Implications of the Halifax ruling for mortgage holders

Q Do you know whether the Halifax ruling on differential standard mortgage rates can be used by members of other building societies?

DK

Q I have had a repayment mortgage with the Nationwide for about 10 years and want to know what I need to do to get compensation in the light of the Halifax ruling.

GC

A These are just two of the many letters we have had since the Halifax ruling at the beginning of this month and it seems certain there is some confusion on the matter. So let's set the record straight.

The ruling was made about four individual cases and affects only those lenders which introduced dual pricing policies last year - namely, Halifax, Nationwide, Abbey National and HSBC.
In 2001, these four lenders introduced new lower standard variable rates (SVRs) which were not available to some of their existing borrowers. Some of those existing borrowers felt that this was unfair so they wrote and complained. The Financial Ombudsman Service's ruling relates to those complaints.

So if your mortgage is with any other lender, or was unaffected by the introduction of the new, lower SVRs - if your rate is fixed, for example - the ruling will have absolutely no effect on your mortgage.

Halifax has been ordered to pay compensation to Mr Wright, the borrower who brought the case against it. But there is no reason to believe that the lender will compensate all similarly affected borrowers automatically. So if your mortgage is with Halifax and was affected by the dual pricing policy, you should write to your lender and complain.

The same applies if your mortgage is with one of the other three lenders and you were affected by the new SVRs, although Nationwide borrowers may want to wait until the end of this month, by which time the building society plans to make a statement on what it plans to do about the ruling.