Can Pepper increase the intererest rate on ptsb loans?

Discussion in 'Mortgage arrears & negative equity case studies' started by Brendan Burgess, 12 Dec 2018.

  1. Brendan Burgess

    Brendan Burgess Founder

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    36,349
    Some mortgage contracts give the lender the power to vary the mortgage rate at its sole discretion. But the ptsb mortgage contracts I have seen appear to tie in the mortgage rate to some ptsb rate e.g. the SVR.

    So if ptsb does not change its SVR, then Pepper can't increase the rate on the loans it has bought.

    Here are two examples of the wording on ptsb contracts

    Managed Variable Rate

    Once a rate has been switched from the existing rate applicable to the loan to the appropriate Managed Variable Rate in accordance with the Offer, no further switch will be permitted (save a switch to a fixed interest rate where available) and the borrower will be bound to repay the loan at the appropriate Managed Variable Rate as may be varied from time to time at the discretion of the Bank during the remaining term of the mortgage. Accordingly such variations may be made without regard to variations in any other interest rate used by the Bank (including any Managed Variable Rate applicable to different LTV bands, any other rate based on LTV ratios, the permanent tsb standard variable rate or the European Central Bank rate) and irrespective of variations of the LTV ratio of the borrower’s loan during the remaining term of the mortgage.

    For the avoidance of any doubt, the Bank may vary the Managed Variable Rate applicable to any particular rate band from time to time at its absolute discretion.

    Standard Variable Rate

    upload_2018-12-12_8-57-1.png

    These are from loans which were not sold to Pepper. If your loan was sold to Pepper and it's not a tracker mortgage, I would be interested in seeing what wording was used in the contract about the setting of interest rates.

    Brendan
     
  2. Duff123

    Duff123 Registered User

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    13
    Last edited by a moderator: 13 Dec 2018
    Hi Brendan. My fears exactly summed up. Peppers interest rates from what I can see are a lot higher than PTSB. I recently fixed for three years with PTSB so what SVR I will face from Pepper when I come out of this is very uncertain.
     
    Last edited by a moderator: 13 Dec 2018
  3. Brendan Burgess

    Brendan Burgess Founder

    Posts:
    36,349
    Hi Duff

    Could you post the relevant sections from your contract and whatever you signed when you fixed?

    If the contract refers to the Standard Variable Rate, then, IMHO, Pepper will be restricted to charging you the ptsb SVR.

    Brendan