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Fifth consecutive rate cut causes lender systems chaos!
Many fortunate tracker mortgage holders are looking forward to paying as little as eight pence a month for their mortgages following Thursday’s Bank of England base rate cut to it’s new record low of 1%.
They include those who took out tracker loans with the Cheltenham & Gloucester 2 years ago at 1.01% below the Bank of England base rate. This could mean oddly that they should be charging their lender for their mortgage.
Cheltenham & Gloucester stated it's systems cannot handle zero or negative interest rates therefore 0.001% will be charged until they can adjust the computer set up correctly. On an interest only £100,000 loan, this amounts to payments of 8p per month.
Lenders defended their position claiming they will never pay their borrowers interest, even though rates have become negative. However it could be an interesting point to raise with your lender from a legal standpoint.
