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The base interest rate is set by the government and the banks can whack on whatever margin they want (including negative for a period) Do you think it's "fair"

by tezza 17y ago

The base interest rate is set by the government and the banks can whack on whatever margin they want (including negative for a period) Do you think it's "fair" that banks offer Interest Only[1] mortgages, where you the householder can pay off 100% of the price of the house... and then owe the bank the same amount again? I understand why you are riled... but see my other post about my friend who offered better terms to bands and got no business[2] ----- [1] http://www.thisismoney.co.uk/mortgages-and-homes/tips-and-guides/article.html?in_article_id=415637&in_page_id=53957&in_advicepage_id=97 http://www.thisismoney.co.uk/mortgages-and-homes/tips-and-gu... [2] http://news.ycombinator.com/item?id=971950 http://news.ycombinator.com/item?id=971950

Quarrelsome 17y ago
Yea, I used to work in the mortgage industry. Interest only mortgages are there for people who have investments to cover the cost but just to want to ensure the liability doesn't increase. What is unfair is selling these mortgages with endowment plans as a "dead cert" to consumers like banks did in the 80s in the UK. They were all successfully sued and settled in the late 90's / 2000s. In the UK the council that sets interest rates is an independant entity.