Kensington Mortgages Interest Rates

[metabelis]

This is in the Scotland forum because I live here, but if it would be more appropriate elsewhere, please move it.

 

I recently wrote to Kensington regarding the interest rate that they are charging on our mortgage, which I believe to be excessive. They wrote back (and I quote):

 

The interest rate that is applied to your mortgage is the Variable Rate (VR), plus an agreed interest margin of 2%. The VR is reviewed on a quarterly basis in accordance with the performance of the London Interbank Offered Rate (LIBOR), which is the rate that banks use to lend money to each other, and it is reset on a quaterly basis on 1 March, 1 June, 1 September and 1 December. On the last business day of each quarter we look at LIBOR and round this up to the nearest 0.05%. This gives us the LIBOR rate and the VR is set at no more than 2% above the LIBOR rate. The current VR is 3.50% plus the 2% margin equals 5.50%, which is the current interest you are being charged.

 

I've just checked the current LIBOR rate - assuming that they are referring to the 3 month rate - and it is 0.50813%. This is more or less the same figure as at the start of December. Surely this means that the current VR should 2.55% (rounding up to the nearest 0.05%), not 3.50% as they have stated? They seem to have pulled an extra 1% out of nowhere. Or am I misunderstanding where they get their figures from?

 

Can anybody enlighten me?

[maroondevo52]

Hello and Welcome metabelis,

 

I've moved this thread to the Mortgage Forum, hopefully you'll get some advice shortly.

 

Regards,

 

Scott.

[metabelis]

No replies - so set me ask this question another way: If I write to Kensington and ask where the extra 1% has come from, are they under any legal obligation to respond, or can they just ignore my letters (which seems to be their standard response if at all possible)?

 

By the way, thanks Scott for moving the thread.

[nomorecrooks]

No replies - so set me ask this question another way: If I write to Kensington and ask where the extra 1% has come from, are they under any legal obligation to respond, or can they just ignore my letters (which seems to be their standard response if at all possible)?

 

By the way, thanks Scott for moving the thread.

 

@ Metabelis: you are correct in your calculation: Kensington has done then same to me. This is an ongoing battle which I suggest you read about on this site!

[OLIVE.FAMILY]

Kensington add more to their mortgage rate as they are sub prime. They also look at how your account is running. If you have run into problems then they up it some more

 

xx

[metabelis]

Kensington add more to their mortgage rate as they are sub prime.

That's fair enough - I can understand that. BUT:

They also look at how your account is running. If you have run into problems then they up it some more

This isn't mentioned in the calculation they sent me. Surely, legally, they can't just pull a number out of thin air and say "We're charging you this much now"?

 

@ Metabelis: you are correct in your calculation: Kensington has done then same to me. This is an ongoing battle which I suggest you read about on this site!

Thanks. I've read around a bit, so I'm going to ask them for an explanation - it's unlikely I'll get anywhere, but I have to try at least.