Secured Loan Question

pjo1976

I took out a secured loan against my property, and when the Bank of England Interest rates went up, so did my monthly payment for my secured loan.
However, when the Bank of England interest rates went back down, my monthly payment stayed at what it was.
Just wondering if anyone can give me any advice on this.

Regards

Paul

ERICS_MUM

If you can tell us what interest rate structure applies to your loan (have a look on your loan documents), we can help you.

Linda

_Andy_

Hi Paul

Unfortunately unless your loan agreement stipulates it will fall/rise in line with BR there's nothing you can do, as it's a variable interest rate.

halifax71

pjo1976 wrote: »

I took out a secured loan against my property, and when the Bank of England Interest rates went up, so did my monthly payment for my secured loan.
However, when the Bank of England interest rates went back down, my monthly payment stayed at what it was.
Just wondering if anyone can give me any advice on this.

Regards

Paul

Depends whether your terms and conditions are clear and unambiguous.

Have a look at your terms and conditions and see if the interest clause is similar to mine below. In my opinion mine are not. They say the following:

We may from time to time vary our interest rate. We may increase or decrease our interest rate to reflect a change which has occurred, or which we reasonably expect to occur in interest rates generally, or to ensure that our business is carried on prudently, efficiently and competitively. The interest on your account will not in any twelve month period, vary by more than twice the variation in the Finance House Base Rate published by the Finance and Leasing Association during the same period. If for any reason, the Financing and Leasing Association ceases to publish the Finance House Base Rate we may refer the variation in our interest rates to any other Base Rate which in our reasonable opinion best matches that rate

Now – in practice this in supposed to be interpreted that: -

- All FHBR increases within a 12 month period will be passed on to customer (by up to double that increase), i.e. 1 % increase in FHBR = upto 2% increase in my APR.

- Any FHBR decrease is to be treated as a Brucie Bonus for the bank.

The Financial Ombudsman’s adjudicator has said that this clause is clear and unambiguous. To whom I’m not sure. I certainly didn't believe it meant that.

That said many on here will believe that i should have engaged a lawyer to check the terms rather than trusting Barclays to tell me the truth.

When FHBR reverts back to the same level as it was at loan inception (5%) my APR will be nearly 9.6% higher (if my bank continues to maximise its return – as it is now).

To date the banks loan costs have reduced 80% whilst my APR has increased 20%. Presumably the Ombudsman will agree with the adjudicator but I need the OFT to consider the Unfair Terms in Consumer Contract Regulations. Been waiting 8 months for them so far.

Happy to regurgitate the UTCCR Clauses relevant to this issue if it would help you.