Welcome to Amber Homeloans

Questions and Answers

PLEASE NOTE:

1. What is a Standard Variable Rate (SVR)?

An SVR is an interest rate that is set by a lender and is not linked directly to an independent external rate such as the Bank of England's Base Rate (Base Rate).

If you have any questions about the rate you are paying or about our SVR, please contact us.

2. What is the SVR ceiling?

This is a term that was introduced for some customers so that Ambers's SVR would not be more than 3% above Base Rate. If the term imposing the SVR ceiling applied to you, this was set out in your mortgage documentation.

Historically, Amber has maintained its SVR at a competitive level of 1% to 2% above Base Rate, so the SVR has remained comfortably below its ceiling. However, when the Bank of England reduced Base Rate to the current historic low of 0.5%, the ceiling prevented us from keeping our SVR in line with the market. As a result, our SVR has now remained far below market norms for building societies for almost a year.

The term that imposed the ceiling also gave us the right to remove it in exceptional circumstances. As explained in more detail below, the present circumstances are truly exceptional and we have therefore decided to exercise our right to remove the ceiling. This will enable us to realign our rate with the market.

3. How does Amber's current SVR compare with those charged by other lenders?

Amber's current SVR is significantly lower than the SVRs of many other building societies and banks.

Amber's new SVR (from 1 March 2010) will still be below the average SVR of the top 10 UK building societies, which is currently 5.12%†.

4. What will Amber's SVR be after the removal of the ceiling?

With effect from 1 March 2010, Amber’s SVR will increase to 4.95%.

5. When will the change take place?

The SVR ceiling will be removed with effect from 1 March 2010, at which time the SVR will increase to 4.95%. Any monthly payments affected will change from the March payment onwards.

6. Is Amber allowed to remove the ceiling?

Yes. If your mortgage documentation states that the SVR ceiling applies then it also clearly states that, in exceptional circumstances, Amber can remove the ceiling by giving you not less than 30 days' notice of our intention to do so.

7. What are 'exceptional circumstances'?

The circumstances currently prevailing are exceptional under each of two separate tests, which have recently been defined by Amber’s Board as follows:

1. Base Rate is less than or equal to 2.7%; or

2. Base Rate minus the UK average Branch Instant Access savings rate (as published monthly by the Bank of England) is less than or equal to 2.5% for each of the three preceding months.

The circumstances will remain exceptional for as long as either one of these tests continues to be satisfied.

8. How long does Amber expect exceptional circumstances to prevail and what will happen when the circumstances cease to be exceptional?

It is impossible to predict when the markets and economy will return to normality. However, based on the current market view on rates, we anticipate that the present exceptional circumstances, as defined by the two tests in Question 7, will persist throughout 2010 and 2011. They may even prevail for longer.

Our borrowers can rest assured that we will monitor developments very closely. Whilst we are not under any contractual obligation to do so, we will voluntarily reintroduce the ceiling when exceptional circumstances have ceased to apply.

Click here to check whether exceptional circumstances apply

9. Why is Amber removing the SVR ceiling now?

We have done our best to protect our customers from the recession and the impact of historically low interest rates, for as long as possible.

However, with the current exceptional circumstances now forecast to continue for some while longer, the Board has decided to realign our SVR with the market.

10. What does the removal of the SVR ceiling mean to me?

We have written to all of our customers affected by this to advise them when they will be affected by this change. This letter will explain any changes to monthly payments and what options are available to you.

You are affected by the increase in our SVR either if your mortgage, or an element of it, is linked to SVR or if it will revert to SVR in the future (eg if you have a fixed rate product with a set term).

If your mortgage is currently on SVR, the rate payable and your monthly payment will increase with effect from 1 March 2010.

If your mortgage will revert to SVR in the future and the circumstances remain exceptional at the time when it does so, then the ceiling will not apply to the SVR you pay at that time.

In either case, we will reintroduce the ceiling when the circumstances cease to be exceptional (see Question 8).

If you are unsure what type of product you have, you can refer to your mortgage offer or contact us.

11. What if I believe the higher mortgage payments will cause me to go into arrears?

We always advise borrowers taking out a mortgage to ensure they are able to cope with the impact of any increase in interest rates.

