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Tracker Mortgages "de-Linking" From The Base Rate

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Yes but in the meantime if you assume the loss on a repo you take a big hit. I'm surprised to be having this conversation as this is the major theme in the world for the past 3 years. This is the point of QE. "Wealth" is backed by property and we can't all suddenly say "it's worth half that but my next mortgagee is more likely to be able to stay the course".

That new mortgage of which you speak will be for less cash. That will hit the BS balance sheet. It will come out of the money they hold and they will have to adjust their books. If they are on 49% wholesale this could make them 53% wholesale. At that point you are looking at fixing it or going bust as I understand it.

This is the same kind of thing as nutters just saying "print more". The underlying real wealth is the problem and many repos call the lie on that.

Taking a loss, that is the gamble they make when lending irresponsibly on a gut feeling that house prices will forever rise with inflation with money printing with world growth and materialism......someone has to take the hit eventually.....either a slow downwards spiral or a sudden black swan moment.......the clues are there. ;)

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Yes but in the meantime if you assume the loss on a repo you take a big hit. I'm surprised to be having this conversation as this is the major theme in the world for the past 3 years. This is the point of QE. "Wealth" is backed by property and we can't all suddenly say "it's worth half that but my next mortgagee is more likely to be able to stay the course".

That new mortgage of which you speak will be for less cash. That will hit the BS balance sheet. It will come out of the money they hold and they will have to adjust their books. If they are on 49% wholesale this could make them 53% wholesale. At that point you are looking at fixing it or going bust as I understand it.

This is the same kind of thing as nutters just saying "print more". The underlying real wealth is the problem and many repos call the lie on that.

Well that is what IS being said? If banks could suspend reality they wouldn`t be raising rates? If they don`t lend out new loans they are finished? the only way to make new loans now is for house prices to crash to sustainable levels?

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So a relatively small number of people who have enjoyed 5 years + living in a house that in a free market they could not afford, just because the BoE have kept rates low at the expense of us who had the common sense to save rather than over-extend.

And they are now going to have to pay more realistic rates, because they didn't have the gumption to read the contract conditions they signed, or else didn't bother to re-mortgage in the intervening period.

A tiny, tiny crack on the way to a proper equalisation of house prices at their true market value.

Whoopy doo.

Unless the clauses were drawn to the borrowers attention then I think there's going to be a shit-storm of mis-selling and 'unfair contract terms' cases going around.

Andy

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Unless the clauses were drawn to the borrowers attention then I think there's going to be a shit-storm of mis-selling and 'unfair contract terms' cases going around.

Andy

Hopefully be a shitstorm of repos long before that..

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So a relatively small number of people who have enjoyed 5 years + living in a house that in a free market they could not afford, just because the BoE have kept rates low at the expense of us who had the common sense to save rather than over-extend.

And they are now going to have to pay more realistic rates, because they didn't have the gumption to read the contract conditions they signed, or else didn't bother to re-mortgage in the intervening period.

A tiny, tiny crack on the way to a proper equalisation of house prices at their true market value.

Whoopy doo.

A big crack in sentiment though? When everyone knows someone who can`t afford to stay in their house, the shine comes off all the property porn and ramping, and the likes of Krusty faced Kunt are seen for the lying tossers they are?

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Unless the clauses were drawn to the borrowers attention then I think there's going to be a shit-storm of mis-selling and 'unfair contract terms' cases going around.

Andy

All Trackers have a exemption clause that can be invoked if the lender has too. My HSBC Lifetime baserate Tracker +1.49% over base, taken in 2009 has a clause for decoupling from the BOE base rate in "exeptional circumstances", is the wording.

And since the month I took out the mortgage was March 2009 when rates dropped to 1/2% and they have stayed there ever since they can't really turn round now and say 1/2% BOE BR can now be considered "exceptional" !

And also I remember in 2009 you needed a minimum 40% deposit for my deal and HSBC had a big £££ war chest to nick "prime" borrowers as they were in much better chape than the other big boys (and still are). They also must have been happy with a 1.49% margin otherwise they wouldn't have sold the mortgage at that rate since it's a "lifetime" tracker so never reverts back to SVR.

I suspect certain small players have a funding issue and doubt any big boys will tamper with lifetime trackers for prome borrowers for fear of losing them to the competition who no doubt will be more than happy to offer a better deal for the right customer.

Would be worried if I was in n/e or high LTV with a great tracker from 2007 though.

