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Abbey Offset (tracker)
zarjaz_2
Posts: 73 Forumite
I have an Abbey offset tracker that I took out in 2005. It's working out well for me, with around 30% of the oustanding mortgage in my savings pot.
I dug out the original T&C today, and it states that Abbey have the right to vary the tracking rate (0.5% above base) if the base rate falls below 3%. It also says that they have the right to retain a variation in the tracker rate even if the base rate returns to 3% or more.
My reading of this is that Abbey can use any future base rate reduction to increase my tracker differential from 0.5% to 1% or even more, and I'm then stuck with this even after base rate goes up. And there's nothing I can do about it!
Any views?
I dug out the original T&C today, and it states that Abbey have the right to vary the tracking rate (0.5% above base) if the base rate falls below 3%. It also says that they have the right to retain a variation in the tracker rate even if the base rate returns to 3% or more.
My reading of this is that Abbey can use any future base rate reduction to increase my tracker differential from 0.5% to 1% or even more, and I'm then stuck with this even after base rate goes up. And there's nothing I can do about it!
Any views?
0
Comments
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Exactly this point was made in an article in The Sunday Times today.
If the BoE base rate dropped to say 2.5%, Abbey would be within the terms and conditions to very the tracking and keep you on 3.5%. If the BoE rate went upto 3%, Abbey could increase your rate by the half a percent, leaving you at BoE +1% rather than the +0.5% you were expecting.
Whether that is "treating customers fairly" as it was in your T&Cs or not, I don't know.
Being there has been a lot of publicity about these collars, the BoE may not reduce the interest rate further as they know it wouldn't do much to the mortgage rate.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
Have a look in your mortgage offer, mine states that section 13.6 (about the 3% collar) does not apply to my mortgage.0
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Give that person a cigar!!
I got out my Mortgage Offer and it DOES say that s13.6 does not apply to my mortgage. Well, that's a relief. Thanks very much for pointing this out. I do hope that others have similar exemptions in their mortgage offers.0 -
I rang abbey this morning who told me this was not the case and und er note 39 they could impose the different tracker
marion0
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