With the credit crunch hitting many families hard, unemployment rising and the country in the grip of recession, many are having trouble with their mortgage payments. This doesn’t apply to customers of C&G who took out tracker mortgages in July 2007 however, as they’re poised to enjoy a mortgage repayment of just 8p per month. This is as a result of the generous loan terms that were offered by banks just before the credit crunch began last year.
The bizarre situation could get worse as some borrowers could technically demand payment from their lenders if they follow the fine print on their mortgage agreements to the letter!
It is expected that the Bank of England will cut the interest base rate this week to just 1%, which means that C&G customers who are on the tracker mortgage with a base rate minus 1.01% could be paying nothing, and should in actual fact receive payment from the C&G.
Lloyds TSB however has stated that there is a floor to the offer of zero, and because their systems couldn’t cope with such a figure, they’ll be charging lenders 0.001% if, as expected, the base rate is cut by the Bank of England this week to just 1%.
Based on those figures, anyone who has a tracker mortgage from the C&G for a loan of £100,000, paying an interest only mortgage, would have to pay just 8p per month on their mortgage.
Furthermore, according to Lloyds TSB, they would then be refunded the overpayment of the 0.001%.