The case concerned ‘tracker’ loans, of which there are well over a million in the UK. Offered by a range of lending institutions, often starting with a discounted or fixed initial rate and then switching to a tracked rate, they are calculated by adding a fixed premium to an external ‘reference rate’ such as the Bank of England base rate or a LIBOR rate. This means, or should mean, that borrowers can predict with certainty when their interest rate will vary, and by precisely how much. In the Alexander (A) case, however, this widely accepted consensus was challenged by the action taken by the West Bromwich Mortgage Company (WB), a wholly owned subsidiary of the West Bromwich Building Society.
Read the full article in Counsel Magazine…
