MSE News: Mortgage blow as building society hikes SVR

A question about : MSE News: Mortgage blow as building society hikes SVR

This is the discussion thread for the following MSE News Story:

Skipton will up its standard rate by a whopping 1.45 percentage points from March, leading to huge repayment rises...

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Mortgage blow as building society hikes SVR

Best answers:

• Trying to push more people onto Trackers, before the Base Rate goes up ?
• A whopping 4.95%?
  Hardly whopping is it Guy? Did you work for The Sun in a previous life. Did you mean Wapping?
  4.95% isn't described as whopping when applied to savings rates. Many savings accounts earn less than inflation i.e., you lose money by saving and pay tax on the interest.
  Sensationalism adds nothing to MSE.
  GG
  ETA: Sorry, it was The Daily Mail. Must be an election coming up.
  ETA2:
  Quote:
• It's funny how perceptions change over time. Back in 1990, the 15.4% mortgage rate prevailing that year was definitely whopping but was softened somewhat by the 25% mortgage interest tax relief available on the first Ј30,000 of the mortgage. In those days interest rates moved up or down by 1% at a time which was hardly considered whopping!
  Fast forward 20 years with mortgage debt in the stratosphere and yes, a 1.45% increase against no corresponding increase in base rate does seem pretty whopping.
  These are strange times that we are living in where the range of mortgage rates that people are paying can be anywhere between 0 and 7%.
  Compared to Nationwide's BMR of 2.5% the rate of 4.95% could be called whopping. It all depends on your point of reference.
• Skipton BS have cited clauses in their 3% above BoE rate guarantee that talk about being able to remove it in "exceptional circumstances". What I'm wondering is whether Nationwide has some similar clauses, until now I presumed they were bound to their 2% guarantee.
• ETA = Edit to add
  I'd be surprised if any lender didn't have a clause that allowed them to protect their business in exceptional circumstances. To avoid invoking such a clause and receiving the bad press that it will attract they try to get people to move to other products.
  GG
• It is a strange day indeed when mortgage rates are more closely linked to savings rates than BoE rates. I guess history will find a plethora of thesis on this time period in our financial lives but I do not see any "normality" to decisions until we get base rates back up to around 4% or so followed by a period of stability where we see a tightening of spreads over base in the mortgage market and the return of sub 200 basis points margins over base for regular mortgages.
• Anybody who took out a mortgage and did not budget for rates over 5% was playing with fire. Whilst it is not nice, I have little sympathy for anyone that says they cannot afforrd the rise.
• I don't have much sympathy for anyone who didn't factor in rates of a lot higher than 5%.
• I do worry, when building societies feel able to offer 5% fixed bonds/ISAs for five years, that they are going to be paid for by those who can't remortgage.
  If people struggle to pay back their mortgages then the credibility of the lending institution takes a dive. The only way win back savers and funds is to increase headline savings rates. This is then passed on, making the SVR mortgage rate higher etc.
  J_B.
• I think that things must really be bad at Skipton as this simply leads one to avoid skipton as a port of call for remortgaging as bank and building societeis are built on Trust and if you have to resort to an underhand small print to get out of a deal then people best leave thm alone
• Well it obviously wouldn't work if the general populace knew for certain when the Base Rate was going up, so they have to make Trackers appear attractive for a while beforehand...