While we are all aware that interest rates have been, and continue to, move upwards, it seems that this is offering the financial community a chance to recoup some of their losses from elsewhere. There are reports in the press that some Banks have been increasing savings rates in line with base rate changes, but increasing loan rates by more than base rate changes.
So is this really a big deal?
For many years we have seen consumers place great trust in the so called “Best Buy†tables in many of the financial magazines. While they do offer a summary of the best offers available at the time, many in the industry have great reservations. Do all companies have the same access to these lists? Maybe not….
Insiders in the industry claim that :-
A recent report into the UK Credit Card industry has shown a sharp fall in profitability for the credit card providers, many of whom have been hit by bad debt provisions. It appears that 2006 was a bad year for the industry with the profit per card falling 40% to “just†£16 in the UK.
While a judge in Birmingham recently unexpectedly ruled in favour of Lloyds TSB in a case regarding the repayment of bank charges, this has not set a legal basis for all outstanding cases. However, it appears that the banks have ignored the fact this was only one case, and there is an ongoing Government review, and are quoting the ruling in what many see as scare tactics towards outstanding claimants.
While there has been an explosion in Individual Voluntary Arrangements (IVAs) over the last few years, many analysts believe that the cycle may have peaked in the short term. This situation was reflected in the recent fall in share prices in the sector, with warnings that growth would slow from the unrealistic rates of last year.
While they have been popular in other areas of the world for some time, it is only over the last few years that “offset mortgages†are becoming more widely available in the UK. As with any new financial product it is taking some time to educate the public about the pros and cons of these mortgages, but there are signs that the message is starting to get through.
What Are Offset Mortgages?
