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The article isn't really telling the whole truth. Some of the SVRs do track base rate, and right now many people are sitting pretty on them as they are paying 2.5% which is better than pretty much anything out there with the flexibility to switch whenever they like. And as interest rates don't seem to be moving at all, I can't see many people rushing to get a new deal.

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Guest eight

The article isn't really telling the whole truth. Some of the SVRs do track base rate, and right now many people are sitting pretty on them as they are paying 2.5% which is better than pretty much anything out there with the flexibility to switch whenever they like. And as interest rates don't seem to be moving at all, I can't see many people rushing to get a new deal.

That's where we're at, paying 2.5% on approx. £27K I/O mortgage. One week's tax credits actually covers the interest payments. Gotta love this Government largesse.

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That's where we're at, paying 2.5% on approx. £27K I/O mortgage. One week's tax credits actually covers the interest payments. Gotta love this Government largesse.

Out of interest why IO? you'd have that paid off pretty quick paying capital too.

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The article isn't really telling the whole truth. Some of the SVRs do track base rate, and right now many people are sitting pretty on them as they are paying 2.5% which is better than pretty much anything out there with the flexibility to switch whenever they like. And as interest rates don't seem to be moving at all, I can't see many people rushing to get a new deal.

No, they're known as BoE base rate trackers. But they are variable, which is confusing. SVRs are set by the mortgage lender so they're free to set it to whatever they want. Historically they tended to track the BoE rate but right now, when it's at a joke 0.5%, they don't.

Edit: The FSA should really define what SVR, Fixed rate etc. mean and make the banks stick to it, but that would be 'inflexible' and 'smother competition', i.e. not give the banks room to rip you off in the small print.

Edited by efdemin

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Guest eight

Out of interest why IO? you'd have that paid off pretty quick paying capital too.

Well there's an endowment policy too but to be honest I disregard that as a means of repaying the mortgage. Instead just saving in ISA's prefering the flexibility of having the cash rather than overpaying the mortgage, under the current circs. Can always change that if rates go up.

The thing that really helped us, of course, was buying in 1999 just before the madness really got going. Not having a massive mortgage (or rent) to service gives you so many options in life it's untrue.

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Guest eight

No, they're known as BoE base rate trackers. But they are variable, which is confusing. SVRs are set by the mortgage lender so they're free to set it to whatever they want. Historically they tended to track the BoE rate but right now, when it's at a joke 0.5%, they don't.

Our C&G SVR claims to be BOE + 2% for life. It's pretty equivocal, I don't see how they could ever wriggle out of it.

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That's where we're at, paying 2.5% on approx. £27K I/O mortgage. One week's tax credits actually covers the interest payments. Gotta love this Government largesse.

Mortgage @ 2.5% and a tax free ISA at 3.75% means I'm making.

With NS&I looking like paying around 6% tax free over 5 years I'm tempted to ask building society for another £30K to get some for my kids.

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No, they're known as BoE base rate trackers.

They are not trackers. A tracker is normally of fixed duration, whereas these are ongoing.

Nationwide have BMR which is BoE based and SMR which isn't. To get BMR you had to have been on a product before April 30 2009. BMR is 2.5% and SMR is 3.99%. I guess that when they set up the BMR they never expected rates to hit 0.5%, so when they did they introduced the SMR.

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Our C&G SVR claims to be BOE + 2% for life. It's pretty equivocal, I don't see how they could ever wriggle out of it.

For you personally perhaps they can't, but a quick perusal of the C&G mortgage rates shows that you must have taken your mortgage out before June 1 2010. Because after that you would have gone onto their 'Homeowner Variable Rate (HVR)' which is currently 3.99%, with no guarantee to track the BoE rate.

So my advice stands - be sure to get an explicit BoE tracker otherwise you are liable to the mortgage company changing the terms of name of their variable rate product.

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the flexibility of having the cash rather than overpaying the mortgage

Overpayments go into an overpayment reserve you can draw on at any time. The benefit of having the cash would be to pop it into NS&I which would pay far more than your interest payment on the cash.

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Guest eight

Mortgage @ 2.5% and a tax free ISA at 3.75% means I'm making.

With NS&I looking like paying around 6% tax free over 5 years I'm tempted to ask building society for another £30K to get some for my kids.

Apart from my self imposed ban on ever taking on any more debt, that sounds like a plan. I think the key is the amounts involved. When we took out a £28K mortgage it seemed like all the money in the world. Even then we have struggled at times - particularly before our daughter came along. If our mortgage had been just double that I doubt we'd still be here now.

We're pretty average folks really. How "people like us" service multi £100K mortgages baffles me frankly. Same with cars; ours is about the oldest on the streets of Darlington. Hence why this site has fascinated me so much I assume.

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Guest eight

Overpayments go into an overpayment reserve you can draw on at any time. The benefit of having the cash would be to pop it into NS&I which would pay far more than your interest payment on the cash.

