The Unbelievable Chelsea BS

MarkyMarkD

No, there is no such protection.

If A&L was in financial trouble, and didn't care about upsetting its customers and ruining its future business, it could increase its SVR to 100% and there is nothing that existing borrowers could do about it.

At a certain level of SVR, it would possibly be worthwhile to take out an unsecured loan and then a mortgage at 80% LTV (or whatever you could get) as the overall cost would be less than the "silly" SVR.

riles

MarkyMarkD wrote: »

No, there is no such protection.

If A&L was in financial trouble, and didn't care about upsetting its customers and ruining its future business, it could increase its SVR to 100% and there is nothing that existing borrowers could do about it.

At a certain level of SVR, it would possibly be worthwhile to take out an unsecured loan and then a mortgage at 80% LTV (or whatever you could get) as the overall cost would be less than the "silly" SVR.

You mirror exactly my own thoughts, subject to the rider that any such increase must be covered by Unfair Contract Terms, in exactly the same way that people have claimed their excessive bank charges back (although I know that this still isn't settled).

On that basis, I very much doubt that we are anywhere near the level where such a claim could be made, I'm just wondering out loud where that level could be.

MarkyMarkD

I don't agree that there is such a level. The level that is totally unfair will vary dependent on circumstances.

If the lender is about to go bust due to huge losses - say - then it is fair for it to charge 100%.