Mortgage rate rise announcement by lender exploiting contract loophole.

Manchester Building Society are to bring in a mortgage rate rise. The lender has confirmed that its tracker rates are to increase, which is surprising news since the base rate has not altered for some time.

Little known contract clauses are allowing some mortgage providers such as the Manchester BS to increase rates despite the fact the BOE base rate has remained at 0.5% for yet another month.

Home-owners are being warned by Deal Direct to carefully re-read their original mortgage contract to find out if there is any clause which could allow a mortgage rate rise. If you find such a clause we recommend that you contact us straight away for mortgage advice and a competitive alternative mortgage offer.

At the moment lenders seem to be checking previous mortgage contracts looking for legal ways to increase interest rates on both cheap trackers and standard variable rates.

Manchester BS have managed to invoke a contract clauses enabling it to increase customer rates. Tracker rates are to be increased by the lender from between 1% and 1.5% to 3.99% and 4.74%c.

Manchester BS advise the clause in their tracker contracts states after an initial five year period, 12 months notice may be given of an intended mortgage rate rise not linked to the BOE bank rate.

A spokesperson commented on the decision advising that this fact was clearly stated in the mortgage terms. It was added that the lender's duty to all borrowing and savings members needs be balanced. For each mortgage borrower there are around seven saver members and managing interest rates that are applied needs to be finely balanced.

If you are a mortgage holder worried about a mortgage rate rise contact Deal Direct today for advice and an up to date product comparison.