Brendan Burgess
Founder
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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
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
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
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