CAT Mortgages
CAT stands for Charges, Access and Terms. The Government announced in April 2000 minimum standards a mortgage had to meet in order to qualify as a CAT mortgage. Although most of the specific requirements for a CAT standard mortgage are desirable in isolation they will not all be important for most people. Because a CAT mortgage has to meet every single specified condition most CAT mortgages may often be uncompetitive compared with other similar mortgages from the same or different lenders. Furthermore, many lenders are currently unable to offer CAT mortgages because one requirement is that interest must be calculated daily and their computer systems cannot cope with daily interest calculations.
Some of the main requirements a CAT mortgage has to meet are:
- Interest must be calculated daily
- The mortgage must be available to the lender's existing borrowers
- The minimum mortgage size, if one is specified, can not be more than £10,000
- The maximum booking/arrangement/completion fee that can be charged on a fixed or capped rate mortgage is £150
- No such fees can be charged on a discount/variable or cashback mortgage
- The maximum Early Repayment Charge that can be charged on a fixed or capped rate mortgage is 1% for each year of the remaining fixed/capped period and this maximum reduces monthly
- Discount/variable and cashback mortgages cannot have any Early Repayment Charges
- The maximum interest rate that can be charged on a variable rate mortgage is 2% over Bank Base Rate
- Borrowers must be able to choose any day of the month up to the 28th to make their repayments
- Broker fees cannot be charged
- Telephone: 01443 842 452
- Fax: 01443 841 723
- Address: 1st Floor Unit 6, Charnwood Court, Heol Billingsley, Parc Nantgarw, Cardiff, CF15 7QZ
- info@mortagefinancial.co.uk
