Halifax and Nationwide remove tracker collars

Two of the UK’s largest mortgage lenders have announced that they will not enforce the collars on their tracker mortgages.

Collars are clauses in a mortgage contract that allow lenders not to pass  on interest rate reductions once the Bank of England Base Rate falls below a certain level.

Halifax says that over half a million of its customers will benefit from its decision not to enforce a collar, which it’s terms and conditions said it had the right to introduce if interest rates fell below 3%.

Nationwide also announced that it would drop its 2.75% collar or ‘floor’.  However there is now a floor of 1% on its new tracker rates.

A number of other Building Societies such as Yorkshire and Skipton still impose collars or minimum rates.  Borrowers should check the terms of their current deal to see if one applies.

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