Tracker Mortgages - Can the banks do this???!!!

BradfordBull

Hi,
We have a lifetime tracker with Intelligent Finance at 0.34% above the base rate for the duration of the loan.

I'm hoping we're in the lucky position where we will benefit from current and future interest rate cuts. One paper today predicted the base rate will be 2.5% this time next year.
I mentioned this today to Mrs BB and she says that a radio 4 programme said that many banks have a clause that they will only track the base rate down to a certain point and then will stop. She said Abbey for example will not track the base rate if it goes below 2.5% for example.

Can this be right?????
I've checked the T&C's of our mortgage and can't find anything.

Any advice much appreciated

BB

Rikki

Lets get to 2.5% base rate before we start worrying. It could never happen.

BradfordBull

What happens if Intelligent finance stop tracking the base rate at 4%.

I'll never get to 2.5%. That's my point Rikki.

I assumed a lifetime tracker was a cast iron gaurantee to track the base rate. My question is... is that true or not?

Kez100

I am with Abbey on a tracker bought under Abbey National and while I don't know the answer I have read 3%, no collar and now 2.5%. Seems like no one really knows.

Rikki

BradfordBull wrote: »

What happens if Intelligent finance stop tracking the base rate at 4%.

I'll never get to 2.5%. That's my point Rikki.

I assumed a lifetime tracker was a cast iron gaurantee to track the base rate. My question is... is that true or not?

What makes you think they will stop tracking base rate? Why 4% or 2.5% these are figures are just guesses.

I've had my tracker for many years now and as far as I am aware there is no cut off point. You have checked the terms and conditions of your mortgage and found no mention of it.

Without listening to the program your wife did it is difficult to know the context in which the statement was made. It could be something they are thinking of introducing for new trackers given the economic climate.

JonnyBravo

You need to double check your T&C's. It should be in there if it's included in your mortgage.

feisty1

BradfordBull wrote: »

Can this be right????? quote


Check yr original offer of loan papers u will find on there exact info specific to yr morgage, not my mortgage or someone with an abbey mortgage! Each lender has their own criteria & criteria can vary amongst different products. If u have read yr papers & it is not mentioned & yr still in doubt fone IF & ask them, if it is conf to u & yr not aware ask for a copy of the documents u signed relating to this.......This is an easier resolve than asking on here where u will get everybody's opinion & possibly not the correct answer

JonnyBravo

Rikki wrote: »

What makes you think they will stop tracking base rate? Why 4% or 2.5% these are figures are just guesses.

I've had my tracker for many years now and as far as I am aware there is no cut off point. You have checked the terms and conditions of your mortgage and found no mention of it.

Without listening to the program your wife did it is difficult to know the context in which the statement was made. It could be something they are thinking of introducing for new trackers given the economic climate.

These terms do exist in many existing trackers.
The T&C's are where you'll find out what you signed up to I guess.

Ian_Griffiths_Halifax

BradfordBull wrote: »

Hi,
We have a lifetime tracker with Intelligent Finance at 0.34% above the base rate for the duration of the loan.

I'm hoping we're in the lucky position where we will benefit from current and future interest rate cuts. One paper today predicted the base rate will be 2.5% this time next year.
I mentioned this today to Mrs BB and she says that a radio 4 programme said that many banks have a clause that they will only track the base rate down to a certain point and then will stop. She said Abbey for example will not track the base rate if it goes below 2.5% for example.

Can this be right?????
I've checked the T&C's of our mortgage and can't find anything.

Any advice much appreciated

BB

If you have taken your mortgage on since November 2004, then you will have recieved a Key Facts Illustration (KFI). The KFI should explain your rate and what rate it tracks. If it refers to you looking in your Terms and Conditions for further information regarding the rate it tracks, then you might find that there is a minimum rate there. As far as I'm aware, this is allowed because they referred to it in the KFI. If it doesn't mention looking in the Terms and Conditions, then I would say that if the base rate does drop and your rate doesn't drop accordingly, then you could argue that they are going against the KFI. The KFI is there to give you protection and clarity of what you are buying.

By the way, Oh, hali hali, hali hali hali hali Halifax.

BradfordBull

Thanks for your replies,

I've checked the KFI in detail and read as much of the full T&C's I could before getting a headache. I can find no mention of this clause. Maybe it's a idea the banks are considering for future trackers as you suggest.

It's quite reassuring to be on a tracker at the moment and I suppose I was hoping that no one else is aware of this happening, as seems to be the case. (maybe with the exception of abbey?)

by the way... come on you bulls :T

Peartree

Correct me if I'm wrong on this! I was under the impression that there were 'trackers' (which are based on the lender's chosen rate) and 'base rate trackers' (which are based on the actual base rate).

If the lender doesn't choose to change their rate, despite a change in interest rates, your mortgage rate therefore doesn't change with a 'tracker'. If you have a 'base rate tracker' product, the lender had no choice but to change the rate with fluctuations in the Bank of England base rate. But, of course,when you sign up there are different incentives for different types of product so you pays your money and makes your choice.

I have a base rate tracker and have already been notified of my reduction in payments. It might be worth checking what type of tracker you have.