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Could some mortgage customers soon be receiving interest from their banks?

As the UK base rate continues to move headlong toward 0% this has opened up a rather interesting and intriguing debate regarding tracker mortgages which were sold back in 2007 as loss leaders advertising rates under the Bank of England base rate. While some of these rates were set at just 0.01% under the base rate there were others such as one by Abbey National which offered a rate which was 1% under the UK base rate. So if rates fall to even lower levels could we see some mortgage customers receiving interest from their banks?

In theory this is a very real reality for some of the U.K.'s mortgage lenders and again perfectly illustrates the massive appetite for risk which was prevalent over the last decade. However, there are concerns that some of these contracts may contain small print which would in some way protect the banks if base rates fell to such a level that in theory would see them pay interest to mortgage customers.

While there has been no official response from the financial sector as a whole regarding the above issue it will be interesting to see how they try to restrict their liabilities in the future.

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