What is Barclays Bank Base Rate?
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I called Barclays about this and they said that -yes- you're supposed to call them every time you want your monthly payments recalculated. Otherwise as others have mentioned payments are only recalculated once a year. I had no idea it would be like this as my previous Halifax tracker mortage would always recalculate new premiums every time the BoE changed.
What is more worrying is that the lady said I should definitely ask for new calculations, because I am being charged at the higher rate (5.75%) for the past two months. I'm a bit unclear on this since she also mentioned the extra money resulting from the decrease in interest rate should go towards the repayment part of the mortgage, but overall she made it fairly clear that I'd been losing money these past two months. After complaining about it she arranged for the complaint team to give me a call so that I could try to get my money back (called me, left a message then I called them back only to wait 1 hour on the phone with noone answering ... but that's another story).
Does anyone have a clearer view as to why we'd be losing money with this scheme? My understanding was that if the interest rate goes down then the extra goes towards the repayment part so it would just effectively reduce the term of the mortage?"Cleaning your house while your kids are still growing is like shoveling the walk before it stops snowing."0 -
I'am sure they never explained when signing for the mortgage that it would track yearly. Bit of a con really. Thinking of moving as even making overpayments has been a nightmare. Decision is who to go with next without incurring large costs.
But it's not tracking yearly ( if there is such a thing ). You're only concern is that your payment hasn't been reduced in line with the interest rate cut. This isn't the same as interest rate changes being applied once a year, this has to do with the monthly payment which, as has been pointed out, you can revise following each interest rate change. You're not being conned out of money here.0 -
Why are they doing the Tracker thing different from almost every other lender? If the rates go down they should drop your payments. Simple as that. Why should you have to ring their expensive helpline and ask for a change .It should be done as soon as the rates rise or fall.0
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My understanding is that the amount of interest you are paying will change as soon as BBBR changes, but they only review the payments you make automatically once a year (in May I think). If you do nothing, and BBBR has come down, then in May they will automatically lower your payments.
Alternatively you can ask them to alter your payments before May.
I suppose this is to simplify things, so that if there are 3 consecutive rate changes, you don't pay different payments for 3 months.
In the mean time if you don't change your payments at least you're overpaying your mortgage!
Fair enough. Overpayments are fine and in effect reduce the APR, but that assumes the borrower can afford the extra each month. Barclays surely should be publicizing this rather more clearly; any reasonable person would expect a tracker to track monthly.
What worries me more here is if the BBBR increases. In that situation, borrowers would be underpaying, in effect deferring even heftier increases until a later date.0 -
Barclays surely should be publicizing this rather more clearly; any reasonable person would expect a tracker to track monthly.
It absolutely IS tracking monthly. It's not your payment that tracks, it's the interest you pay that tracks. So, like you say, the difference is additional capital you repay. So, the RATE tracks monthly. Of course, if you want your payment adjusted accordingly, you can do that.0 -
This is hilarious. I understand that the lender would answer you that the so called barclays or natwest bank of england base rate is equal to the bank of england. But????????????????????????
Any lender have the right to increase this whenever they find fit! This not a true tracker mortgage and I will not be surprised when the FSA will tell them to make a true statement!
It is either the bank of england but never the banks bank of england. The repo rate is the repo rate.
It is like saying the barclays pound sterling but it isn't a pound!
Would you buy the barclays american dollar or the exchange of the american dollar?
Would you buy the McHonda or the Honda?Motto: 'If you don't ask, you don't get!!'
Remember to say thank you to people who help you out!
Also, thank you to people who help me out.0 -
This isn't "different from almost every other lender". Quite a few lenders do or did do this.Why are they doing the Tracker thing different from almost every other lender? If the rates go down they should drop your payments. Simple as that. Why should you have to ring their expensive helpline and ask for a change .It should be done as soon as the rates rise or fall.
The reason for it is that some borrowers would prefer their payments to stay the same each month, irrespective of random fluctuations in interest rates.
The fact that the interest rate charged on the loan is varied when it should means that there is no rip-off; if the borrower under-pays due to the payments only changing once a year, they will pay slightly more interest the following year; if they over-pay for the same reason, they will pay slightly less interest in future years.0 -
I think ......i found the answer to the BBBRate and BOEBRate issue. Please check the link.
http://www.personal.barclays.co.uk/BRC1/jsp/brccontrol?site=pfs&task=popup1group&value=153960 -
A quick question.
Had our offer from Woolwich (Barclays) last week. The rate on the offer is 6.29% (BBBR plus 1.29%).
Following the notes on the offer letter, I assume the mortgage rate will drop to 5.79% with effect from 1st November.
My question is will our repayments which will be set automatically for the next twelve months be based upon 6.29% or 5.79%.
I suppose the answer is it depends when we complete, ie before or after 1st November when the mortgage rate should change but does anybody know for sure?0 -
It will be 5.79 as it will go on the time of completion.
Interestingly, Woolwich have been the first big player to announce that they will reduce thier SVR by the full 0.5% in line with the base rate cut. Thumbs up to them for that.0
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