Losing CAT Standard??

Money_Cub

hi everyone,

hsbc (currenty mortgage prov) have approached me to give me a 'better deal' on my mortgage.

im currently on their svr of 6.25%

they are suggesting I swap to the tracker at 0.74% above base rate, so today would be 5.99%

the current mortgage is subject to 'CAT' standard and has a guarantee for the life of the mortgage that the rate will not increase more than 1% above the base rate.

would anyone know what it means to lose the 'CAT' standard?

thanks a lot mse's.

homer_j_3

The guarantee is nothing if the offer on the table is a lifetime tracker rate with no tie ins.

If its not a lifetime and has tie ins then the loss of the cat standard could means that you are on 7.5% when the tracker ends rather than the comfort that you have now.

Money_Cub

Thanks HJ, sorry for delay in coming back, easter and everything...

Can you tell me what you mean by the guarantee is nothing?

The offer is just what's on their website, which I beleive is a lifetime tracker with no tie ins.

Am not clear on the options here, which do u think is the better deal?

homer_j_3

The cat standard gives you a lifetime of protection that they will not charge you more than 1% of the BOE rate.

If you are going to a tracker that guarantees to track the BOE rate by no more than 0.74% then the cat standard protection means very little to you as you are actually decreasing the amount that they can charge.

The only thing that cat may have an advantage on is the T&C's and charges may be more beneficial in other areas (statement fees may be less for duplicates for example). Without seeing all the paperwork, its difficult to tell. If you are just looking at rate alone, then the change seems ok on face value.

Money_Cub

Thanks very much, I appreciate you taking the time to explain.

I'll give it a thorough look over and a few phone calls to provider etc, but am grateful for your independent view.