Major mortgage lender says it won't reduce repayments unless customers 'ask'

A major mortgage lender has admitted it won’t reduce repayments after the Bank of England base rate cut unless customers ASK. Yorkshire Building Society has been reported as operating a policy which experts say is "outdated".

Customers must instead contact their lender and ask for their payments to be "recalculated" to immediately see a reduction. Nicholas Mendes, mortgage technical manager at broker John Charcol, said: "This delay can cost borrowers hundreds of pounds over several months.

"Accord’s approach appears to reflect the outdated annual review process, which was common in the 20th century. While the actual interest charged reflects rate changes immediately, payment adjustments are delayed until an annual review.

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"The modern norm for tracker mortgages is to align monthly payment changes with base rate adjustments, ensuring borrowers experience the financial effects promptly." A spokesperson for YBS said: "Our mortgage payments are adjusted through an annual review process and we outline this to customers when they take out their mortgages with us.

"On December 31 each year, customers’ payments are recalculated to reflect any interest rate changes which have occurred in the preceding 12 months. This approach provides stability and certainty of monthly payments for customers and is an approach adopted by several other lenders in the market."

"We write to customers after each base rate (or standard variable rate) change and give them the option to request an immediate recalculation of their payments if they prefer. If they stick with the annual review, changes are applied to their monthly payments from the following March."