CAT Standard Mortgages
CAT ( Charges, Access and Terms)
There are standards set by the UK Government for mortgages and loans to ensure a level of standards amongst financial products. CAT standards are voluntary, so mortgage providers don’t apply them to all mortgages, although offering Non-Cat Standards mortgages does not imply dishonesty or anything similar.
Generally, having a CAT mortgage should mean:
CAT Mortgage Standards vary from mortgage to mortgage relating to variable, fixed, discount, cash back and capped rate mortgages.
Variable rate Mortgages
- No arrangement fee.
- If the BOE’s base rate falls, mortgage payments agree adjusted within one calendar month and the max interest rate should be no more than 2% above the BOE’s base rate
- No penalty should apply if you want to pay off part or all of the mortgage.
Fixed and capped rate loans
- booking and arrangement fees are to capped at £150,00
- Redemption penalties within the fixed/capped rate period should be no more than 1% of the amount you owe for each year of the fixed period, calculated monthly.
- There must be no redemption charge once the fixed-rate or capped period has come to an end.
- There must be no redemption charge if you stay with the same mortgage lender when you move home.
Points about the CAT standard Mortgage:
- It is not a mortgage guaranteed, recommended or endorsed by the government
- A CAT standard Mortgage is not automatically the best for you or even the best deal in the mortgage market.
- This does not mean the mortgage is the best deal available.
- Mortgages that are not CAT-standard are a “rip off” or more expensive, just that they may add extra hidden charges to offset the savings they offer you the borrower.