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determindator

Mortgage interest rate rises

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There is notification Santander 'intend' to raise the int rate by half percent. The reason it is 'being considered' is because of 'the increased cost to Santander of raising the money which we lend to our customers, including what it costs us to provide you with your mortgage(what ever that is)' apparently those reasons in the mortgage conditions. Nothing mentioned about savers rates so I presume there's no connection there:madgrin: I just feel the BOE rate is low for a reason. How much can these lenders raise the int rate until someone decides to do something about it. I can hear the arguments from the hard line who say tough bananas but it doesn't have to be this way, I hear business economists are getting fraught over Government decisions.

 

Anyone else with an int rate rise from other lenders?

Edited by determindator

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Santander is a F**ked bank.

 

Santander does not get money for mortgages from saver's deposits (although look up fractional reserve banking). A mortgage contract with a bank magically borrows the funds into existence, so it should be win win.

 

However, Santander is a Spanish bank, & anyone who has looked at property in Spain knew that it was overvalued years ago, & is still mightily overvalued now. There are a colossal number of empty buildings in Spain, & the banks still really hold these assets, which technically will become their liability as the money advanced to the constructors will not be recouped by their sale.

 

Money market rates for Santander, & Spain in general, to stay afloat with all the new disclosures & capital requirements are therefore higher as they are more at risk of going bust.

 

I saw more blatant corruption at all levels in one hour trying to do a deal in Spain 6 years ago, & walking away from it, than I ever have in the UK. The Abogados (lawyers), Mayors, vendors, you name it. We're not in a good way in the UK, but I'll tell you now that the balance sheets of Spain & its financial companies are just a cheery fiction.

 

10 years ago, the only people who had a variable mortgage rate 4.25% above base like Santander were lowlife lenders like Kensington who dealt with the riskier bets. My mortgage is 1% above base. Most SVRs are 3.5% above. That's so they can still pay out the £13 billion the banks still pay annually in bonuses I guess.

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Thanks for reply TFL. Well first month to pay int rate hike. So Santander, I will find another mortgage lender. I can already feel the benefit from just saying it:-D

 

They have a 2yr fixed rate for newbies 2.39% I spose I contribute to that as well as the bonuses.

Edited by determindator

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If borrowing will cost more to banks and building societies in light of the possible lowering of the BOE base rate, whats the odds banks and b/socys will pass the extra cost onto the customers by raising rates? IMO they should absorb the loss as increasing int rates affects the spending power of people, plus people could lose their homes putting more burden on the state. They should have saved up for the rainy day as they knew it would come!

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Fed up with hearing record low interest rates. Doesn't mean anything to millions of borrowers if it's not passed on!

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Just a thought, if mortgage borrowers had more in their pockets, this would revive the confidence lost by investors who are holding onto their money because they are nervous no one is spending. More people could afford to buy homes with low int rates which would stimulate the house building industry which in turn creates jobs in many other sectors.

 

As for the unregulated lenders causing havoc with their high int rates, that's something else to address.

Edited by determindator

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Well here we are again, the dreaded int rate rise discussion. IMO it's not the right time. Far too early,

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