Britannia BS - worst mortgage offers ever?!!

meanmachine_2

Something tells me Britannia don't really want people to borrow money off them, at least not on short term fixes...

They're now charging customers £499 to pay MORE than their SVR (which costs nothing!!).

It really is a crazy market out there...

7.59% Fixed for two years, followed by our Standard Variable Rate, currently 6.80% variable for the rest of the mortgage.

ManAtHome

Maybe if they improved their crappy savings rates they'd have a few quid in the piggy bank. They had a good run as "mortgage provider of the year" - surprisingly they never had a "savings provider of the year" award...

MarkyMarkD

It doesn't make sense for anyone to choose these fixed rate products. They can get fixes cheaper elsewhere, but they'll pay far less as meanmachine points out simply by opting for the SVR without any fees.

sarkin

I believe this is the polite way of saying we are closed for business.

Gorgeous_George

Maybe you are missing the point.

Take their SVR by all means but this isn't fixed. Maybe Britannia expect their SVR to increase sharply over the next year or two. Maybe their fixed rate offerings are better value than first appears.

My BR offset tracker at BofE BR+0.74% looks good value at the moment. Currently in the process of siphoning savings to ISAs as the rates are higher.

GG

Conrad

Better get used to all this folks. Lenders made slim margins in the past on mortgages (C & G area manager told me they made just £200 profit on every mortgage over its life). Now they've woken up and realised all along they did'nt need to be accepting such margins.

No doubt the great British public and the non real world muppets at Which magazine will deem this another sign of 'rip off britain', whilst at the same time convieniently forgetting when it comes thier own personal remuneration they seek top dollar!

We all say we want everything for less, but lets be mindfull of what that means for call centre workers wages (could be your child one day) and clothes manufacturers Indian employee wages.

meanmachine_2

Gorgeous_George wrote: »

Maybe you are missing the point.

Take their SVR by all means but this isn't fixed. Maybe Britannia expect their SVR to increase sharply over the next year or two. Maybe their fixed rate offerings are better value than first appears.

I'm not missing the point. The point is, as others have suggested, Britannia are effectively saying no to new business.

They either can't access the funds, or don't want to lend to people who will come up for remortgage in two years' time.

And that's that.

Why would anyone want the "security" of fixing at a level way above anything else? That's insanity, particularly at a time when base rates are steady or predicted to fall.

Gorgeous_George

The high fixed rate factors in the risk that Britannia may not be able to borrow cheaply for the term of the deal. They remove the risk with the SVR.

Simple as that.

GG

meanmachine_2

Fair point.

I can understand why Britannia might need to offer fixes at this ridiculous rate, but surely the take up is going to be absolutely zero.

If anyone had told me 12 months ago that a leading BS would be offering a two year fix at more than 7%, at a rate ABOVE their SVR even I would have struggled to believe it.

Strange times...

MarkyMarkD

GG

What you are saying sounds OK in theory, but is wrong in practice.

Mortgage lenders can fund fixed rate loans WAY cheaper than variable rate loans at the moment. That's why most lenders are pricing fixed rates relatively cheaply and trackers relatively expensively.

That's also why ING have withdrawn their tracker and made their whole portfolio fixed now.

It makes no sense for Britannia to be doing this other than as a means of saying "no" to all new business. Nobody rational would buy these products.

poppy10_2

This used to be the way fixed rate deals worked 10-15 years ago. You paid a higher rate for the fixed period, in exchange for the security of knowing your repayment wouldn't be changing during that time. It's only recently that discounted fixed rates become the rule.