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The editor of this section of the site is Nigel Clayton of Kings Chambers, Leeds and Manchester. Nigel also maintains the specialist website dealing with mortgages at www.legalmortgage.co.uk

There are four cases this month:
  • Through construction of mortgage documents, a lender had a right to vary interest payable and to terminate the mortgage.
  • A borrower’s claim for damages following the appointment of receivers and alleged sales at an undervalue was struck out.
  • When an ex-wife filed evidence support her claim to beneficial ownership, she was entitled to relief from sanction for default.
  • Beneficial interest - Mortgages: See co-ownership section.

Construction of mortgage documents

Right to vary interest rates and to terminate

Alexander v West Bromwich Mortgage Company Ltd
[2015] EWHC 135 (Comm)


As a matter of contractual construction of an offer letter and mortgage conditions, the lender had a contractual right to vary the interest rate payable by the borrower and to terminate the mortgage on notice.


In June 2008 WBMC made an interest-only offer of a loan to A. In box 3 the loan was stated to be of £90,299 for 25 years. Box 4 contained a product description: “buy to let 6.29% fixed until 30.06.2010” and thereafter to revert to variable rate until the term end (base rate + 1.99%).

The offer of loan incorporated certain mortgage conditions, which accompanied the offer letter. Clause 5 of these provided for the rate of interest to be varied by WBMC at any time for certain specified reasons including “to reflect market conditions generally”.

Clause 14 of the mortgage conditions provided that the borrower may be obliged to repay the loan in full if any of certain specified events occurred including “we give you one month’s notice requiring such repayment”.

The Mortgage conditions contained a statement that, “If there are any inconsistencies between the terms in the Mortgage Conditions and those contained in the Offer of Loan then the terms contained in the Offer of Loan will prevail. ... THIS IS AN EXTRACT OF THE FULL TEXT. TO GET THE FULL TEXT, SEE BELOW

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