Buy to Let & LettingFinance

Why there is no security in your mortgage lender’s Standard Variable Rate (SVR)

So for the past few days I have watched as bank upon bank announce they are increasing their Standard Variable Rates (SVRs). And with every new lender hiking their prices I check my products and wait with baited breath.  Of course, it was only a matter of time before all the banks jumped on the band wagon…

There may be moral indignation and hatred in the popular press – but these are banks – they don’t really give a rat’s arse about anything more than making money.

We are all grown ups, and following this banking crisis, we really should know better by now.

But we don’t.

Last week I shared with you how the 25 year mortgage contract I signed with Skipton which had a ‘rate guarantee’ meant nothing in the face of the “exceptional circumstances” clause, which is a catch all, for this-clause-means-we-will-do-what-the-F-we-want. Unfair contracts. Misleading guarantees. Outright liars – you would have thought Watchdog and all the other consumer action groups would have a field day – but they don’t, because they can’t do anything.

And so today I wake up to the news that my Bank Of Ireland mortgage rate which is currently on a Standard Variable Rate (SVR) is going to increase by 1.5%. It was a shock. Even for me.

Generally SVR’s, although independent of Bank Of England Base rate, do usually follow the pattern of base rate changes. Yes, the SVR is the mortgage lender’s own rate for lending, but usually it does have some sort of semblance to Base Rate.  But now we’re worlds apart. This is again a case of the banks doing what the F they like and screw anyone else.

So Halifax started the ball rolling last weekend with it’s 0.25% hike, then a few others started piling in – all with approximate 0.25% increases. Then Bank Of Ireland who saw the media furore which had started to erupt, just said “F*** IT” why not just get it over and done with and screw our customers royally.  Let’s jack it up by 1.5%.

Just to put that into a real world context for you, my mortgage with this new increase will rise by £196 per month…and that’s without the base rate moving…which we all know is going to happen at some point soon.

Of course, most banks would probably not act like Bank of Ireland, they don’t really want to lose all their customers.

However, that does not apply to Bank Of Ireland.

Having spoken with Bank of Ireland this morning to find out my options for other mortgage products (limited – I can fix for 3 years or 5 years at 5.99% or 6.25% respectively) I was politely informed:

“We do not make a secret of it; Bank Of Ireland do not want to be in the mortgage business any longer. We stopped taking on new customers 3 years ago. Now we are looking to offload our business.  In the nicest possible way, we are not looking to encourage our customers to stay with us. We want them to seek other options elsewhere which is why we have paired up with London & Country Mortgage Brokers and they will find you a more competitive rate with another lender”

There is truly no better way than saying Fuck Off.

Truly that is she told me.

So the banks have changed their minds. They no longer want to lend the money they offered to consumers.  I understand businesses change course. But really, is it fair for a bank to just change it’s mind when hundreds of thousands of people and their homes are involved?

Is it OK to just say – we don’t want you business – take it elsewhere.  Property is the most expensive purchase of your life and it takes years to pay back the debt.  It is not an overnight decision. Well not for me anyway, but then I am not a bank.

Again, I have limited choice. The mortgage market is screwed.  And on top of all this, there are the extortionate arrangement fees of the new mortgage which are typically in excess of £2,000.

Maybe I should know better. I wonder why I am so surprised. But do you know what? I am.

Property is a long term investment.  It would be nice to feel that we have that long term security with the banks we deal with.

  1. Derek Moore

    Thanks for the heads up Sam. I’ll be running into all that soon when my low discount periods expire. Incidentally, I’ve heard anecdotally that some banks who do want to offload their mortgage business have accepted less than the full debt “in full and final settlement”. Is that something you have tried?

    1. Sam

      Hi, no they just want you to leave and go elsewhere. I have heard of one person getting that but I can’t remember the name of the bank – they got taken over by another which is why I think they wanted to clear the debts.

  2. Jo King

    A very good blog Sam. The way they’ve done this can ruin people’s lives overnight. Appalling that they didn’t do it gradually over a number of months – poor business management and zero customer relation skills.

  3. Cristina Westphal


    Have you heard of financial dictatorship!!!

    And we all believe that we live in a democracy.


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