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woolwich mortgages changing SVR massively

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savingholmes
savingholmes Posts: 27,628 Forumite
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edited 24 December 2009 at 1:04PM in Mortgages & endowments
"Edited - to say this affects the mortgage reserve users only - and won't affect my main mortgage. Since I don't have a reserve account all is okay for us. Thanks for support last night though!"

Hi we are currently on a fixed rate with the woolwich which expires in July. We have been paying over the odds since we took it out 18 months ago - just as rates dropped massively. I had really been looking forward to going on the SVR. We have however been sent a letter today saying that the SVR from Feb in future will be the bank of england base rate plus 4.49% :eek::eek::eek:which is bad - but liveable with if the rate stays at 0.5% but would be completely unaffordable if rates jumped by say 5%. They say we have 2 months to change mortgage if we don't like it but as far as I can see we can't anyway as we are on a fixed rate. I am also currently contracting and had one of my worst incomes in years so not sure will be able to change provider.

Help / advice needed!
Achieve FIRE/Mortgage Neutrality by mid 2030
1) MFW Nov 21 £201,999 with 236 payments to go - now £183,036 Equity 26.8%
2) Spend on handyman & external building works & new patio door £12.65K
3) CC £5.4K on 0% spends card but offset by £33.8K savings (part EF, part future home improvement)
4) Mortgage neutral by June 2030 AVC £10.2K/£127.5K AVC target 8% value at 15/5
5) FI Age 60 annual income target £13.7/30K 45.7%
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  • Eos
    Eos Posts: 21 Forumite
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    Hi. I got this letter today as well. If I understand it right, my interest rate is going to jump suddenly from less than 2% to 5%. I tried to call the information line (0800 022 4022) but everyone has gone home early for Christmas it seems. I don't see how they can makes such a big change unilaterally. I'll be shopping around to move my account if this is what is happening.
    But first I'm going to give them a ring tomorrow to see what's up....I suggest you do the same.

    I wonder if it was planned for people to get notice of this the day before Christmas Eve when everyone is too busy to do anything.

    Any other money savers affected who know more, any advice gratefully received.
  • savingholmes
    savingholmes Posts: 27,628 Forumite
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    I am with you I can't understand how they can do this - I have been on their website and asked them to call me - their cost that way!
    Achieve FIRE/Mortgage Neutrality by mid 2030
    1) MFW Nov 21 £201,999 with 236 payments to go - now £183,036 Equity 26.8%
    2) Spend on handyman & external building works & new patio door £12.65K
    3) CC £5.4K on 0% spends card but offset by £33.8K savings (part EF, part future home improvement)
    4) Mortgage neutral by June 2030 AVC £10.2K/£127.5K AVC target 8% value at 15/5
    5) FI Age 60 annual income target £13.7/30K 45.7%
  • savingholmes
    savingholmes Posts: 27,628 Forumite
    Name Dropper First Anniversary Photogenic First Post
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    What is confusing me is a lot of the letter talks about my mortgage current account reserve and as far as I know I haven't got one - but then it also talks about the Woolwich SVR going up..... They need to go on a plain English course as they would have struggle to make it more confusing!
    Achieve FIRE/Mortgage Neutrality by mid 2030
    1) MFW Nov 21 £201,999 with 236 payments to go - now £183,036 Equity 26.8%
    2) Spend on handyman & external building works & new patio door £12.65K
    3) CC £5.4K on 0% spends card but offset by £33.8K savings (part EF, part future home improvement)
    4) Mortgage neutral by June 2030 AVC £10.2K/£127.5K AVC target 8% value at 15/5
    5) FI Age 60 annual income target £13.7/30K 45.7%
  • opinions4u
    opinions4u Posts: 19,411 Forumite
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    savingholmes wrote: »
    They say we have 2 months to change mortgage if we don't like it but as far as I can see we can't anyway as we are on a fixed rate.
    If the way they have amended the SVR changes the terms and conditions of the mortgage then they have to give you a window during which you can also leave the mortgage without paying the ERC.
    I am also currently contracting and had one of my worst incomes in years so not sure will be able to change provider.
    Of course, you have to be able to find somewhere else to accept you!
  • divorcingjack
    divorcingjack Posts: 557 Forumite
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    I got this letter yesterday as well.

