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My mortgage company is now making up new rules and haven't 'decided' yet if my TRACKER mortgage will get latest rate cut!

(20 Posts)
onceinalifetime Fri 24-Oct-08 09:02:25

I'm furious, the only good news lately has been the interest rate cut as our mortgage is a tracker set at 0.5% above the base rate. Any previous interest rate changes have been reflected in the mortgage within a few days and confirmed by letter. Hadn't received anything since the half point cut a couple of weeks ago so called to check and the mortgage company had the cheek to say that they're having a meeting next week to decide whether to pass it on. So when is a tracker not a tracker - whenever they feel like it, it seems! Grrrrrr

I thought trackers were safe in this respect, after all, you still take the risk that the rate can go up. This is so unfair. Anyone else had this experience?

cyanarasamba Fri 24-Oct-08 09:07:26

Not had this experience but we are looking into mortgages at the moment. DH is a stickler for detail and he noticed that trackers mortages don't track the Bank of England base rate but the "Barclays Bank Base Rate" ie whatever they feel like!

So the way things are at the moment we just don't trust them on that so are probably going to go for fixed rate.

Ivvvvyygootscaaared444 Fri 24-Oct-08 09:10:12

Change companies - they have you by the short and curlies.....

onceinalifetime Fri 24-Oct-08 09:31:40

I've read the terms and conditions and it says "at a rate guaranteed to be 0.5% above the Bank of England Base Rate". It also says that they will review the rate on the 15th, which they haven't.

Of course, it also says they can change to a variable rate at any time and demand repayment of the mortgage if they feel like it. Do what they like in other words.

Can't change at the moment due to the scarcity of a decent mortgage elsewhere and more importantly a massive redemption fee.

onceinalifetime Fri 24-Oct-08 10:17:39

bumping just in case anyone else is having this issue....

DaisymooSteiner Fri 24-Oct-08 11:18:41

Who are you with onceinalifetime?

ib Fri 24-Oct-08 11:22:35

Contact the ombudsman - they should be able to help.

CountessDracula Fri 24-Oct-08 11:43:17

I have a capped base rate tracker and I called my mortgage co. They said they effect the change on the 24th of the month following the month in which the rate is changed.

EachPeachPearMum Fri 24-Oct-08 14:16:36

Unfortunately all mortgages have a clause near the end of the terms and conditions that state that the lender may alter the terms and conditions at any time, in any way they see fit, and give you notification, so you may effectively take your business elsewhere.

When we signed ours we queried this clause, and were told that it was correct, and that it was the building society's catch-all in case of dire need on their part. hmm

Your contract may state "terms and conditions and it says "at a rate guaranteed to be 0.5% above the Bank of England Base Rate" however the later clause can overrule that clause IYSWIM.

Sorry- they have us over a barrel- where else would we get the money for a mortgage from? They are not in business to be nice to people- they are in business to make money.

MrVibrating Fri 24-Oct-08 14:26:28

EachPeachPearMum, IAmNotALawyerBut it seems to me that if they were to invoke that catch-all then they could not apply any redemption penalty which might otherwise be due if you did decide to take your business elsewhere.

EachPeachPearMum Fri 24-Oct-08 15:20:56

IANAL either! smile I was just trying to clarify that as the lender, they are legally covered to impose whatever restrictions/ rates they wish unfortunately.

puppydavies Fri 24-Oct-08 15:28:43

our tracker is collared at 3.5% i.e. even if the base rate plummets that's the lowest it will go, which is a bit of a bummer

onceinalifetime Fri 24-Oct-08 17:39:41

I don't mind if it's fixed at a minimum low as I did wonder how that would work if the rates were completely slashed like 2% in the US or 0% in Japan.....the repayments look very nice indeed at those rates however grin.

We're not even scraping the bottom of the rate barrel, Libor rates have supposedly eased a bit and they're already doing what they like whereas when the rate goes up, the letter and adjustment is made within 2-3 days - b*stards.

MV, I wondered about the redemption, especially as some lenders were practically paying people to go elsewhere a few months ago. Surely they can't have it all their way but I am loathe to change at the moment as I thought we were on a good deal and at the meeting they may well agree the cut. It just feels like a decision will be made on each cut, almost on a whim, which is really worrying going forward.

I am in danger of losing my job and the potential rate cuts and assumed mortgage payment reductions were making me feel a bit better about it all. I thought trackers were relatively safe.

CaptainNancy Fri 24-Oct-08 20:19:43

Is it a bank or a mutual?
Our mortgage is with a mutual, and they passed on the rate cut within a few days to us... I suppose it is because they do not need to satisfy shareholders.

Sorry you are having so much worry though sad

onceinalifetime Fri 24-Oct-08 21:01:05

It's with a subsidiary of Cheltenham Building Society so I am surprised it's such a big deal. I am keeping my fingers crossed it gets passed at the meeting - just taken by surprise that it's under question already and you do feel like the rug is being pulled from under you when they change the rules like this.

onceinalifetime Sat 25-Oct-08 00:57:27

Coventry Building Society even - my brain just registered!

SnoopDog Sat 25-Oct-08 01:02:52

bank of scotland,

passed the full rate cut on today,

i am impressed,

we are very lucky,

we track below the base rate,

this will come to an end very soon sad

onceinalifetime Sat 25-Oct-08 01:13:11

SnoopDog, that's great news - there's another half cut forecast so long may it continue.....

S1ur Sat 25-Oct-08 01:27:33

I am with Snoop. (and BoS). got letter today reducing morg - also a tracker.

ninedragons Sat 25-Oct-08 03:17:40

Ring your MP, or write to her/him and cc your bank. Having bailed these fuckers out, the government should be exceedingly keen to make sure their constituents don't get shafted.

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