Hi Hannah,

Having just received Chesham's reply I can confirm you are right i.e. the interest rates will continue to track the BoE base rate. Here is their response:

"...You highlighted in your conversation with my colleague XXX that you were concerned about the impact that our proposed merger with Skipton BS might have on the interest rate on your base rate tracker mortgage product where your interest rate is stated to be 0.39% above Bank of England Base Rate. You have requested confirmation in writing that the rate on this mortgage will not change as a result of the merger.

The specific terms of your mortgage offer dated 29 March 2006 state (in part 4 on page 2) that the interest rate on your mortgage is a variable rate, which is 0.39% above the Bank of England Base Rate, and it will continue to track the Bank of England Base Rate for the term of the mortgage. You have queried the new condition 2 on page 28 of the merger booklet which states that unless the terms of your mortgage offer provide otherwise, Skipton BS can increase the rate of interest for the valid reasons set out in condition 2. I can confirm that the new condition 2 does not affect this provision of your mortgage as your offer is clear that your rate will track the Bank of England Base Rate.

Therefore, whilst the terms of your existing mortgage will continue to apply save as varied by the terms and conditions stated in the merger booklet, none of those terms can affect the interest rate on your mortgage and the interest rate on your mortgage will continue to track the Bank of England Base Rate"

That's good enough for me, so I for one will be voting for the merger.

Cheers

Phil

Hi Phil,

Thanks for the post, v useful to others who may be in the same boat.

If you have base rate tracker mortgage then this will be linked to the base rate for the term of the mortgage deal and the only changes to the rate will be when the base rate changes, however if you had a variable rate product (linked to the lenders SVR) then the lender could make changes to this rate at any time as Skipton have recently done.

I am presuming that the section you have noted is a general piece about the lenders interest rate (their SVR) and not specifically about a tracker mortgage however do let us know when you get response back from Skipton, I'd be particularly interested if it is any different to this.

Hannah-Mercedes

To all those with a Chesham base rate tracker mortgage, I'd like to draw your attention to page 28, section 2 of the Merger booklet:

"(a) ...We can increase the Interest Rate at any time if we reasonably believe that the increase is needed for any one or more of the following reasons...:

(i) to reflect, in a proportionate manner, changes in the Bank of England repo rate (being the Bank Base Rate) or in interest rates generally charged by our competitors in the Mortgage market"

Does this apply to the Base Rate Tracker mortgages, i.e. can Skipton up the interest rate charged to around the national average, even though the Merger booklet clearly states overwise (see bold writing on page 5, Q16)?

I posed this question to the Chesham member helpline & spoke to a very helpful lady who promised to get a response directly from Skipton BS to me in the next couple of days.

When I get their reply I'll update this thread. Til then, if you've got a tracker mortgage & were going to vote 'Yes' to the merger, then I'd recommend you hold fire until I've posted the Skipton response.

Cheers

Phil