Mortgages Uncovered

The reality for thousands of people is that their mortgages may well be 8p a month mortgage due to over generous lending of building societies and banks, products that were available during the over generous lending period before the credit crunch hit.

Those borrowers who could see this incredibly low mortgage payment monthly are some of the thousands of borrowers who took tracker deals struck in summer of 2007- these people could likely pay no interest and incredibly may even be in a good position to demand payment back from their building societies / banks due to a strict interpretation in the fine print.

This is down to BofE base rate cuts.

Out of the largest beneficiaries it will include thousands of Cheltenham & Gloucester customers taking trackers in July 2007. Lloyds Banking Group have said that due to there being no zero floor to the tracker deals and due to their computer systems being unable to cope with the figure zero, the bank would have to temporarily charge 0.001% should the base rate be cut to 1%.

For those borrowers on £100K interest only mortgages it translates to monthly interest payments of 8p. Those borrowers who took out repayment mortgages will continue to pay more due to principal repayments being included in monthly bills.

Lloyds said “Borrowers will later be refunded the 0.001 per cent overcharge”

More mortgage information:
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