Abbey Flexible Plus Tracker - tracking differential information

m1ntie

My house has been mortgaged to Abbey since I bought it in Jan 2003. In Oct 2005 I changed product to their Flexible Plus Mortgage, which tracks at .49% above BoE rate.

As with many trackers their morgage conditions document contains a clause which allows them to change the tracking differential "at any time when the base rate is less than 3%". On the face of it this seems to be a clear statement that if base rate falls bellow 3% they will increase the differential, and effectivly not pass on any further reductions in base rate.

With further reductions likely I have been going through the terms and conditions I recieved when I converted to this product in Oct 2005. I have come accross an interesting and significant clause in the offer document I received dated 10 October 2005. This is a 10 page letter which states

Condition 13.6 "All of the parts of this conversion offer together with the Flexible Plus mortgage conditions booklet, will form the conditions of your mortgage."

It goes on to state under the heading of Description of interest rate -

"A variable rate which is 0.49% above the Bank of England repo rate ( its base rate), currently 4.5%, to give a current rate payable of 4.99%.
The interest that we add to the Bank of England repo rate (known as the tracking differential and which is currently 0.49%), is not subject to change under condition 13.6 of the mortgage conditions."

I am reading this to mean that they will not increase the differential and so they will reduce my rate even interest rated fall below 3%. What do other people think - has anyone else got this in their offer letter.

goosander

Yes, myself & several others - search for my recent Abbey tracker thread. Condition 13.6 had me pretty worried until I noticed that the offer letter removed it.