woolwich tracker mortgage ,is this correct.

dfarry

I have a Woolwich Offset tracker that started back in 2000... It tracks the BOE base rate +0.75%

With the announcement today about the latest BOE base rate drop I thought I'd check my Woolwich mortgage statement (I only have the October one). My tracker calculates daily interest and the statement shows a daily breakdown on the third page.

According to the BOE website the base rate dropped on 8/10/2008 by 0.5% with immediate effect. However my statement shows 5.75% rather than 5.25% (4.5% + 0.75%) throughout October.

I haven't had an opportunity to call Woolwich/Barclays mortgages yet but I will be very angry if the latest interest rate dropps have not bee reflected on my account. As far as I am aware there are no restrictions on the level of the tracker rate, it should simply rise/fall with the BOE base rate.

Trying_to_be_good

Woolwich change the rate on existing trackers on the first working day of the month following a BoE change. There was a change on 3 November (BBBR to 4.5%) and a further change on 1 December (BBBR to 3%). The next change I'm expecting is 2 January (BBBR to 2%).

dfarry

Thanks for that... too much to expect them to change the rate on the day... still at least the rate goes down (rather than being collared).

I'll check my next statement as soon as it comes in.

kittykat500

So can someone confirm that Woolwich Barclay Tracker (mine tracks at 0.39% above base) are not collared at 3%? I have the option to fix the tracker for the lifetime of the loan, so I'm getting a bit excited!!

alleycat`

What it says today:-

Barclays Bank Base Rate typically follows the Bank of England Base Rate but it is not guaranteed to do so. The Bank of England Base Rate can go up or down and is announced by the Bank of England's Monetary Policy Committee every month.

How it used to be described as of earlier in the week:-

Barclays Bank Base Rate
Interest on tracker rate mortgages is charged at a set margin above or below or equal to the Bank of England Base Rate. Interest rate changes on existing tracker rate mortgages take effect from the first of the month following a change to the Bank of England Base Rate. All references to the Barclays Bank Base Rate in your offer document (where the reference is to 'Barclays Bank PLC’s Base Rate') and Key Facts Illustration document (where the reference is to 'our Base Rate') should be taken to be references to the Bank of England Base Rate.


Potentially this reads that they have moved the goalposts and that it might get collared if the BoE go below 2%.
However it used to read as having no collar.

setmefree2

Thanks for that. It would be nice to get free money:D but it does sound to be too good to be true.....

Thanks for all the info

SMF2

samuel248

Barclays/Woolwich explicitly state that the BBBR will follow the BOE rate.I cannot find anything in my mortgage pack that says they can get out of doing that by moving the goalposts when it suits them.
I took out a Woolwich Lifetime tracker in June 2008 at 0.74% above the then BBBR/BoE of 5%. I took a gamble on doing this rather than taking the safe option and fixing at about 5.49%. I gambled on the base rate falling. Bar/Wool gambled on it not falling by offering me the mortgage. I am currently winning the gamble and hope to win more with further base rate cuts. I expect them to pay me my winnings in full or see you in court boys.
If Bar/Wool. did not cover their backsides against the then unforeseen cuts in the base rate by imposing collars in the t&C's of my mortgage, then that is their lookout. If the base rate rises drastically, will it be ok for me to impose a retrospective ceiling on my tracker rate or insist that the full rise in the base rate is not passed on to me? I think not.
If you're on a fixed rate then unlucky - you had the choice of a tracker or SVR and chose otherwise and cannot now ask for a cut.Barclays/Woolwich explicitly state that the BBBR will follow the BOE rate.I cannot find anything in my mortgage pack that says they can get out of doing that by moving the goalposts when it suits them.
I took out a Woolwich Lifetime tracker in June 2008 at 0.74% above the then BBBR/BoE of 5%. I took a gamble on doing this rather than taking the safe option and fixing at about 5.49%. I gambled on the base rate falling. Bar/Wool gambled on it not falling by offering me the mortgage. I am currently winning the gamble and hope to win more with further base rate cuts. I expect them to pay me my winnings in full or see you in court boys.
If Bar/Wool. did not cover their backsides against the then unforeseen cuts in the base rate by imposing collars in the t&C's of my mortgage, then that is their lookout. If the base rate rises drastically, will it be ok for me to impose a retrospective ceiling on my tracker rate or insist that the full rise in the base rate is not passed on to me? I think not.
If you're on a fixed rate then unlucky - you had the choice of a tracker or SVR and chose otherwise and cannot now ask for a cut.

samuel248

Sorry. My copy and paste from a related post went a bit hay wire but you should get the gist. As Woolwich Tracker cutomers, we need to stand up to them if they move the goalposts and not just accept it. Otherwise they can do whatever they like - what would be the point of having any sort of contract with them when they can amend it when it suits?

Robbie1456

Folks,
Lots of sensible comment here on the Woolwich Tracker.

In terms of there being a 'collar' or not on the tracker, the consensus within the so called financial experts in the media yesterday was that, unless the bank explicitly set out in the Key Facts Illustration document (which you should have been sent before signing up to your mortgage) the fact that a collar would be imposed if the base rate fell below a certain level, then it would probably be unlawful for them to try and cap the rate.

Of course the Woolwich is now losing out (or making far less profit) from those who signed up to trackers some time ago, and will be looking for opt out to stop the mortgages becoming poor revenue generators for them.

My advice is to stick with them. Furthermore, as the savings rates are falling rapidly, you will be better off overpaying your tracker if you can afford (even using any lump sum you might have squirrelled away in the bank) at a time when the mortgage interest rates are low. Overpay whilst the rates are low, and you will save thousands in interest by the end of your mortgage, and reduce the term by several years (try playing around with figures in the mortgage claculators to see how much you save / how much you shorten your term just by overpaying by £50 - £100 per month.

I speak not as a financial 'expert', rather as an expierienced Yorkshireman.

pod666

I rang them up and basically if you are on a tracker they leave you on the payment you started off the year with. The actual rate cut is being passed on so you are effectively over paying the interest on your mortgage and it will be all calculated on your renewal.

If you ring them and request the change they will alter it to the actual rate it is at from the beginning of next month however if you have the cash you may aswell leave as is and pay off more whilst the rates are low. In my case I asked them to put it up another £160 which eefectively moves my mortgage from 20 years repayment to 10 and a half years.

The interest cut is designed for you take the extra cash and blow it on holidays and cars etc to help the economy. Don't fall for the feeling of having to pay less cash and pay off the biggest debt you ever likely to have as quickly as possible :beer: