Date of tracker rate changes...

Perelandra

I've been looking through the Ts&Cs for my tracker mortgage application, and have come across this little gem... was interested to see what people thought (but I realise it's not immediately relevant):

(bits in bold are the interesting bits; rest is just for completeness)

Clause 14:

14.1 We may change the terms of the agreement in accordance with this clause 14. We may change interest rates in accordance with clause 8.4

14.2 If a change under this clause is favourable to you, we can make the change with effect from such a time as we elect. We will tell you about it personally within 30 days of the change.

14.3 If a change under this clause is unfavourable to you, we will tell you about it personally at least 90 days in advance of making the change.

Clause 8:

8.4 If you have a mortgag with a variable rate of interest (excluding a Tracker Rate mortgage) [.....]. If you have a tracker rate mortgage, the interest rate will change in the circumstances set our in clause 1 of Part D of these Terms and Conditions. If we make a change to the interest rate as described in this clause 8.4, we will tell you about it after the change is made.

Part D

Clause 1:

1. The Tracker Rate Mortgage has an interest rate which is set at the fixed margin as shown in the Offer Document above the Bank of England base rate for the Tracker Rate period. During the Tracker Rate Period we will change your interest rate within one day of a change to the Bank of England base rate.


So can I read this as:

If BoE rates go down, we will make the change within 1 day, and let you know within 30 days.

If BoE rates go up, they will tell me about it 90 days in advance of actually charging the higher rate (Clause 14.3)


That seems unusually generous of the bank to weight things in my favour, and not what I was expecting from a Tracker at all!

The_J

Which bank? They may still charge the interest for those three months it just doesn't kick in for 3 months.

Perelandra

This is with First Direct. (interest only offset mortgage).

The_J

Well, rates aren't going up for 5 years so it doesn't really matter.

opinions4u

Sounds like the Payment Services Directive being implemented.

But PSD doesn't apply to tracker rates and the wording you post is a little ambiguous. I think an unfavourable change will happen within a day.

Perelandra

The_J wrote: »

Well, rates aren't going up for 5 years so it doesn't really matter.

I agree with you... but I suspect they might some time in the next 20 years, which is how long I might end up holding the mortgage!

Perelandra

opinions4u wrote: »

Sounds like the Payment Services Directive being implemented.

But PSD doesn't apply to tracker rates and the wording you post is a little ambiguous. I think an unfavourable change will happen within a day.

Hum. You're probably right, I was a little surprised...