Author Topic: Tracker mortgage rate promises broken.  (Read 8223 times)

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The Prophet

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Tracker mortgage rate promises broken.
« on: March 11, 2013, 01:53:09 pm »
Around 750,000 borrowers have a 2.5% Nationwide tracker where the rate is guaranteed never to be more than 2% above the Bank of England base rate.
C&G also offer the same promise on its standard mortgage rate.
The Bank of Ireland has recently used small print conditions ("in exceptional circumstances") to increase the margin at which they track the BoE base rate for their tracker mortgages, increasing costs for 13,500 borrowers, some may see costs double.

Skipton Building Society and Halifax both broke their promise last year on their "guarantee" to track the base rate by no more than 3%.

Tracker mortgages gained in popularity as people became increasingly aware that mortgage rates went up quickly when the base rate increased, but came down slowly when interest rates fell and not all the benefit was being passed on. Now lenders, looking to maximise returns, are realising they are not such a great deal for them when the Bank Rate is as low as 0.5% and are increasing the margin between rates charged and the BoE base rate.