Trackers - do all lenders have the clause that lets them put rates up?

pinkteapot

Just reading about the Bank of Ireland complaints, after they increased the mortgage rate for people on base rate trackers, using a clause in the mortgage contract that lets them vary the rate outside of base rate movements.

Do all trackers have this clause?

We currently have an HSBC tracker and I don't know if we have this or not.

More to the point, we're now looking at a Santander tracker and I know that they're not the friendliest lender!

Thrugelmir

Read your contract.

At the very least there'll be an all encompassing exceptional circumstances clause.

Directors of banks and building societies do have fiduarcy duties under law.

Since 2008 we have been living in exceptional times. This weeks events at the Co-Op show how 5 years on, the past is still unfolding.

Leon_W

Ridiculous isn't it.

When is a tracker not a tracker. All you have to remember is these lenders can employ the best lawyers, tell you black is white, get away with it, and even have the supposed regulator agree with them that black is indeed white.

I wouldn't even bother reading the contract because if the lender does decide to turn you over, then I'm afraid, unless you have very deep pockets, there isn't much you can do about.

kingstreet

I suspect all lenders will have quickly ensured their new mortgages have such a clause. Those who may not have had one in the past, Lloyds, Nationwide etc, stuck with base + 2% have changed their follow-on rates anyway and those who could, have made the changes the clauses allowed.

So far, no lender has come out and said "we have no such clause" and if they did, they would have a considerable market advantage, so the deafening silence may be an indication.

No alternative but to read the full terms of each product under consideration.

pinkteapot

Thanks all, might check our HSBC contract tonight.

To be fair, we're at 52% LTV so if Santander screw us we'll just move to someone else. Still, it gives pause for thought! I've been insisting on BoE base trackers only (don't want one that tracks some weird and wonderful rate, or, better yet, the lender's own "base rate"!).

surreysaver

Thrugelmir wrote: »

Since 2008 we have been living in exceptional times.

If its been since 2008, the conditions are no longer exceptional?

Gloomendoom

We have had a Barclays lifetime tracker mortgage since 2006 and that uses Barclays own base rate which is 'based' on the BofE base rate. I haven't delved that far into the small print but I suspect that Barclays could raise the rate on a whim.

So far, so good though. If the rate rises significantly, I'll pay it off.

kingstreet

Gloomendoom wrote: »

We have had a Barclays lifetime tracker mortgage since 2006 and that uses Barclays own base rate which is 'based' on the BofE base rate. I haven't delved that far into the small print but I suspect that Barclays could raise the rate on a whim.

So far, so good though. If the rate rises significantly, I'll pay it off.

It can. If you do a search about "Barclays Bank Base Rate" you'll find a thread where the OP has examined this closely.

pinkteapot

Really? Did I?!

ACG

Another way to look at this is the likelyhood that the lender would raise interest rates significantly.

If they did, they could potentially be in a position of having to repossess all of the properties on their books - is that likely?

kingstreet

pinkteapot wrote: »

Really? Did I?!

Not you. Not the OP here. The OP of the thread in question;-

https://forums.moneysavingexpert.com/discussion/545126