Whilst I'm sure you're correct, the monthly interest is currently about £70. I can't really be bothered to make much effort to mitigate it. We're not rich enough to be able to lock away cash as our "savings" have to double as contingency money in case of car, boiler etc. Not to mention in the event of wife losing well payed public sector job (I know, I know.....) we could always just sell the place and up sticks.

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be sure to get an explicit BoE tracker otherwise you are liable to the mortgage company changing the terms of name of their variable rate product.

Before rates hit 0.5% lenders did have SVRs related to BoE base rate, but they changed these pretty soon after. So the new SVRs are all decided by lenders, so they could simply decide to charge 5% over base rate if they choose. But the old SVRs can't be touched as that was part of the deal.

HSBC are the only lender offering a fee free lifetime tracker but to match the Nationwide BMR or the C&G SVR, you have to have a 60% LTV.

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Whilst I'm sure you're correct, the monthly interest is currently about £70. I can't really be bothered to make much effort to mitigate it. We're not rich enough to be able to lock away cash as our "savings" have to double as contingency money in case of car, boiler etc. Not to mention in the event of wife losing well payed public sector job (I know, I know.....) we could always just sell the place and up sticks.

I agree that messing around with low amounts is hardly worth the time and effort. I find the overpayment reserve handy to have as I have spent a lot of money on renovations and knowing that cash was lurking to cover any overspends has helped.

Edited by arrgee1991

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Guest eight

Before rates hit 0.5% lenders did have SVRs related to BoE base rate, but they changed these pretty soon after. So the new SVRs are all decided by lenders, so they could simply decide to charge 5% over base rate if they choose. But the old SVRs can't be touched as that was part of the deal.

HSBC are the only lender offering a fee free lifetime tracker but to match the Nationwide BMR or the C&G SVR, you have to have a 60% LTV.

Just goes to show how flukey we were. We only went with C&G due to a family connection with Lloyd's, and fell onto the SVR when our initial 2 year fixed rate expired and it wasn't worth paying the fees to take out a new one.

The current fiasco was obviously inconceivable just 12 short years ago - or half a mortgage term. You can never know what you're signing up for.

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Before rates hit 0.5% lenders did have SVRs related to BoE base rate, but they changed these pretty soon after. So the new SVRs are all decided by lenders, so they could simply decide to charge 5% over base rate if they choose. But the old SVRs can't be touched as that was part of the deal.

HSBC are the only lender offering a fee free lifetime tracker but to match the Nationwide BMR or the C&G SVR, you have to have a 60% LTV.

Yes, all true. I guess this is the point of the BBC piece though - people who bought in the last couple of years are going on to these high variable ('SVR', which means different things for different companies) rates once they come off the 2, 3 or 5 year deals they were on.

If you're on one of the low rates tracking the BoE rate you're laughing.

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Guest eight

If you're on one of the low rates tracking the BoE rate you're laughing.

Metaphorically speaking.

I'm actually doing something more akin to how a fighter pilot might cross himself after stumbling from the smouldering wreckage and checking to find that his genitals are still intact.

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Did which add up all the fees for remortgaging fixeds every 2,3,5 years and compound these up over the lifetime of the debt? (Probably 40+yrs for many people).

Even the bloke in the article says his mtge dropped 1.5% which was probably around 30%!

The house always wins - especially when it's a bank.

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Just goes to show how flukey we were. We only went with C&G due to a family connection with Lloyd's, and fell onto the SVR when our initial 2 year fixed rate expired and it wasn't worth paying the fees to take out a new one.

I only got my 3 year tracker that becomes BMR because it was fee free. At the time the base rate was 5%, but 6 months later it had fallen to 0.5%. I didn't really check what rate I went onto after. The only trouble is if I move I'd have to get a new mortgage and would lose the BMR. Just as well I have no plans to do so for the next ten years.

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Guest eight

The house always wins - especially when it's a bank.

Red Karma, I just "got" your avatar. Very good!

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Yes, all true. I guess this is the point of the BBC piece though - people who bought in the last couple of years are going on to these high variable

And that's what's so annoying.. the BoE keeps rates at 0.5% so savers are screwed, yet many borrowers aren't enjoying the low rates because their mortgage SVR (sometimes called the PVR product variable rate) is at near 2007 levels.

And the BoE can't raise rates because that would push rates higher still.

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Did which add up all the fees for remortgaging fixeds every 2,3,5 years and compound these up over the lifetime of the debt? (Probably 40+yrs for many people).

The fess are the biggest con of all. When I have got fixed or tracker deals I have been fortunate enough to get them fee free. I deliberately choose Portman (now defunct) because they didn't charge fees and had the best rates. The nationwide even bunged me a few quid when they took on the mortgage :lol: My mortgages have never been more than £100K, so adding another £1K on in fees (some have fees of £2K for a 2 year mortgage) every few years is madness.

Edited by arrgee1991

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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