Cat Standard Mortgages

What is a CAT Standard Mortgage

CAT Standard Mortgages follow a set of rules laid down by the British government relating to Charges, Access and Terms. The aim of the CAT Standard Mortgage, introduced in the year 2000, is to encourage financial institutions to provide simple to understand financial products that are fair to consumers and meet minimum standards as laid down by the government.

CAT Standard Mortgages are available in two different forms:
variable interest rate mortgage;
fixed or capped interest rate (usually limited to a fixed period at the start of the mortgage term) mortgage.

CAT Standard Rules
CAT Standard Mortgage basic rules are as follows:
Interest calculated daily;
no additional charge for mortgage indemnity guarantee (MIG);
no fees payable to brokers;
documentation must be clear and uncomplicated;
lender must apply usual criteria for calculating amount that can be borrowed;
offer choice of which day of the month regular payments are to be made;
additional repayments can be made at any time;
CAT Standard Mortgage can be transferred when you move home, if the lender agrees;
no obligation to take any additional financial product from the lender;
lender must give six months notice if CAT Standard Mortgage is to be withdrawn;
if in arrears, interest only should be paid at the normal rate on the outstanding debt.

Additional Rules for CAT Standard Variable Rate:
The following additional rules apply to CAT SVR mortgages:
no arrangement fee payable;
no redemption charges payable;
interest rate must be no higher than 2 percent above Bank of England base rate;
interest rate must be reduced within one month when base rate falls.

Additional Rules for CAT Standard Fixed or Capped Rate:
For fixed or capped rate mortgages, the additional rules are as follows:
maximum arrangement fee is currently £150;
maximum redemption charge is 1 percent of amount owing for each remaining year of fixed period, reducing monthly;
no redemption charge payable after the fixed or capped rate period has finished;
no redemption charge payable if you stay with the same lender when you move home.