First Active Interest Rate Floor (Collar)

arowlands

Hi all.

Just wanted to share my good news, & hopefully help others out as well. I had a bit of a result with First Active on Friday, when I rang them to extend my mortgage term for a fee of £35 as a way of reducing my outgoings (definitely intended as a short-term move, but following redundancy I've got few options). They told me that they were updating their systems, & would have to create a new account number, & to go onto the new system they couldn't carry across the interest rate floor, aka collar, which is 4.0% on my tracker product. The upshot of this is that my repayments will reduce by £500 from next month, with my rate falling from the 4.0% to 0.5% (I was tracking the Base Rate at the Base Rate until it went below 4.0%). No doubt there could be other First Active, & maybe RBS or OneAccount customers who could also benefit from this loophole, although I'm sure they'll be moving fast to close it.

:j

ems11

Hi Arrowlands

This may or may not be relevant, but i recently requested additional borrowing from first active, and they too had to give me a new mortgage number (porting my existing product onto the system they use for the RBS mortgages), but my tracker product (currently 0.5% above BOE rate, then at end of March switches to 1% above BOE for remaining term) doesnt have a collar, so pretty good product in my view anyway.

As i've not yet drawn down on the additional lending (which is on a fixed rate product, thats all they were offering), they also sent me a letter saying they had revised their fixed rate, and it would be coming down by 0.5% when I drew down on the funds). :j

In my view, they are pretty good as a company to deal with, although I guess that depends on what your mortgage product is, and how happy you are with the terms!

arowlands

Mortgage offer received, signed & returned yesterday. Really can't complain at speed of service. Was slightly miffed that they had inserted a new clause allowing them to not necessarily implement base rate changes on the "new" deal. However, as it only runs till next April, & then reverts to Base + 0.99% with no clauses, (& with the best will in the world at 0.5% there can't be that many reductions left for them to make!!) I jumped at the chance. I had to laugh at the valuation figure, which was based on house prices in 2005 when we raised funds for an extension (& of course didn't allow for the increase in value after the build). Oh well, now I can put the mortgage to bed for a while & concentrate on trying to replace my lost income.....!

MrC-117

Sounds like a pretty good deal. Well done!