Tracker mortgages-What rate will they track ??

wannabemoneysaver

Hi.

I've got a lifetime tracker with the Woolwich which is stated to be 0.29% above Bank of England base rate.

I got to thinking that if the inter bank (LIBOR) rate remaons at 6%+ or something closes to this, the bank will be losing money on my mortgage, particularly if BOE rate falls to 3.25% by end of 2009 as is widely predicted.
If this was the case, they would be lending to me at 3.54%

I dug out the mortgage offer, and surprisingly, the wording is not "0.29% above Bank of England" , but is "0.29% above Barclays Bank PLCs base rate"

My question is could my bank (or any other bank for that matter) choose to change their own base rate independently of BOE changes and so make "the tracker" an irrelevant concept.

Comments Please...

atlantis187

Dont mean to be rude but there are soo many threads on here regarding this question have a look thru the posts.

The short answer of it is Barclays Base Rate does not neccassary have to drop in line with BoE rate.

KiKi

I understand that a BoE tracker is exactly that - mine is +0.49 and has always gone up and down with the BoE base rate.

If yours says "Barclays Bank PLC's base rate" that suggests to me you don't have a BoE tracker at all...but I'm no expert in mortgages so I'm more than prepared to be educated!

KiKi

foreversummer

If you check out the Woolwich site you will find:

Barclays Bank Base Rate
Barclays Bank Base Rate follows the Bank of England Base Rate, which can go up or down and is announced by the Bank of England's Monetary Policy Committee every month.

Foreversummer