Lenders ask for advice on collars

Nationwide and Halifax have sought legal advice to confirm that the collars on their trackers are enforceable.

The revelation came at the Sesame Symposium held last week in London. Nationwide and Halifax are reviewing their collar clauses ahead of the base rate decision this week.

Halifax has already hit its collar rate at 3% and if there is another cut Nationwide will implement its 2.75% collar.

Matthew Wyles, non-retail director at Nationwide, says: “The reason we have built in the collar is because we are primarily a retail-funded institution. It is a particular challenge with the model we have. Products with collars are still usually cheaper than remortgaging.”