News Tristan on 31 Jan 2009 08:52 am
Could Your Lender End Up Paying You Interest Each Month?
As the recession has hit hard over the last few months, we have seen the Bank of England lower the base rate to an astonishing and all time low of 1.5%, meaning that many of us on tracker rates are now paying less than half the amount of interest that they were this time last year.
But what if the base rate were to go any lower? Well, there is widespread speculation that it will go lower, I even wrote about my interest rate predictions for 2009 / 2010 in an article not long after the last base rate announcement earlier this month, and predicted it to reach 1% in the first half of 2009.
So if the base rate does go any lower, perhaps down to 1% in next week’s announcement, what effect will this have on many borrowers? Well, according to The Times, there will be a small percentage of people whose tracker rates are at a margin sufficiently below the base rate, that their lenders should actually have to pay the borrower money each month.
In the article, it states that some Cheltenham & Gloucester borrowers are on tracker deals which are base rate, less 1.01%, so if the base rate goes down to 1%, then there interest rate drops to -0.01%.
However, the lender has stated that there is a zero floor on this deal, and in fact it’s computer system cannot cope with not charging interest, so these customers will in fact have to pay a pathetic 0.001% interest, or equivalent to £1 per year in interest, which is a shade over 8p a month. I wonder how many of these lucky customers will get giddy with the extra money in their pockets or simply over-pay the capital on their mortgages?
on 02 Feb 2009 at 9:20 pm 1.cornish dragon said …
As a “lucky” C&G tracker mortgage borrower I look forward to saving my 8p a month in a big pot at home
I certainly won’t be spending it any time soon.
Although it is yet another dirty trick by the banksters not too pay me what I am due I will check my small print very carefully on this one.
No I won’t be over paying my capital either as total world and personal “debt annulment” can be expected next year on the collapse of the world finance/ ponzi
fraud ;)
CU
CAD
on 03 Feb 2009 at 10:50 am 2.Tristan said …
If you find after having read your small print that they do owe you money, please let me know and I will do a follow up article, encouraging more C&G customers to take the lender to task.
I lost a number of deals last year to C&G, who are owned by Lloyds TSB (or whatever they’ve been renamed now they are state owned), and I owe money to Lloyds TSB, though they weren’t in the least bit sympathetic when I explained to their dumbass collections department that their sneaky “dual pricing” in the mortgage market contributed to my business failing, and as such I thought they should be a little more understanding of my circumstances.