Bank charges very high interest rate - where do I stand?

achilles1

Hi,

I have a buy-to-let mortgage with Standard Life Bank and they charge me an extortionate amount of interest (7%). I asked them to move me to another product that offers a more affordable rate but they refused.

Where do I stand legally? Can I take them to court? Can I complaint to the authorities on the grounds that the rate they charge is unfair? (BoE rate is only 0.50%).

Your help is appreciated.

A.

[Deleted User]

You can choose not to have your mortgage with the, if you can find a better deal elsewhere. It's the rate they choose to charge for their product. Not illegal.

Thrugelmir

Unfortunately you have no grounds of appeal. Although you say this is a high rate. I suspect your rental yield is higher than 7%. In business you have to adapt to changing circumstances continually.

If its not may be consider selling the property , or remortgaging elsewhere. Which in reality is what Standard Life wish you to do. Standard Life sold their mortgage book to Barclays I believe. So SL ae trying to run it down as quickly as possible.

_Andy_

achilles1 wrote: »

Hi,

I have a buy-to-let mortgage with Standard Life Bank and they charge me an extortionate amount of interest (7%). I asked them to move me to another product that offers a more affordable rate but they refused.

Where do I stand legally? Can I take them to court? Can I complaint to the authorities on the grounds that the rate they charge is unfair? (BoE rate is only 0.50%).

Your help is appreciated.

A.

In answer to your question, no.

Sounds like you're on a variable rate rather than a tracker so there is no obligation for them to pass on base rate reductions. You would have known this when you took the mortgage with them.
No lender is obliged to offer new deals to customers.
Take them to court? for what? Making profit?
Would you take Tesco to court for charging £1 for a loaf of bread even if the cost price was much less?

achilles1

Thrugelmir wrote: »

Unfortunately you have no grounds of appeal. Although you say this is a high rate. I suspect your rental yield is higher than 7%. In business you have to adapt to changing circumstances continually.

If its not may be consider selling the property , or remortgaging elsewhere. Which in reality is what Standard Life wish you to do. Standard Life sold their mortgage book to Barclays I believe. So SL ae trying to run it down as quickly as possible.

Thanks for the advice. Unfortunately my yield is under 7% and the property has negative equity. Also, it is practically imposible to sell it right now.

I could re-mortgage to another bank and get a better rate but I would have to make up the equity shortfall. Which is why I am trying to find a way to make Standard Life reduce their rate or move me to anoither product.

BTW, now that Baclays have taken them over, do I get access to their range of mortgages?

beecher2

As you're in negative equity you don't have any options other than paying off a substantial sum of your outstanding debt. You have no chance of forcing anyone to give you a deal.

JimmyTheWig

What was the rate when you took out the mortgage?
When did you take out the mortgage?

Thrugelmir

achilles1 wrote: »

Thanks for the advice. Unfortunately my yield is under 7% and the property has negative equity. Also, it is practically imposible to sell it right now.

Then the 7% interest rate reflects the risk. You'll be unable to remortgage in your current position.

Have you another property that you could remortgage to repay the negative equity

GMS

achilles1 wrote: »

Thanks for the advice. Unfortunately my yield is under 7% and the property has negative equity. Also, it is practically imposible to sell it right now.

I could re-mortgage to another bank and get a better rate but I would have to make up the equity shortfall. Which is why I am trying to find a way to make Standard Life reduce their rate or move me to anoither product.

BTW, now that Baclays have taken them over, do I get access to their range of mortgages?

There is no product available to move to. Nobody does 100% mortgages full stop so you cannot change it.

Even if you had access to Barclays (Woolwich) mortgages there would be no product for over 100% LTV.

If you can afford to make up the equity shortfall would you not consider selling instead given that your rental income does not cover the mortgage?

opinions4u

achilles1 wrote: »

I have a buy-to-let mortgage with Standard Life Bank and they charge me an extortionate amount of interest (7%). I asked them to move me to another product that offers a more affordable rate but they refused.

Unless your mortgage had some sort of guarantee built in to it forcing them to offer you alternative rates, there is no requirement for them to do anything.

Where do I stand legally? Can I take them to court?

You have a democratic right to puruse legal action if you choose to. They will defend the action, win the case and you will be liable for their court fees.

Can I complaint to the authorities on the grounds that the rate they charge is unfair? (BoE rate is only 0.50%).

Which authorities? You entered in to a business venture with a plan off borrowing lots of money to fund your property empire. Market conditions turned against you and your business empire is a dud.

Ultimately, I'm afraid, your stuck in a corner and there's nothing you can do about it.

achilles1

GMS wrote: »

There is no product available to move to. Nobody does 100% mortgages full stop so you cannot change it.

Even if you had access to Barclays (Woolwich) mortgages there would be no product for over 100% LTV.

If you can afford to make up the equity shortfall would you not consider selling instead given that your rental income does not cover the mortgage?

But what I am talking about is simply porting the mortgage to a different product within the same banking group, i.e. Barclays. Standard Life have pulled out of the mortgage market but their parent, Barclays, still do them.

Since you are a mortgage advisor, do you think I have the right to transfer the mortgage to Barclays?