M

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Barclays / Woolwich does not need to invoke any hidden clauses to push up it's tracker rate to whatever it likes.

This is because their trackers are not lnked to the BofE base rate but Barclays Bank Base Rate (BBBR). Years ago I had a Woolwich Offset Tracker and I know this was linked to BBBR (I queried it's relationship to BofE base rate at the time) and this still appears to be the case for their tracker range

http://www.barclays.co.uk/Mortgages/Trackermortgages/P1242557963484

Historically the BBBR has tracked BofE base but this is not guaranteed and Barclays can set this rate to whatever they like.

http://www.barclays.co.uk/Savings/BarclaysBankBaseRate/P1242557964824

Barclays Bank Base Rate typically follows the Bank of England Bank Rate but it is not guaranteed to do so. The Bank of England Bank Rate can go up or down and is announced by the Bank of England's Monetary Policy Committee every month.

The flipside would be that they would have to pay more interest on savings accounts linked to BBBR but a quick Google check suggests that these are no longer available:

http://www.barclays.co.uk/Savings/TrackerSavingsAccount/P1242558332064

This account is no longer available to new customers.

Could be interesting times ahead for Barclays / Woolwich tracker mortgage holders if MBS action starts a trend

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OK I am definitely a VI BofE +0.17% me

However when you sign up for a deal what ever the deal. That deal should be honoured and get out clause should not be written into the small print.

Savers Know that their money is guaranteed up to £85,000 what happens if that deal isn't honoured?

If your car is written off what happens if your car insurance doesn't pay up?

What happens when a written contract can be ripped up and thrown away?

They're not doing anything that was not in the contract.

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:lol:

Someone being repossessed from a home they were knowingly sold that was only affordable to them when interest rates were the lowest they have ever been, without doing the proper background checks re job security and available disposable income is just as much the lenders fault as the borrowers....they both had their own vested interests, that is why it came to pass......why the savers and those that knew the risks should take a hit is not quite explained, the sympathy seems to lie with the risk takers not the responsible that are sitting waiting at the side line. ;)

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Someone being repossessed from a home they were knowingly sold that was only affordable to them when interest rates were the lowest they have ever been, without doing the proper background checks re job security and available disposable income is just as much the lenders fault as the borrowers....they both had their own vested interests, that is why it came to pass......why the savers and those that knew the risks should take a hit is not quite explained, the sympathy seems to lie with the risk takers not the responsible that are sitting waiting at the side line. ;)

I`m a debt free saver who paid 350 p.m rent in 1998, and now pays 450 p.m rent (for a much bigger, better located central Edinburgh flat) and am still trying to work out why masses of people became debt serfs to "own" similar flats. It may yet come, but so far I don`t feel like I`ve taken any kind of hit?

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Lots of trackers were advertised as a "BoE base rate tracker +x.x% for the term of the mortgage"

I don't imagine there's any small print which can contradict that, and if there is there will be a mis-selling scandal bigger than PPI

I don't think this is a big story

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I`m a debt free saver who paid 350 p.m rent in 1998, and now pays 450 p.m rent (for a much bigger, better located central Edinburgh flat) and am still trying to work out why masses of people became debt serfs to "own" similar flats. It may yet come, but so far I don`t feel like I`ve taken any kind of hit?

You rent wisely in a place where rents are reasonable.......at this point in time renting is not a bad option depending.......certain parts of town the rents are a joke £1000 + for a one and a half bed place in suburbia, how can that be fair when IO get a place twice as good for half the price....somethings better change. ;)

http://www.youtube.com/watch?v=ohRbJJohv6Y

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Lots of trackers were advertised as a "BoE base rate tracker +x.x% for the term of the mortgage"

I don't imagine there's any small print which can contradict that, and if there is there will be a mis-selling scandal bigger than PPI

I don't think this is a big story

Maybe not but see post #65 re Barclays

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You rent wisely in a place where rents are reasonable.......at this point in time renting is not a bad option depending.......certain parts of town the rents are a joke £1000 + for a one and a half bed place in suburbia, how can that be fair when IO get a place twice as good for half the price....somethings better change. ;)

http://www.youtube.com/watch?v=ohRbJJohv6Y

http://www.youtube.com/watch?v=wusPksVCyLM

A<object style="height: 390px; width: 640px"><param name="movie" value="http://www.youtube.com/watch?v=wusPksVCyLM?version=3&feature=player_detailpage"><param name="allowFullScreen" value="true"><param name="allowScriptAccess" value="always"><embed src="http://www.youtube.c...ayer_detailpage" type="application/x-shockwave-flahttp://www.youtube.com/watch?v=wusPksVCyLM&feature=player_detailpagesh" allowfullscreen="true" allowScriptAccess="always" width="640" height="360"></object>ll coming tohttp://www.youtube.com/watch?v=wusPksVCyLM&feature=player_detailpagegether like a perfect storm?

