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Mortgages.

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 two cases this month:
  • A lender’s standard printed mortgage conditions were inconsistent with specially agreed terms.
  • The court has a general equitable discretion to stay execution of a possession order in rare and compelling circumstances (decision in Northern Ireland).


Tracker mortgage

Contractual inconsistencies

Alexander v West Bromwich Mortgage Co Ltd
[2016] EWCA Civ 496

Summary

A lender’s standard printed mortgage conditions which enabled the lender to vary the rate of interest charged under a tracker mortgage, or even call in the borrowing at will, were inconsistent with the specially agreed terms of the mortgage offer.

Facts

A mortgage offer stated that the term of the mortgage would be 25 years, that the interest rate would be fixed at specified rate for a period of time and that thereafter it would be at a variable rate of 1.99% over the Bank of England Base Rate.

The mortgage conditions stated that the rate of interest specified in the mortgage offer (other than the fixed rate) may be varied by the lender, and that the loan may be repayable in full on the giving of one month’s notice by the lender.

The standard conditions contained an inconsistency clause that provided that in the event of an inconsistency the terms of the mortgage offer would prevail. The borrower contended that the mortgage conditions were inconsistent with the mortgage offer and were accordingly not incorporated into the contract.

At first instance the High Court held that the conditions were not inconsistent with the offer and were incorporated in the contract, so they could be relied upon by the lender. The borrower appealed to the Court of Appeal.

Decision

The Court of Appeal allowed the appeal. It was common ground that this was a tracker mortgage and it would be reasonably understood that a tracker mortgage generally ... THIS IS AN EXTRACT OF THE FULL TEXT. TO GET THE FULL TEXT, SEE BELOW

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