competition - lowering rates

payless

I don't like posting lenders rates ( in case as seen as a recommendation), so won't BUT

Some recent rates drops might be starting a bit of a price war -- just had forward notice from a big lender for a new rate end of this week - Looks like the big lenders are begining to start undercutting cutting each other , so would expect even more - especially looking for mid- high value remortgages ( still some fees )

lisyloo

Hi Payless,

Theorectical question.
I am leaving A&L for Britannia in a few months.
The switch is only costing me about £50 in total (yee haaa).

If I found a better deal and pulled out of Britannia then what would the consequences be?
Would Britannia get nasty about the free survey etc?

If so then I can possibly just switch once I'm signed up.
Am I better off doing this?
I believe it's £110 to leave and there are no penalties.

Cheers
Lisa

meanmachine_2

payless wrote:

I don't like posting lenders rates ( in case as seen as a recommendation), so won't BUT

Some recent rates drops might be starting a bit of a price war -- just had forward notice from a big lender for a new rate end of this week - Looks like the big lenders are begining to start undercutting cutting each other , so would expect even more - especially looking for mid- high value remortgages ( still some fees )

Is this simply because of the competitive nature of the mortgage business? Is it as a consequence of a drop in mortgage lending? Or is it simply due to an expected (but not guaranteed) drop in int rates?

Just wondered what your view on this is.

payless

my personal view ( and therefore couyld be totally wrong) is that whilst expected rate drops have lead to some lowering of rates , the round of regular changes ( and I expect a few more) is down to lenders keen to keep/ attract business even if this is on a a much lower margin, due to things such as
1. Retaining / increasing market share ( image ?)
2. Keeping staff employed
3. Hoping for future profits from these customers ( SVR or cross sell)

The ( now higher ) admin fees go some way to covering the costs , and may mean smaller mortgages don't get such a great deal on swapping , although again that should not stop people looking around

meanmachine_2

Thanks for that.

It seems to me that lenders have expanded massively over the last 10 boom years, and are now struggling to maintain turnover.

Still, it's good for homeowners - in the short term, at least.

payless

lisyloo wrote:

Hi Payless,

Theorectical question.
I am leaving A&L for Britannia in a few months.
The switch is only costing me about £50 in total (yee haaa).

If I found a better deal and pulled out of Britannia then what would the consequences be?
Would Britannia get nasty about the free survey etc?

If so then I can possibly just switch once I'm signed up.
Am I better off doing this?
I believe it's £110 to leave and there are no penalties.

Cheers
Lisa

As you are aware the deal in question was a direct only product, so not aware of what you signed for, I am aware that some lenders do have a fee to cover aborted legal cases- signed directly with firm involved , ( some actually have a ties to these benefits- but thats usually clear upfront) but can't say I ever seen a free val , fee clause recently- and guess if in place should be detailed in illustration - perhaps ask ?

so if moving to yet another deal ( not saying thats best!) I would have thought ( although check) cheaper to do so prior to planned change

Also might issues with swapping very quickly again anyway ( deeds / credit searches )

The recent drops do seem to be focuses towards the fixed rates more , margins on trackers are stable , this may actually seem to go against my above post , but still thats my personal feeling

muzer

Payless - without 'recommending' do you see anyone beating the Halifax offer posted earlier (4.29% for two years) being bettered in the near future?

payless

I actually was writing my post, as the one you mentioned was posted - guess we rec'd emails at same time

but I am very careful in what I post, so slower

Its a competitive deal ( although high fees , so not so good for small amounts)

I suppose that lender can afford to undercut others, on a loss leader - But would not be surprised if others try and protect their own market share