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Found this on MSE. Didn't know they could do this. Although it is only a small building society with hardly any borrowers effected if it spreads could be carnage!

http://forums.moneysavingexpert.com/showthread.php?t=3911273

HSBC have no such clause, so I am not too worried to lose my BOE + 0.63% portable lifetime tracker ever. Their generous terms and conditions were the main reason I went to them. Taking a mortgage from a tiny, unknown lender is always risky, even if the initial terms might be better.

This tracker saved me already at least £500 each month compared to "normal" rates, or about £20k in the last 3 years.

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Lots of trackers were advertised as a "BoE base rate tracker +x.x% for the term of the mortgage"

I don't imagine there's any small print which can contradict that, and if there is there will be a mis-selling scandal bigger than PPI

I don't think this is a big story

No they would have to stick to that contract T&C......but there are not that many on those deals < 1% + BOE base rate, they would be wise to keep to IO and put their money into an isa at a tax free higher rate and use that as a repayment plan......they would not get extra funding at that rate and not all are portable so they may be stuck in the home unable to take their rate with them...... ;)

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They're not doing anything that was not in the contract.

TBH I haven't seen the Manchester building society contract. So my comment really is invalid.

I remember when I was looking for mortgages getting a quote from the Nationwide BS

Their tracker mortgage paper work had a box on the front page like this

key facts

tracker mortgagexxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

collar at 2.75%

It was also pointed out to me by the financial adviser

It's only if it's berried in the small print I would have a problem.

Edited by gf3

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TBH I haven't seen the Manchester building society contract. So my comment really is invalid.

I remember when I was looking for mortgages getting a quote from the Nationwide BS

Their tracker mortgage paper work had a box on the front page like this

It was also pointed out to me by the financial adviser

It's only if it's berried in the small print I would have a problem.

perhaps if a person isnt able to read (a contract or otherwise) they shouldnt take up the opportunity to sign their name to 100s of K debt servitude (at least not without the excuse of physical violence via the state), just a thought

Edited by Georgia O'Keeffe

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perhaps if a person isnt able to read they shouldnt take up the opportunity to sign up to 100s of K debt servicitude (at least not without the excuse of physical violence via the state), just a thought

....a very expensive front door key......just sign on the .......line ;)

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perhaps if a person isnt able to read (a contract or otherwise) they shouldnt take up the opportunity to sign their name to 100s of K debt servitude (at least not without the excuse of physical violence via the state), just a thought

I remember a story where a women broke her leg on holiday but her holiday insurance wouldn't pay up because she had been drinking

Do you read all the small print before you sign up?

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perhaps if a person isnt able to read (a contract or otherwise) they shouldnt take up the opportunity to sign their name to 100s of K debt servitude (at least not without the excuse of physical violence via the state), just a thought

+1

If you are going to give the bank a free option by accepting that contract, then you shouldn't be surprised they will exercise it when it's 'in the money' - it's not a 'fixed spread' tracker because they define 'exceptional circumstances'

Edited by moneyscam

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I remember a story where a women broke her leg on holiday but her holiday insurance wouldn't pay up because she had been drinking

Do you read all the small print before you sign up?

i read everything i sign, obviously, as its my signature thats going to be on it, im not going to sign something i dont completely understand

i can understand there are grey areas in contract law (i wont sign in that case), but this mortgage contract states it in black and white, outside of narcolepsy or retrograde amnesia theres not a proverbial leg to stand on

Edited by Georgia O'Keeffe

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i read everything i sign, obviously, as its my signature thats going to be on it, im not going to sign something i dont completely understand

i can understand there are grey areas in contract law (i wont sign in that case), but this mortgage contract states its in black and white, outside of narcolepsy or retrograde amnesia theres not a proverbial leg to stand on

...if you don't you live today only to regret tomorrow. ;)

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  • 220 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% +
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      • up 5%



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