A CAT standard mortgage is a property loan that fulfils several standards and requirements outlined by the government, in relation to the charges, access and terms of the loan (CAT). Although only a few mortgage products comply, the official statement of the UK Treasury defines CAT standards as a measure to ‘prevent confusing marketing and hidden charges’ for the benefit of borrowers.
CAT standards remain entirely optional for UK lenders although they are adopted by most and are applied exclusively on a voluntary basis. The idea is that if you take out a CAT standard mortgage, you benefit from having the peace of mind in knowing that you have a loan that complies with the government’s own basic standards and requirements. CAT mortgages are typically free of complex and misleading small print, ensuring borrowers know exactly what they are getting.
This does not necessarily mean that all non-CAT standard mortgages are bad. Nor does it mean that you are guaranteed the best possible deal with a CAT standard mortgage. You may find non-CAT-standard deals available that are significantly more cost-effective than their CAT standard counterparts.
If you’re interested in applying for a CAT standard mortgage, it is important to understand the following before submitting your application:
As with all mortgages and property loans, it is essential to consider all terms, conditions and borrowing costs before proceeding. CAT standard mortgages may eliminate nasty surprises but to reiterate, they do not guarantee the best possible deal.
For a mortgage to qualify under the CAT standard guidelines, it must fulfil the following requirements among others:
Variable rate CAT mortgages
Fixed and capped rate CAT mortgages
If you are interested in a fixed or capped CAT standard mortgage and would like to discuss the potential benefits in more detail, we are standing by to take your call. Please contact a member of the team at UK Property Finance anytime for an obligation-free consultation.