Skipton Building Society activates mortgage release clause
The Skipton Building Society has sent shockwaves through the mortgage industry with the revelation that the group will trigger an "exceptional circumstances" get out clause written into the customer mortgage deals sealed since 2002. Despite the fact that the Skipton Building Society never actually defined "exceptional circumstances" it has cited the exceptionally low Bank of England base rate as a reason for rewriting these mortgage arrangements.
Under the company's standard variable rate agreement, the mortgage rates on these arrangements can never be more than three percentage points higher than UK base rates equating to a maximum rate of 3.5% at the moment. However, the company has confirmed it is having to pay savers a similar rate to attract their attention and their business and is therefore struggling to make a profit on a significant number of mortgage deals.
The change in strategy by the building society will affect more than 60,000 customers who were either on the lower rate or about to move onto the lower rate. The standard variable rate will now be 4.95% in order to give the Skipton Building Society the opportunity to make a profit when taking into account the cost of attracting savers against the cost of providing mortgage funding.
Share this..
Related stories
UK insurance trap could hit 7 million people
It has been revealed that a number of UK insurance companies have small print built into their contracts, one of which demands that those acquiring policies need to reveal any past convictions or minor offences against their name. A recent case regarding a property which was the subject of an arson attack brought the small print to light when a £241,000 payment was paid back to Aviva after the co...
Read MoreConcerns about double dip recession impact upon sterling
Concerns that the UK economy is on the verge of a double dip recession have had an impact upon the exchange rate today with sterling falling to a one-month low against the dollar. While this may not seem overly concerning on the face of it, when you consider that the dollar is at a 15 year low against the yen it does reflect the ongoing weakness in sterling. Much of the downward movement in the...
Read MoreOne million immigrants set to leave UK over next five years
The debate regarding foreign nationals working in the UK is set to intensify over the coming months with an announcement by the Institute for Public Policy Research which has today released findings suggesting that up to 1,000,000 immigrants will leave the UK over the next five years. The reason for these forecast moves is simply the fact that the UK economy is struggling and job prospects are not...
Read MoreNow UK consumers need to pay for Christmas!
As the festive period draws to a close and we move headlong into 2009 the reality of how to pay for Christmas will only just be hitting home with many UK consumers. Despite the doom and gloom for the last few months we saw a record number of consumers hit the high Street in the last few days before Christmas grabbing bargains galore along the way. However, now is the time to pay for this Christmas...
Read MoreMortgage Decline
A further decline in demand for mortgages is expected, in the coming months, as the housing and mortgage market continues to malinger. Major lenders are speculating that house prices will fall in the first quarter of 2011 as buyers and sellers delay the decision to move. This has been reported in the Bank of England's Credit Conditions Survey and lenders anticipate that this will also have a...
Read More