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Hit by a change to your mortgage terms? Have your say today

Interest only mortgages

Hidden in the small print of your mortgage contract could be a clause that gives your lender the right to change certain aspects of your loan, including how much interest you pay. Do you think that’s fair?

The Financial Conduct Authority (FCA) recently published a Discussion Paper about the fairness of changes to mortgages after borrowers have signed up.

They want to hear from you about your views on fairness, including any changes you’ve experienced to your mortgage contract and how you were affected.

What you told us

We’ve heard from lots of people who’ve been hit by unexpected changes to their mortgage contracts, many of whom lost out as a result. These changes are often to the ‘price’ of the mortgage, which includes the interest you pay plus any fees and charges.

Here’s an example. Last year more than 12,000 Bank of Ireland customers with ‘tracker’ mortgages saw a sharp increase in their interest rates. Those customers signed up for mortgages that were meant to track the Bank of England base rate. However, a term in the small print (which the Bank of Ireland called a ‘special condition’) allowed the bank to increase interest rates despite the base rate remaining static. Bank of Ireland customers told us how much they’d been affected by the unexpected change to their mortgage deal.

We’re also aware of instances where lenders agree to a ‘cap’ on the interest rate applied to a mortgage, but the small print allows the lender to increase the cap. It’s hard to see how a cap that can be raised is a cap at all!

It won’t always be the price of the mortgage that’s changed. We’ve heard stories of banks withdrawing certain facilities (such as reserve or drawdown facilities) part way through a mortgage term. Indeed any change to your mortgage contract might be unfair if, when you signed up for the mortgage, you didn’t expect the change to happen.

What’s the FCA doing about it?

It’s part of the FCA’s role to consider whether changes to mortgage contracts are fair and reasonable, and to make sure that you’re adequately protected. The FCA is currently thinking about what factors to take into account when assessing fairness in this context.

The FCA issued its Discussion Paper early in the week, aimed at gathering your views on this topic. The FCA is interested in your experiences and expectations of the mortgage market and, in particular, wants to hear what you think makes a change to a mortgage contract fair.

Do you have an experience you’d like to share? Or, if you haven’t experienced a change to your own mortgage, do you have a view on what’s fair and what’s not?

If you’d like to answer the FCA’s specific questions, you can use the Discussion Paper’s online form by 30 September 2014. You can also tell us about your experiences and views right here.


Items that could significantly affect your mortgage deal should be highlighted as key points at the beginning of the agreement when it is initially being discussed. It is necessary to have detailed conditions, to ensure all forseeable eventualities are covered – so both parties can be clear about the agreement if an issue arises in the future.
“Unfair” conditions can depend upon which side of the fence you sit, but some that contradict the apparent offer, such as “tracking” and “cap” above, should be outlawed. However, should your solicitor pick these up when deaking with the purchase?

John says:
10 July 2014

l am one of the thousands of Bank of Ireland, or as l prefer to call it the bank of ill repute, mortgage customers with a base rate tracker that was changed approx. 14 months ago on the pretext of the special conditions small print factor. l have worked out that since the change from 2.25% to 4.99% it has cost me well over £5,000 extra in mortgage payments over the last 14 months and rising each and every month! l have complained to Bank of Ireland, my MP Ben Gummer and the Financial Ombudsman who seem to be taking an eternity to sort this matter out. When my mortgage started in 2003 with the Bristol & West before Bank of Ireland took them over, l was in 2008 paying over £1000 per month(6.75%). l did not complain and say to the bank that due to my special financial conditions l was going to only pay them a much smaller amount each month. However when the Bank of England base rate dropped to 0.5% the payments eventually came down to £342 on my interest only mortgage. Bank of Ireland then decided they were never going to make much profit from the thousands of base rate tracker mortgage customers like me and brought in the disputed special conditions factor. The banking scandal of 2008 continues and one thing is always certain, it is the customers that will continue to pay higher charges following the tax payer bail outs that followed the original banking collapse.

