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Can I reclaim 2% mortgage interest?
DJGEEEE
Posts: 2 Newbie
Hello
I have a very good mortgage deal at present, where I pay 0.18% on top of the Bank of England Base rate for the term of the mortgage. However, the mortgage terms state that the lowest rate that they will honour is 2.5%. This means that despite the rate being 0.5% for some years now, I am still paying 2.68% interest.
Is it lawful for the bank to fix the interest rate at 2.5% even though the actual Base Rate is 0.5%?
I suspect I know the answer, but I thought it was worth asking the question.
Thanks all
DJGEEEE
I have a very good mortgage deal at present, where I pay 0.18% on top of the Bank of England Base rate for the term of the mortgage. However, the mortgage terms state that the lowest rate that they will honour is 2.5%. This means that despite the rate being 0.5% for some years now, I am still paying 2.68% interest.
Is it lawful for the bank to fix the interest rate at 2.5% even though the actual Base Rate is 0.5%?
I suspect I know the answer, but I thought it was worth asking the question.
Thanks all
DJGEEEE
Am I getting a good deal? 17 votes
Yes - stop wining about it
94%
16 votes
Yes
5%
1 vote
No - there are better deals out there
0%
0 votes
No - you should be entitled to make a claim
0%
0 votes
0
Comments
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You mortgage has a collar, that you are aware of, of course you have no claim against the mortgage lender! The only claim you may have would be against the person that advised you to take it, and only then if you specifically requested no collar as its a standard condition in your mortgage.I am a Mortgage Adviser
You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Think of it this way. Its almost like a fixed rate. Even if the base rate goes up 2% you will still be paying the same rate. The base rate isnt going to go up anytime soon, so 2.68% for the next few years isnt bad at all. In fact its GREAT!
And yes it is lawful, its called a collar and will be in the T&Cs of the mortgage deal (if it wasn't you would have a case).This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0 -
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I would kill to be on that rate.I am extremely jealous of you.Hope that helps you feel better.0
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Mortgages are like dogs in a lot of ways. They have collars and sometimes they raep your leg. Unfortunately they're not like goldfish, which you can throw in next door's garden or flush down the toilet when you get bored of them. No, a mortgage is for life, or at least a significant fraction of it. If you want to get rid of it, you have to be creative. Leave it at the side of the of the road somewhere far away from your home, or bury it up to its neck in dirt and shoot it in the face from your bathroom window.0
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Thanks all for your feedback. I do feel a lot better now. Cheers.0
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