Hi I have 3 discounted (0.6 below base) B2L trackers and two other trackers .6 over BOE base.

Three discounted B2L's are with Birminham Midshires. My others are one life Tracker with the Woolwich and one 2 yr tracker with BOS.

Two questions?

What happens to these discounted mortgages should Base Rate go to 0% and do you know if any of these companies have a "Collar" on their trackers?

Thanks

Hi....your BM and Woolwich have no collars, but they won't pay you money if your discounted trackers fall below 0% :) Not sure whether BoS have collars as Halifax do, so check that offer for the wording.

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Regards

Ian

completefinance:Hi....your BM and Woolwich have no collars, but they won't pay you money if your discounted trackers fall below 0% :) Not sure whether BoS have collars as Halifax do, so check that offer for the wording.

I think you'd find with them both, if the BOE rate falls below 0.00001% then thats the rate you would get, they all have a clause that they will not allow you to have a negative interest rate.. and by "but they won't pay you money if your discounted trackers fall below 0%" its the same thing.. your rate will never go below 0.00001%

Thank you for your replies they are very interesting.

I notice Completefinance states my payments wont dip below 0.00001% and the bank wont pay me money. This has been contradicted by Ray Bolger of Charcol who states that as the fees for these mortgages were expensive (I paid 2.5%) then if we should get to a negative position where (if the boe was 0%) the bank would have to pay me. This payment he went on, would not go into my account but would be deducted from my capital.

Could we have maybe the definitive answer from MB or Woolwich? I HAVE asked them both but both seem to not want to answer me.

Hi....Mr Bolger is not correct and the bank would answer that your agreement was based on a borrowing rate not an investment rate. As with offset mortgages the excess amount on current accounts does not earn interest, as it does on offsets that use savings and investment accounts. This would be the basis of your lenders argument. The amount you paid in fees is irrespective, you have the opportunity of paying these fees upfront and if his argument was upheld the clients who did pay their arr fees upfront would be due for a refund. I think Mr Bolger is talking a load of rubbish I'm afraid :)

I think you are finding it hard to get a definitive answer from your lender because it is a joke:)

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Regards

Ian

Thanks Ian, and everyone else,

Your advice is appreciated.

Thank You