Mortgage Rate Change

Posted on 6 March 2012 by john

Can my mortgage company change my terms and conditions of my mortgage without my consent . They have sent me a letter informing me that they are changing how they calculate the monthly cost of my mortage. It used to be 1.5% added to libor rate for the rest of the mortgage term. They are changing it to the base rate plus up to a max of 1% added the base rate + the 1.5 % , so with libor being at approx just over 1% , I will be paying more using this method. How can SPML legally amend this , along with other changes like how they charge.


The answer to this will lie in the mortgage offer you received prior to completion and the Mortgage Conditions applicable at that time.  If you do not have a copy of the Terms and Conditions, SPML should be able to provide you with a copy and to point out the applicable sections.

It is likely that there is a clause allowing them to change the basis of the interest calculation so long as they give you a period of notice, say 1 month?  No doubt you will have heard in the news about Halifax increasing their SVR from 1st May, I'm sure that wanted to do it sooner but were required by their terms and conditions to give notice.

If SPML are not able to provide you with a copy of the T&C's or you still do not think that they are entitled to amend your interest rate then you should ask what their complaints procedure is and start the necessary process.  Ultimately the Financial Ombudsman will not listen to any complaint if you haven't already reached deadlock using the Lender's procedure.


Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.

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