Base rate is now 0.5% and I have a -0.65% discounted tracker mortgage - does this mean THEY will pay ME interest now?

[2pt4kids]

or will it just be zero interest?
Because theorectically they should be paying me 0.15% interest every month shouldnt they until the tracker rate expires? (4 months time)

DH is wondering this too!

I asked dh this last night. He sadi no

In theory... but then banks are shits like that. Take take take.

why not?
is it a standard small print part of a maortgage contract to rule this out do you think?
Surely if its NOT mentioned in the contract then they'd have to pay up..

They ought to, oughtn't they? There was an article in the Grauniad a few weeks ago about mortgages, and they cited the case of one bloke who had a guaranteed 1.5 below base rate mortgage with the C&G- the paper reckoned that if interest rate dropped any lower from the then rate of 1.5%, the bank would be paying him to have the mortgage. I bet they've a get out clause though, the slippery customers.

They could instead call in the loan, why would the bank want to loan you money and pay you for the privelage?

I thought they had a clause in the small print that said a minimum and maximum rate that the contract was valid between

I beleive it does. I heard the Cheltenham and Gloucester were actually paying people who had a mortgage like this.

Anyone know?

Cant believe thats true.

There was a bloke in the paper who was being paid 11p a month, but most trackers have small print saying your payments can't be less than zero (mine does), or less than a set rate.

I had to look out the small print for mine to check I was getting the right discount - they apply the new rate on the 8th of the month after the reduction, and my payments are on the 6th, so it's 2 months before I get the benefit. Gits.

Wow !

mine does too notcitrus.

No. The FSA have ruled on it and said that this won't happen

Most have a "collar" - Nationwide has refused to pass on further base rate cuts to tracker customers, and Norwich and Peterborough, Yorkshire and Skipton building societies have also set a ?collar? on how low their tracker rates will go. In practice most will not drop it below 0%. If they had to, I think they would be calling in the loans.

No

been discussing this with my mum (a mortgage adviser)

there have been people on 1.x% below BR

there system has to have a interest rate so they are being charged 0.01% interenst (and will get that 0.01% refunded)
they will not pay you... you have an interest free loan though! wahooo

lucky you

(wishing i wasnt fixed for another 2 years!)

ps my mum is a C&G mortgage advisor and they are NOT paying people, but for a while wondered if they would have to... they dont!

I'm with Yorkshire and we have a collar

They don't always pass the full rate on due to balancing it out with the savings rates they offer ie if they only pass on 0.25-0.5% they can maintain or reduce the cuts on savings accouns although it does still cost them more.

Apparently the mortgage lenders make it clear that only the borrower pays

It is indeed a one way street according to the FSA, it was on BBC news 5th March called "what low interest rates mean for you"

news.bbc.co.uk/1/hi/business/7924201.stm