Who owns my mortgage debt?

iain1970

On the assumption that my outstanding Offset Mortgage balance with RBoS is exchanged for Bonds from the BoE, who owns the unpaid part of my house? After all, my debt with RBoS would be paid off.

Should I be able to repay the BoE at the base rate?

Can RBoS sell my debt on and still expect to reap the extra they charge me in interest (as far as I know it's 6.45%)?

Or am I looking at this far too simply?

foxwales

You have a mortgage agreement with RBoS at a rate of 6.45%, i don't see how you can think you can adjust your interest rate when you singed the agreement at 6.45%????

silvercar

iain1970 wrote: »

On the assumption that my outstanding Offset Mortgage balance with RBoS is exchanged for Bonds from the BoE, who owns the unpaid part of my house? After all, my debt with RBoS would be paid off.

Should I be able to repay the BoE at the base rate?

Can RBoS sell my debt on and still expect to reap the extra they charge me in interest (as far as I know it's 6.45%)?

Or am I looking at this far too simply?

Continueing your questions to their illogical conclusion, does that mean your house is part owned by the government / taxpayer/ country? Does that make your home a shared ownership property? council house?

iain1970

foxwales wrote: »

You have a mortgage agreement with RBoS at a rate of 6.45%, i don't see how you can think you can adjust your interest rate when you singed the agreement at 6.45%????

My deal with RBoS is a variable rate, not at a pre-determined %age, so it could be 50% or 0.05% tomorrow, depending on which way the wind is blowing, it has nothing to do with the base rate, as we're seeing.

But my debt would now be with the BoE and their rate is 5% to all those who they lend money to isn't it? They would have lent me the balance on my mortgage, so it should be at 5% or whatever the base rate is surely.

iain1970

silvercar wrote: »

Continueing your questions to their illogical conclusion, does that mean your house is part owned by the government / taxpayer/ country? Does that make your home a shared ownership property? council house?

Like No.10? :rolleyes:

Actually, that would apply to all mortgaged homes anyway with shareholders etc etc funding the loan made by the bank.

That route of lending may well have been replaced by BoE lending, so there are no 'commercial' reasons for the extra interest charged on the loan above base rate.

TighterThanTwoCoatsOfPain

if you're not on the wind up, then you're deal is to pay the RBoS rate as set by them. How they finance the the funds has nothing to do with it.

Short answer... no.

foxwales

Is your mortgage agreement with RBoS?

If it is, then they can set the variable rate depending on what rate they apply above the BoE base rate.

Just because the BoE is lending banks money; doesn't mean they are taking ownership of the debt.

Debt_Free_Chick

Nothing changes. The bank will simply swap some of its existing assets for Government Bonds. It has no impact on your mortgage. Think of this way ... the source of the original funds lent to you was not known and was irrelevant at the time - it was RBoS money, even if they in turn had borrowed it from another lender.

Now, that other lender is simply the Government, but this does not filter down into the precise terms of your mortgage.

It's about restoring confidence in the mortgage market.

iain1970

Oh well. It was a question I needed answering as it's been bugging me all weekend.

Thanks for the info.

Debt_Free_Chick

Just back to your original post ... your mortgage debt has not been sold on. This is simply a way of getting more secure assets onto RBoS balance sheets. It's as much about boosting shareholder confidence as well as the Public's confidence in the security of lenders.