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CAT Standard
CAT standard mortgages are designed to be straightforward clear and fair. There are two: one for a loan charging variable interest rates and one for a loan which begins with a period when the interest rate is either fixed or subject to an upper limit (capped). Loans of this kind may not suit every borrower. There is no implied Government approval or guarantee.
The basic features of CAT standard mortgages are set out below and explained in the notes which follow.
| variable rate | fixed or capped rate | |
|---|---|---|
| charges |
No separate charge for mortgage indemnity guarantee insurance. Any other fees disclosed upfront, including any fees and charges which may be payable later in the mortgage. Interest calculated and accrued daily; compounded annually. |
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No fee payable by the borrower for arranging the mortgage. Interest rate no higher than x percentage points above base rate. No redemption or early settlement charge at any time. |
Any booking fee not to exceed [£200]. Any redemption charge during period when interest rate is fixed or capped not to exceed y months' interest; and must decline evenly (or faster) over this period. No redemption charge after the fixed or capped rate period. |
|
| access |
No restriction to existing customers. Mortgage available on the normal terms on which the lender grants loans, including loans for the lender's normal range of residential properties, and the lender's standard criteria for creditworthiness. Regular repayments on a choice of z days of the month. Early repayments permitted at any time. |
|
| terms |
All mortgage documents, including advertising and marketing literature, and explanations of charges,
to be put in language which is fair, clear and not misleading. No tying in, ie no obligation for borrowers to buy any other product with the mortgage. Any linked special offers to be priced item by item, with discounts expressed explicitly where they apply. If the lender can no longer continue with CAT standard terms in an existing mortgage, borrowers must have at least [6] months' notice of the change. Borrowers in arrears equivalent to up to [3] months' repayments pay standard interest charges only on the outstanding debt (including accrued interest). After that period the lender may decide that CAT standard terms no longer apply. |
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