you sign up to a banks SVR then as another poster said, they can set it at whatever they want, so you need to be aware of contractually what you are signing and not just what "normally" happens because sometimes (like now) "normally" goes out the window.