Egg SVR mortgage increased

newlifeahead

I received a letter this morning from Egg my mortgage provider to say that they were going to increase the interest rate on my standard variable mortgage from 6.54% to 6.79%.

I only had a letter 26 days previously to say that it had changed from 6.79% to 6.54%.

I must admit I didn't even realise what kind of mortgage I had:o I thought that the 6.79% was about normal. I was so wrong about this .

I finally managed to get through to Egg. (they are extremly busy today) I have been able to go onto their tracker mortgage which is 0.75% above the BOE'S 5%. I was quite worried about this whole process and didn't think it would be so easy to change to a new product. No arrangement fee, no application form to complete, just need to sign something and send back when it comes:T .

My next payment will be £420.33 then will change to £393.11 in June. Great.... I should have done this ages ago. Never mind we live and learn...

aris

I noticed this too. It beggars belief that they would send a letter increasing their SVR the same week that the bank of England lowered the base rate.

I'm glad to hear that you can easily change to the tracker - I will be doing so tomorrow.

newlifeahead

Hi aris

Yes this was easy to do. The main problem was getting through to them. I was held in a queue for 15 mins before they answered and this was the 4th attempt.

Would be a good idea to change while we can. They may start to charge or stop people from changing because they will be losing out.

Good luck

wymondham

I'm suspicious, why would Egg actively encourage people to switch to a tracker - all fee free? - i can't see what's in it for them, but there must be something!?

I don't believe banks ever do anything out of the kindness of their heart alone!

poppy10_2

These days a lots of fixed rates are actually more expensive than SVR, rather than being discounted.

This is a return to the way things were in the 90s before the arrival of easy credit - you paid more for a fixed rate in return for the security of knowing your interest payments would not change during the fixed period.

newlifeahead

I agree with you. That's why I think it is better to change sooner rather than later. When they start to see most people moving I am sure they will try and cash in on it.

What I do lose from changing is the 6 months payment break and the ability to withdraw any over payments. Souldn't be a problem for me as I have never made any overpayments and I already took a payment break when I was on maternity leave in 2005. The year I had my lightbulb moment.

I will be saving £27 per month which is a benefit for me. Looks like they are not going to change the SVR according to the BOE anymore as they are trying to create some money from somewhere. Everytime the interest rate went up and down the rate used to change accordingly now they are putting the rate up when the Bank of England are putting their interest rate down.
It sound to me that if most people are on the tracker rate they are paying less in interest so the customers that are on the SVR are having to cover this by paying more. (this is just my thoughts)

aris

I don't think they _want_ people to move to the tracker. I think this was a major screw-up by someone. They scored a huge own-goal by INCREASING their SVR the same week that the BoE DECREASED the base rate. If they had just left it alone, most people would not have noticed.

Talk about morons.

aris

Ok, I spoke with egg (took a while to get through), and they are sending me the paperwork too.

Apparently they do not sell an SVR product any more - just the offset tracker. Downside as mentioned before is there are no payment holidays or drawback of any overpaid funds. I can still over-pay in lump sums of 500 pounds or more, or smaller amounts via direct debit every month.

The drawback feature might be a bit of a downside - we had planned to do an extension in the next several years - but if/when that happens i'll look at all the options including re-mortgaging somewhere else.

So either this was a monumental marketing blunder, or they did it to move people off the defunct SVR product. Either way, i'm moving and saving money.

wolvesinwales

Just been on the phone to Egg for nearly an hour, the first people i spoke to would not budge and had a prepared statement to read out. I said i wanted to speak to someone about other offers and was put through to another department who offered me the tracker deal which will save me over £50 compared to what the rate was going to be after the increase.
Although overpayments are not there for drawback as on my original deal they do a linked savings account that does the same job basically so i have asked for details.
Many thans to OP.

newlifeahead

Good to see that people are changing before Egg put an end to it or start charging.

I must admit that if they had left the change for a few weeks I wouldn't have noticed or done anything about it.

This is one mistake I am glad they have made... Thanks Egg:beer:

AndrewRH

Can you clarify? I have the "Egg Saver Mortgage" product from them since 26 Sept 2002. This is the offset product where any money in the linked "savings" account from them is used to offset the interest paid on the mortgage.

They told me in 2002 that the rate would never be more than 1% above the BOE rate (now its 1.79% above). And that I could change providers without any penalty.

Is this the product you guys are referring to? What is the product you have switched to? Does it have the same offset system but at a lower mortgage interest rate?

Thanks,

~Andrew~
p.s. my letter about the interest hike was dated 29 March but I only received it today, 19 April!