GE Money - Disappearing 2% per annum reductions?

CI85

In 1985 along with a number of other customers I took out a mortgage with the Canadian Imperial Bank of Commerce.

Within the General Conditions of that mortgage it is stated -

'Interest on the loan will be payable monthly in arrear by direct debit.'

And

'The specified rate of interest and Monthly Payment take account of a reduction of two per cent per annum which will be made if but only if interest is received by the Bank within 7 days of the date on which it is due and if there are then no arrears.'

As time has progressed my mortgage is now being administered by GE Money Home Lending - not by choice but as a result of mortgage books having being sold on by various Banks and Financial Institutions.

In calculating my mortgage repayments GE Money state they use the GE Money base lending rate. Since March 2009 this has been charged at 7.94% (i.e. 7.24% above BOE / BBBR base rate). The GE Money base lending rate has been / is detailed on the GE Money website.

Originally the mortgage rate charged against the mortgage worked out in very general terms at circa 2% above the BOE / BBBR base rate.

Whilst direct debits payments are made on time and there are no arrears the annual 2% discount / reduction as mentioned in the General Conditions of the mortgage appear to have disappeared.

Is anyone aware of the 2% per annum discount / reduction that exist with CIBC mortgages?

Does anyone know what GE Money may be doing in relation to administering a 2% per annum reduction that applied to those original CIBC mortgages?

Thrugelmir

When mortgages are sold on. The new lender can amend the contract terms having given due notice.

Few people in my experience read the documentation that is sent to them from financial institutions. When events like this occur.

CI85

I have never received anything from GE Money which details the contract terms have changed.

I made a Data Subject Access Request (DSAR) and whilst I have been given two versions of my notes which include different content neither file set includes any details of any correspondence which makes reference to any changes to contract terms.

Addition....

When GE Money Home Lending took over the mortgage it was stated...

The company name of your lender, First National Home Finance Limited, is changing to GE Money Home Finance Limited and when we write to you from that date we will contact you as "GE Money".

This means that if you make repayments via direct debit your future Direct Debits will be collected by GE Money Home Finance Limited with effect from your next payment date following 4th October 2005.

In addition, for cutomers with a variable interest rate linked to the published base rate of First National Home Finance, please note that the new short name for this rate will be the "GE Money base lending rate".

You are not required to take any action. Details of this change have been supplied to your bank / building society and your rights under the Direct Debit Guarantee (see enclosed) are unaffected. Also these changes do not affect any other terms and conditions, nor any permission you have given us to speak to any third party about your account.

CI85

During 2011 GE Money confirmed in writing -

'The terms of the mortgage did not alter at any point when there was a change of administrator.'

And

'You've mentioned a 2% discount has not been applied to your account for sometime and I understand this would have been applied if the account was up to date and payments were received on time.'

Since receiving the above details in writing I have forwarded to GE Money copies of Annual Statements for the mortgage dating back to 1999 / 2000 which show all Direct Debits have been paid on time and there are no arrears.

Unfortunately I still have not received a 2% discount / reduction per annum.

Typhoon2000

I read your first post to mean that the standard interest rate you have being paying to CIBC already reflected to 2 % discount for on time payments. And that this discount you have been receiving would no longer apply if you didn't pay on time or were in arrears?

CI85

Typhoon2000 wrote: »

I read your first post to mean that the standard interest rate you have being paying to CIBC already reflected to 2 % discount for on time payments. And that this discount you have been receiving would no longer apply if you didn't pay on time or were in arrears?

As I understand it the GE Money base lending rate applies across the board to various mortgages.

The GE Money website currently details -

Mortgages taken out prior to 6 August 2010

Previously our reversionary rates moved in line with the Barclays Bank Base Rate (BBBR), which in turn tracks the Bank of England Base Rate (BOE). Those customers sold a loan prior to 6 August 2010 will continue to have their rate linked to BBBR.