Bad Credit Interest Mortgage Rate
I see that whilst the interest base rate has fallen by 0.25%, none of
the mortgage lenders have stated they will be reducing their rates.
This means that an extra 0.25% of every borrower's mortgage will be
profit for the lender. The economy will see little or no benefit, which
is the intention of the rate decrease.
As customers are often tied into their mortgage for some years, should
lenders be obliged to adjust their rates accordingly? After all, they
don't appear to hesitate to increase rates when the base rate rises.
Do mortgage lenders have a cartel to agree whether rate decreases will
be passed on to the customer? Would they like to influence the economy
by keeping rates artificially high, in which case why have a base rate?
For various reasons, when I bought my house, I took the Halifax's buildings
and contents insurance. Not the most suitable thing to do perhaps, but at
the time it made life a whole heap easier.
My mortgage is capped rate, but because of the way they calculate the
insurance premiums, when the interest rates last went up, my payments were
increased (by a matter of a couple of pounds). At no time after any of the
subsequent reductions in interest rates have they said they will reduce my
premiums. I am less than amused by this and, needless to say, now I have
the opportunity, I shall be taking my insurance business elsewhere...
Doesn't that depend on the difference between savings invested
with them and mortgages loaned by them? Also, as their incoming
mortgage interest rates are generally higher than their outgoing savings
rates, I'm really not sure.
If people use the mortgage/savings argument to disprove my question, why
is the decrease in base rates supposed to boost the economy? Surely
under such a scenario, the economy would be better for interest rate
increases as people's savings income would rise? It clearly doesn't
work that way.