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After the party

30 October 2008 / Paul Beevers
Issue: 7343 / Categories: Opinion
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How does the law help borrowers locked into uncompetitive deals? Paul Beevers reports

When a fixed rate mortgage ends, the interest rate usually defaults to the lender’s standard variable rate, which may or may not be higher than the average market rate. For some borrowers their lender’s standard rate may come as nasty shock, especially if they enjoyed a low introductory rate. Standard variable mortgage rates have not been particularly competitive in the past, and borrowers have relied on their ability to find a new deal with another lender to avoid paying over the odds for their loan once their fixed rate ended. Some borrowers will now find that they cannot refinance and lenders may take advantage of this to increase their margins on “captive” loans. Is there anything a borrower can do?

It may come as a surprise to learn that the courts have already been asked to decide the arguments that arise when borrowers say that they are being treated unfairly, and that the facts giving rise to the Paragon cases discussed below are

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