Should tracker rates be increased to bring down the SVR?

[Pinesky]

The mortgage rate debacle is caused by the trackers (caused by the Banks) . if BoI were ''ordered'' to increase trackers by 0.6% and reduce SVR by 1.8%, BoI's overall mortgage margin would be unchanged( reasonable by EU standards). SVR would be 2.7% and average tracker 1.8%. The screaming from tracker customers would be far louder than the current noise from SVR customers. I think this would be the banks' defense, reasonable overall mortgage margin, caught by the nethers on trackers and screwing SVR customers. How can you rewrite one type of contract and not the other?
Personally I believe that the minimum mortgage rate should be 3%, to cover cost of funds ,operating costs , margin and risk premium.
The above percentages are my best approximates .Central Bank would have the exact details.
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[ClubMan]

I'm not directly affected by this issue but know people who are.
As far as I can see SVR rates are too high and should be reduced.
However I always wondered if there was some way that trackers should also share some of the pain in the form of an increased margin or, if that was not possible, some sort of levy to help rebalance the costs?
After all the Government levied additional charges on insurance and pension contracts to defray other costs.
Maybe I'm looking at this too simplistically?
I do appreciate that tracker borrowers wouldn't be too happy seeing their margins increased or a levy put on their contracts.
And in some cases it may also push some tracker borrowers into arrears/mortgage difficulties...

 

[jathclare]

I'm not directly affected by this issue but know people who are.
As far as I can see SVR rates are too high and should be reduced.
However I always wondered if there was some way that trackers should also share some of the pain in the form of an increased margin or, if that was not possible, some sort of levy to help rebalance the costs?
After all the Government levied additional charges on insurance and pension contracts to defray other costs.
Maybe I'm looking at this too simplistically?
I do appreciate that tracker borrowers wouldn't be too happy seeing their margins increased or a levy put on their contracts.
And in some cases it may also push some tracker borrowers into arrears/mortgage difficulties...

Emergency legislation to bring in a set rate across the board at the onset of the crisis for all mortgage types should have been brought in once it became apparent that the banks trousers were down over tracker contracts, obviously SVRs and competition in general would bear the brunt. However, that would make the goverment behind it unelectable so never likely. So we are left with the problem at hand, stick a band aid here and a band aid there.

 

[ClubMan]

Yeah - I appreciate that some possibly pragmatic/fair options are simply not palatable to politicians or the public so will probably never happen....