Can you trust your tracker mortgage?

West Brom was last week entitled by a court who ruled that it should increase its tracker rates. Is your landlord going to follow this suit?

trackerIs your tracker mortgage going to come with possibly costly fine print? Get your best mortgage broker go over it with you very carefully. The building Society of West Bromwich affected Landlords by their tracker rate hike, since they were rightly increased this week when lenders got their victory in court. To them were sold loans which were promised to save them from discretionary rate incensement appointed by their lenders (which was different from standard changes in rate deals). Thousands of others including them, paid some premium in order to be secured by the knowledge that their rate is not going to rise, unless in the case of the raise of Bank rate on Bank of England. Mortgage brokers and Landlords marketed the loans they bought like this, and the ones which are still on the market are marketed the same. In the contracts there has never been any uncertainty about how loans will behave, so a lot of people were captured of their guard by this. Even on the official site of West Brom you can read that the rates will change only if the rates of Bank of England move. But the borrowers were cheated, since the trackers they took definitely don’t do what they are supposed to.

Of course if you encounter things that are not to your liking, then you might want to seriously consider doing a home loan refinance to a more user friendly loan product.

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The court made a decision that the tracker rates which rose on 29 of January this year were legal. And landlords are going to sue West Brom, since they clearly broke their promise from 15th March 2014. The court ruled that Lenders had an absolute right to raise tracked mortgage, no matter that Bank rate wasn’t changed at all.

This in many cases has left borrowers feeling like they have been dealt with the same as if they were with the type of lenders that do Centrelink loans

Since not making enough margin profit, West Brom gives itself a right to make higher rates. And some months later they made 2 small contractions, since market conditions were improved a little. So we ask ourselves what is the difference between these mortgages and the standard with rates that are variable, if both are changeable in contrast to conditions on market?

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There are many of them who did this, not only the west Brom. And now people want to know what this means to millions of people in United Kingdom who borrowed with these tracker products? Can really lenders make their own decisions to change and increase their margins whenever they feel a need for it according to changes in economic conditions? One of the repercussions from this is it makes it more difficult for mortgage holders to engage in rapid mortgage reduction strategies.

tracker-mortgage-peterboroughThe answer is in your loan’s conditions and terms, and the kind of borrower that you are. The ones who are residential and have landlords who have single to let property have smaller chances to get affected , since they are camouflaged by a regulations for consumer protection, but landlords with so-called multiple by to let properties does not have this. These kinds of regulations are not focused only on contract law but more on the way in which products were marketed and sold at the end. One thing that also may help is to switch to fixed rate product, now since at this moment interest rates are very low. With this kind of rate you will be secure by knowing that your rate won’t run high before the date you set.