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pipllman

Rbs Agm: Almost Half Mortgages Still On Svr

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You can read the transcript in full here

http://otp.investis.com/clients/uk/rbs/RNS/regulatory-story.aspx?cid=365&newsid=532739

but I thought this was an interesting line

"Mortgages are a good example of an area where we can support customers and improve returns. Around half of all mortgage customers in the UK are still on Standard Variable Rates. So, we have an opportunity to help them save money, while also meeting our aim of growing market share."

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Like many long-term commitments they pull/tie you in with short-term teaser rates....phones, fuel, debt etc take your pick......after that the bar is raised.....some can move many more can't. ;)

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svr = customer aligned with economy

fixed rate = customer pays through the nose to pay bank's risk insurance

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to be fair, the quote does include the wording " and improve returns"

RBS isn't hiding the fact that it would make more money if customers were moved from SVR

it is clear that the bank is looking to make more money from its mortgage book

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Guest eight

If they took out the mortgage pre-2007 pon SVR they are now paying **** all./

I know lots of people like this !!!

One here. Paying 2.5% on twenty-five grand balance. Not really worth paying off.

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A two year teaser rate to suck in the mug punters (courtesy Uncle Gid) before they start sweating them on the SVR at 5+%.

What's changed?

:lol:

wpid-sweating-man.jpg

Edited by zugzwang

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So RBS needs to shift a lot of people of the SVR which is currently hugely benefiting them onto a product with a low teaser rate, high fee and then magically comes out in 2 or 3 years with a 5%+ SVR. Compared to staying put and paying virtually nothing in interest. How do they plan on achieving this? Is this going to be a future liability claim that the mortgage advisor told me it was a good deal, can I have my money back please?

How many of these individuals hold enough equity in their property to be given a new super duper low interest rate teaser?

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Sorry if this is obvious, but they're not talking about offering better deals to their own customers stuck on the SVR. That would just be stupid, which RBS (these days) are not. The idea is to pinch such customers from other banks and then hope that they default onto a high SVR with RBS and stay there.

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svr = customer aligned with economy

fixed rate = customer pays through the nose to pay bank's risk insurance

Don't think I'm doing anything daft. Out of curiosity I used the Lloyds Bank website to see what their current SVR is at 75% LTV and as best I can see, they won't sell you a variable rate mortgage. Only products coming up are Fixes. If you select a variable rate £150k mortgage at 75% LTV, 25 year tenor then the search returns no products. :blink:

Can this be right?

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One here. Paying 2.5% on twenty-five grand balance. Not really worth paying off.

If they took out the mortgage pre-2007 pon SVR they are now paying **** all./

I know lots of people like this !!!

I'm pretty sure that you guys are mistaken. The 31 March 2015 print for the Bank of England series, IUMTLMV, (Monthly interest rate of UK monetary financial institutions sterling standard variable rate mortgage to households) is 4.53%.

Possible confusion with people on the Nationwide BMR which due to its construction has been behaving like a tracker at base +2% since 2009. According to Oxlade at the Torygraph at November 2014 there were about 730k households riding this f**k-up gravy train, (there are about 11 million mortgages, so shy of 1 in 10 borrowers, knocking on 1 in 20).

People on SVRs aren't paying low rates, they'll typically either people with such a trifling mortgage that there's no point moving or they'll be so-called mortgage prisoners, with daft mortgages that they'd never been able to take out had MMR rules been in place when the loan was made and from which they cannot now re-mortgage off of and onto cheaper fixed rate mortgages, because of MMR.

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Don't think I'm doing anything daft. Out of curiosity I used the Lloyds Bank website to see what their current SVR is at 75% LTV and as best I can see, they won't sell you a variable rate mortgage. Only products coming up are Fixes. If you select a variable rate £150k mortgage at 75% LTV, 25 year tenor then the search returns no products. :blink:

Can this be right?

You need Si1's time machine, blandie.

Until the Zirpenning, the Lloyds SVR was a de facto BoE rate +2% tracker. Of course, such a generous SVR is no longer available. Ditto our favourite BTLing society, the Nationwide.

I know you know this, I know you know I know this and we both know there's a great bank of England chart showing the differences between market SVRs and 2 year fixes, so why don't you post that instead?

Bank of England: Quoted Rates, May 2015 (no link - this is a database update)

New record lows for 2-year and 5-year 75% LTV:

MortRates0515.gif

Edited by 25 year mortgage 8itch

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Guest eight

Until the Zirpenning, the Lloyds SVR was a de facto BoE rate +2% tracker. Of course, such a generous SVR is no longer available. Ditto our favourite BTLing society, the Nationwide.

Bingo. It's Lloyds - well, Cheltenham and Gloucester. Base +2%. I know for a fact they would love to get us off it but heh, I didn't write the T&C's.

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