You Are Here: LearnMoney.co.uk > Mortgage Section > CAT Standard Mortgages
...Home Page...|...Financial Yellow Pages...|...About LearnMoney.co.uk...|...Contact Us...|
Navigation
Mortgage Section
CAT Standard Mortgages

Mortgage Section

CAT Standard Mortgages

CAT stands for Charges - Access - Terms and has been introduced by the government to help buyers identify mortgages that meet minimum standards.

  • Cat standards are voluntary and mortgage lenders do not have to abide by them
  • But if a mortgage does follow CAT guidelines then it will clearly state this in its promotional material

Having a CAT mortgage is certainly an advantage for most borrowers as it means there can be no ambiguity via the small print as well as knowing that the terms of the mortgage cannot change. But non-CAT mortgages should still be considered by people who have a good knowledge of financial products or markets. A mortgage which is not sponsored by CAT does NOT imply that it is sub-standard, rather perhaps a little bit more sophisticated.


WHAT CAT STANDARDS OFFER
on
VARIABLE, FIXED & CAPPED RATE MORTGAGES
Charges


  • Interest must be calculated daily
  • Full credit for all payments when made
  • No separate charge for mortgage indemnity (MIG)
  • All other fees disclosed in cash upfront
  • Borrowers pay no fees to brokers

Variable rate loans
  • No arrangement fee
  • Interest rate no more than 2% above official base rate
  • When the base rate falls, the interest must adjust within a calendar month
  • No early repayment charges at any time

Fixed & capped rate loans
  • Maximum booking fee is £150
  • Maximum early repayment charge is 1% of the amount you owe for each remaining year of the fixed period, reducing monthly
  • No early repayment charge after the end of the fixed or capped period
  • No early repayment charge if you stay with the same mortgage lender when you move home
Access


  • If there is a minimum amount you must borrow to get a CAT standard mortgage, it has to be £10,000 or less
  • Any customer may apply
  • The lender's normal lending criteria apply
  • Provided your lender is happy to lend on the new property, you can continue with your CAT standard mortgage when you move home
  • If you make regular payments, you can choose which day of the month to pay
  • You can make regular early payments at any time
Terms
  • All advertising and paperwork must be straightforward, fair and clear
  • You do not have to buy any other product to get a CAT standard mortgage
  • Your lender must give at least 6 months notice if they can no longer offer your mortgage on CAT standard terms
  • If you are in arrears you should pay interest only on the outstanding debt at the normal rate

© 2008 LearnMoney.co.uk Ltd. All rights reserved

The information on the LearnMoney.co.uk website has been compiled from sources believed to be reliable, but is not warranted to be accurate or complete.
All recommendations and comments are provided for general interest only and should not be construed as personal investment advice.
Professional advice should always be sought.
The price of securities and any income from them can go down as well as up.
Past performance of a security or market is not necessarily indicative of future trends.
Any opinions and recommendations on LearnMoney.co.uk are given in good faith, but without legal responsibility and are subject to change without notice.