    It is enormously confusing, and not well worded. Does anyone know if this will affect tracker mortgages as well, or just those on SVR?

    When we took out the mortgage, they obliged us to take out a mortgage current account reserve, and I have a card for it but have never used it. As far as I can see, the borrowing facility provided by the current account reserve will now be at 4.99%.

    What confuses me is that the letter says the SVR is unchanged at 4.99%, and only the way they calculate it will change?

    I also tried to phone the contact centre, but they'd all gone home early because of the snow...

    Hmmmm
    Self-building fund :eek:: £4259
    Savings target: 1 rainy year 10000/10000 :j

    WINS 2011: Briggs & Reilly Suitcase, Nail Polish, Book, AEGON international tennis tickets x2, 4* trip to London including Michelin Star dinner :j
  • savingholmes
    savingholmes Posts: 27,628 Forumite
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    Like you we have never used the card on the mortgage current account reserve. The website itself says their current rate is 0.5%! Completely confused
    Achieve FIRE/Mortgage Neutrality by mid 2030
    1) MFW Nov 21 £201,999 with 236 payments to go - now £183,036 Equity 26.8%
    2) Spend on handyman & external building works & new patio door £12.65K
    3) CC £5.4K on 0% spends card but offset by £33.8K savings (part EF, part future home improvement)
    4) Mortgage neutral by June 2030 AVC £10.2K/£127.5K AVC target 8% value at 15/5
    5) FI Age 60 annual income target £13.7/30K 45.7%
  • divorcingjack
    divorcingjack Posts: 557 Forumite
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    Hiya Savingholmes,

    I had a quick look at the site as well, and think that the BBBR (barclays bank base rate) is 0.5% and the SVR is 4.99.

    They must be 2 different things.

    In my key facts, they use BBBR+1.19% to calculate my tracker rate, SVR is not mentioned at all.

    Have you had a look around for other SVR's?

    What a nightmare.
    Self-building fund :eek:: £4259
    Savings target: 1 rainy year 10000/10000 :j

    WINS 2011: Briggs & Reilly Suitcase, Nail Polish, Book, AEGON international tennis tickets x2, 4* trip to London including Michelin Star dinner :j
  • divorcingjack
    divorcingjack Posts: 557 Forumite
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    Just had another look at their rate sheets, and their current fixed products don't go on to SVR after the end of the fix. The majority go on to some kind of BBBR tracker.

    Do you definitely go on to SVR? What does your KFI say?

    dj
    Self-building fund :eek:: £4259
    Savings target: 1 rainy year 10000/10000 :j

    WINS 2011: Briggs & Reilly Suitcase, Nail Polish, Book, AEGON international tennis tickets x2, 4* trip to London including Michelin Star dinner :j
  • savingholmes
    savingholmes Posts: 27,628 Forumite
    Name Dropper First Anniversary Photogenic First Post
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    Really hoping that it is not as bad as it seems! Glad I am not the only completely confused by the letter!
    Achieve FIRE/Mortgage Neutrality by mid 2030
    1) MFW Nov 21 £201,999 with 236 payments to go - now £183,036 Equity 26.8%
    2) Spend on handyman & external building works & new patio door £12.65K
    3) CC £5.4K on 0% spends card but offset by £33.8K savings (part EF, part future home improvement)
    4) Mortgage neutral by June 2030 AVC £10.2K/£127.5K AVC target 8% value at 15/5
    5) FI Age 60 annual income target £13.7/30K 45.7%
  • Eos
    Eos Posts: 21 Forumite
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    Divorcingjack, I think you are on the right track. I am not paying the rate it says things are now. So it is saying you are going from old SVR to new SVR but no change in overall rate will not change at this time. As my present rate is not that, I hope mine is not changing either.
    I am not going to take it for granted though. I want confirmation so I know in time to move if I need to.
    ps. did you notice the covering letter said this is for information only. You don't need to do anything.
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