dubious various interest rate mortgage help please

keegle

Hi
We have a mortgage which we received a mortgage offer showing an variable interest rate of 6.9% in 2005. It is a variable rate mortgage which we have been paying an interest rate of 10.9% for at least the past three years. We have never received a copy of the finalised mortgage agreement. We have never recieved any communication about interest changes and therefore would like to know if although this is a variable rate mortgage


Is a lender obliged to pass on interest rate rises and cuts as declared by the Bank of England? or do sub prime lenders not have to ?
thanks for any advice.

Rednoseranter

You received a mortgage offer - which I assume that you signed and returned to the lender (retaining a copy for yourself?) - that is your 'finalised mortgage agreement'. I'm also assuming that you are on the lenders Standard Variable Rate (SVR) (certainly with a current rate of 10.9%) - it does depend on the terms and conditions but generally no lender is 'obliged' to pass on rate rises and cuts in their SVR rates to borrowers irrespective of the type of lender they are.

You should have however received notifications of the increase in your rate payable - I would contact your lender to inquire when and by how much rates have been changed on your mortgage.

Hope this helps.

keegle

Rednoseranter wrote: »

You received a mortgage offer - which I assume that you signed and returned to the lender (retaining a copy for yourself?) - that is your 'finalised mortgage agreement'. I'm also assuming that you are on the lenders Standard Variable Rate (SVR) (certainly with a current rate of 10.9%) - it does depend on the terms and conditions but generally no lender is 'obliged' to pass on rate rises and cuts in their SVR rates to borrowers irrespective of the type of lender they are.

You should have however received notifications of the increase in your rate payable - I would contact your lender to inquire when and by how much rates have been changed on your mortgage.

Hope this helps.

I am now confused because if they have increased the rate from 6.9 to 10.9 when they did and did not notify me and have kept it at that rate for 3-4 years,then how can it possibly be a variable rate mortgage if it is a fixed rate,was i misled with it ,as that is what i thought i was getting a variable rate mortgage as the broker explained.
thanks

luckyfool

You thought it was variable, it has varied (upwards in this instance), I'm not sure where you are getting the idea that it might be fixed from?

If your rate has changed and your mortgage is paid by direct debit you should have received correspondence each time explaining the new monthly payment and when it would start.

keegle

luckyfool wrote: »

You thought it was variable, it has varied (upwards in this instance), I'm not sure where you are getting the idea that it might be fixed from?

If your rate has changed and your mortgage is paid by direct debit you should have received correspondence each time explaining the new monthly payment and when it would start.

thank you for the reply,what i am asking is this then,in my mortgage offer,(which incidently is very sparse as the broker took away the other paperwork with all the small print on ,of which we have never had a copy of.)
the mortgage offer has a paragraph that clearly states-:

" if interest rates change then the rate charged to your account will change at that time and you will be notified in writing"

since the mortgage offer interest rate in june 2005 was 6.9% as we have had no correspondence and no agreement (detailing in all the small print the terms of the mortgage) then we may have been charged 10.9 since start of mortgage.i only have statements back to 2008 so dont know,but as i was asking before,surely no interest changes effectively make this a fixed rate loan or variable upwards only,whereby i thought i was buying into a fair contract of up and down rates.

firstaspect

You need to call up your lender to ask them for the details of what rate you've been paying and when.
Have you never monitored any of your monthly payments from the beginning to check you're paying the amount you expected?

GMS

keegle wrote: »

thank you for the reply,what i am asking is this then,in my mortgage offer,(which incidently is very sparse as the broker took away the other paperwork with all the small print on ,of which we have never had a copy of.)
the mortgage offer has a paragraph that clearly states-:

" if interest rates change then the rate charged to your account will change at that time and you will be notified in writing"

since the mortgage offer interest rate in june 2005 was 6.9% as we have had no correspondence and no agreement (detailing in all the small print the terms of the mortgage) then we may have been charged 10.9 since start of mortgage.i only have statements back to 2008 so dont know,but as i was asking before,surely no interest changes effectively make this a fixed rate loan or variable upwards only,whereby i thought i was buying into a fair contract of up and down rates.

Without seeing a copy of the mortgage offer I cannot say with 100% certainty what your mortgage is. However if it is a variable like you say it is then it is just that and can change at any time.

If you are on Standard Variable Rate (SVR) you are liable for interest changes as and when the lender see fit. SVR is not linked to Bank of England Rates or LIBOR, they will change as and when the lender chooses to. Just because your rate has remained for a while does not make it a fixed rate. If it was a fixed rate the lender could not make any changes to rate for the fixed period regardless of what they did to their SVR.

I suspect you were put on a Standard Variable Rate with a discount for a set period from the start. Once the discount period expired (i.e SVR -4%) you have reverted to SVR.

Which lender are you with? Is it Cheshire Mortgage Corporation?

You should get in touch the broker who arranged it if you are in any doubt.

As for not signing a final agreement, you signed the mortgage deed I assume? If you were not sure at that point you should have asked further questions or not proceeded.