When I took out my B.T.L. TRACKER MORTGAGE with the WEST BROM back in 2007 I was paying approx 6.25% ,following the fixed period of 2 years it would revert to 1.25% above B.O.E. BASE RATE for the LIFETIME of the mortgage .this was clearly explained by my financial adviser.Due to the BASE RATE reuctions to .5% I had backed a winner .for four years the WEST BROM honoured this agreement and then decided they were losing money and implemented an initial 2% increase to approx 25% of their B.T.L. MORTGAGE BOOK.Nobody now wants to know us ,F.C.A, F.O.S. TREASURY DEPT,ALL ARE IN COLLUSION with the financial sector to F**K us over.Their will be over 2.5 MILLION TRACKER MORTGAGES AFFECTED if they suceed in their COURT CASE. Please look up PROPERTY 118 .COM ,these people have your interest at heart and are fighting your corner. I always thought a contract is a TWO SIDED AGREEMENT but clearly this is not the case now. These people and the sector are basically SCUM and will shaft you where necessary with the assistance of the REGULATORS who are supposed to be looking after the little people like me .

When the borrower wants to get out of the contract, he needs to pay a certain amount. Likewise when the bank wants to change the terms of the contract which IMO is the same as getting out of a contract, the bank needs to pay a penalty. For sure the borrower should be able to transfer the mortgage to a different lender for free without any penalty.

Peter says:
12 July 2014

I have a Buy to Let mortgage with West Bromwich. I took this mortgage out on the understanding that as advertised it was a mortgage that tracked the BOE interest rate. But no, West Brom have decided they can move the goalposts and take £191 more per month from me for no good reason. They have followed the Bank of Ireland and invoked a clause in the small print which contradicts their headline advertising and allows them to do whatever they want with the interest rate they charge.
This kind of sharp practice must be stopped. I have joined the Property118 cause to fight this battle in court. Hopefully we will win and put a stop to any more banks or mortgage companies ripping off their customers.

The FCA and the FOS should be ashamed of themselves. It is their job to show leadership and guidance, not to ask the general public what they think about things. I am sure that the responses to their questions about “whether a mortgage company should be allowed to change a contract” are going to be met with some very irate responses especially from those of us who have had to suffer at the hands of these greedy and bloated financial institutions. If I buy a BASE RATE TRACKER mortgage I expect it to TRACK THE BASE RATE. A child would understand this concept. Clearly our regulatory bodies don’t.

Satnam Lotay says:
10 August 2014

I took out a abbey national mortgage in 2003. It was to track the Libor rate + by a maximum of 3.75%.
Suddenly out of the blue,Santander, who took over Abbey national increased the maximum add-on by 1.5%.
This was totally unfair as this was so much in excess of the original contractual position.They then increased the interest rate by the same amount. Of course , the mortgage payments shot up by a huge amount.
Secondly, since my mortgage is over 10 years old, it is out of any penalties for early redemption.Therefore any sane person would assume that they cannot levy early redemption charges.
However, my latest statement show an early redemption charge of nearly £4000 on the outstanding balance of only £74000.
In the event that this is not a huge mistake, then in my opinion they have no contractual right to levy such a charge.
I would appreciate any comments and offers of help would be very gratefully received.

Richard Graham says:
27 October 2014

I remortgaged to buy another property 11 years ago,we were self employed at the time and had the plan that if we hit financial difficulty or needed some extra cash we could sell the first property to release equity.Our bank RBS have informed us that we wil not be able to do this unless we can satisfy the requirements for new mortgagees established in April 2014.This now prevents us from selling our first property as we are too old to get a long enough mortgage term to pay off the remainder of our mortgage.
How can they now say that our mortgage terms are different to the terms we signed for?
Ps I have considerable equity,but I would have to sell both properties to be mortgage free.
I have been advised to check land registry details for each property as a start point to contest this.

Harriett Montague says:
30 June 2015

The Co-operative Bank has written (June 2015) to all Britannia mortgagees stating it has made a mistake by originally omitting to provide us with tariff fees and are now sending us this list which is effectively a change to the mortgage terms and conditions by introducing/increasing many tariffs (eg,exit fees, admin fees, 1% letting fees). Are we to just accept this change of goalposts without any means of recourse?