However, we recognise that individual circumstances may have changed and therefore we have a range of options in place to help where the impact of this increase in payments may cause financial difficulty.

This is in-keeping with our strong track record of working with our customers to identify personalised solutions to meet their individual needs. For example, we might consider restructuring all or part of your mortgage to make your payments more manageable if this is appropriate. If you would like to discuss your options please contact us.

12. What if I have an arrangement to overpay on the required payment each month?

If you have made an arrangement to make a fixed monthly payment that exceeds the required payment, you will continue to pay the same fixed monthly payment after the SVR is increased – except where the amount you are paying falls short of the new minimum monthly payment. So, for example, if you have set up a fixed monthly payment of £500, £200 of which is currently an overpayment, the overpayment will reduce. Therefore, you may wish to consider increasing your monthly payment to maintain overpayments at the same level.

If you have made an arrangement to overpay a fixed additional amount over and above the minimum monthly payment, this additional amount will remain the same and your total monthly payment will increase in line with the SVR change. If you do not want this to happen please contact us.

13. What if I have an arrangement for a monthly underpayment?

If you have an arrangement that has been agreed by us, this will remain in place and your monthly payment will remain the same, however the size of the monthly shortfall will increase and this will result in additional interest charges. If you wish to discuss details of your payment arrangements, please contact us.

14. What if I have made overpayments and now wish to use these as a buffer?

Your Amber mortgage allows you to take payment holidays once you have had your mortgage with us for six months, if you have overpaid. You will need to give us at least 14 days’ prior written notice. As long as you have no arrears, the holiday proposal would not take the loan to value above 95% and there are sufficient surplus payments to cover the holiday you may take up to three consecutive months’ holiday. You cannot take more than a total of six months in any 12 month period - of course whilst you do not need to make payments during the holiday, interest will continue to be added to your account and your balance will increase.

15. Is Amber doing this because it is in financial difficulty?

Not at all. The Skipton Building Society Group is profitable and well capitalised.

16. Will it take me longer to pay off my mortgage?

No. The monthly payments may increase but your mortgage term will remain unchanged. If you wish to change the length of your mortgage term, please contact us to discuss this.

17. Have these proposals been seen by the Financial Services Authority (FSA)?

Yes. As a responsible business, we are in regular dialogue with our regulator the FSA, which is aware of these changes.

18. Will you tell Amber customers when exceptional circumstances no longer prevail?

Yes. You can rest assured that we will monitor developments very closely and will voluntarily reintroduce the SVR ceiling when the current exceptional circumstances no longer prevail. We will write to inform affected customers when this occurs.

In the meantime, you can check the performance of the exceptional circumstances here

19. Will the SVR ceiling ever be reinstated?

As stated in Questions 8 and 18, though we are not under any contractual obligation to do so, we will voluntarily reintroduce the SVR ceiling when the current exceptional circumstances cease.

20. Could the SVR ceiling be removed again?

Yes, if exceptional circumstances ever arose again. These may be different exceptional circumstances to those currently prevailing.

21. What do I do if I wish to complain?

We have made every effort to explain clearly what is happening and why, and the options we are providing to you (some of which we were not obliged to provide). Whilst we acknowledge that any increase in your mortgage payment will be unwelcome, we believe that our actions should not have left you with grounds for complaint.

If, however, you wish to discuss these changes, please contact us.

In the event that you remain dissatisfied, Amber has an internal complaints procedure. You can register a complaint over the telephone, via our website or by writing to Customer Response, 1 Providence Place, Skipton, North Yorkshire BD23 2HL.

Your complaint, once registered, will be acknowledged within five working days. We aim to investigate and respond to your concerns within four weeks and, if appropriate, a final decision will be reached within eight weeks.

You also have the right to refer your complaint to the Financial Ombudsman Service (FOS) if you are dissatisfied with Amber’s response. FOS will only consider your complaint if you have already given us the opportunity to resolve it.

If you have any other questions, you can:-

Call us on on 0845 602 0750
To help maintain service and quality, some telephone calls may be recorded and monitored.

†Source: Moneyfacts (11/01/10)