woolwich lifetime tracker mortgage

m17936

Whilst I am very happy to have a Woolwich Lifetime Tracker at 0.18% above Barclays Bank base rate last autumn, I am surprised at some of the features of this product that were not stated in my Mortgage Offer. The problem areas are

(1) although the interest rate charged changes on the first of the month after a Barclays Bank base rate change, your mortgage repayment does not actually change until the mortgage year end which is September 30th. This means that when bank rate falls you are repaying more capital for the rest of the mortgage year, rather than having your mortgage payment reduced automatically.

(2) I found out by chance that you can call and ask for your mortgage repayment to be "manually recalculated" after a change in the bank rate but this has to be done each time there is a change in bank rate. Given the sophistication of computer software today, this arcane process is a completely unneccessary imposition on customers.

(3) Although I was informed that the mortgage year end was September 30th 2008, my expected reduction in mortgage repayment as a result of the February and April 2008 bank rate changes will not begin for some reason until my November 2008 repayment.

(4) The Woolwich website describing their Tracker Mortgages states "So when Barclays Bank Base rate falls, your monthly repayments fall. If the rate rises, so will your montly mortgage repayments". This does not fit my experience.

I would be very interested in hearing the views of others on this mortgage product.
i am also thinking to switch to the HSBC tracker rate, what do you think? should i stay with barclays or mve to hsbc? I would like also to extend my borrowing by 10000 pounds and extend the term from 15 to 30 years.

foreversummer

First of all you have an excellent rate!

The monthly repayment is adjusted annually - it makes no difference over the term. You do however that the opportunity of phoning to adjust it if you wish. My mortgage offer clearly stated that it was adjusted annually.

I believe the HSBC tracker available at present is 0.99% above base rate. You have 0.18% above base rate. Why on earth would you consider changing!!?

Foreversummer

pfpf

i have a Woolwich tracker that i took out in April which is base +0.59% - i am so glad that by luck another mortgage fell through and i got the Woolwich one.

i think you have an excellent product and dont quite understand your concerns! all the points you raise were/are pretty clear to me BEFORE i took the mortgage.

last week i phoned Woolwich to make sure my payments stayed at a higher rate even before the Oct/Nov cuts kicked in.

i would assume its just as simple to phone them and get a reduction if you wish, but not until the 1st of the following month as thats very clear and as far as i have seen is normal for most mortgages. it does work the other way too if the rates increase.

i dont see any problems with your product. theres LOTS of people on very poor products now, you should be elated, not finding "problems".

mad

Hi M17936 (My first post for a bit)

I have the same product as you and my monthly payments have just been adjusted from 30th September. I know this does not take in to account the 1.5% worth of cuts since 1st October, but means I am paying off more capital. I think I am really lucky to have this product so am counting my lucky stars and god knows I have not had many of them over my financial history.

It's also been indicated in a few news paper articles that there will be no 'collar' on this rate as BOE rate drops further which will make up only slightly for my pension getting hammered........

Swings and roundabouts

Old_Git

m17936 wrote: »

Whilst I am very happy to have a Woolwich Lifetime Tracker at 0.18% above Barclays Bank base rate last autumn, I am surprised at some of the features of this product that were not stated in my Mortgage Offer. The problem areas are

(1) although the interest rate charged changes on the first of the month after a Barclays Bank base rate change, your mortgage repayment does not actually change until the mortgage year end which is September 30th. This means that when bank rate falls you are repaying more capital for the rest of the mortgage year, rather than having your mortgage payment reduced automatically.

(2) I found out by chance that you can call and ask for your mortgage repayment to be "manually recalculated" after a change in the bank rate but this has to be done each time there is a change in bank rate. Given the sophistication of computer software today, this arcane process is a completely unneccessary imposition on customers.

(3) Although I was informed that the mortgage year end was September 30th 2008, my expected reduction in mortgage repayment as a result of the February and April 2008 bank rate changes will not begin for some reason until my November 2008 repayment.

(4) The Woolwich website describing their Tracker Mortgages states "So when Barclays Bank Base rate falls, your monthly repayments fall. If the rate rises, so will your montly mortgage repayments". This does not fit my experience.

this is exactly what has happened to me .Rate changes have have taken effect the following month .

pfpf

mad wrote: »

Hi M17936 (My first post for a bit)

I have the same product as you and my monthly payments have just been adjusted from 30th September. I know this does not take in to account the 1.5% worth of cuts since 1st October

2% of cuts i think you'll find.

sx7uk

I found out about the interest only being calculated once a year and couldn't believe that a financial institution would do this.

I contacted Barclays about this and asked if the interest rate jumped from 3.48% to 25% would they still charge me 3.48% for a year. His answer was yes and I even got him to check with his superior in case he was wrong, after checking he said it was definitely true and they would only recalculate at the end of the year.
If I had realized this I would have used another bank for my mortgage.

The crazy thing is that they calculate the money I offset against the mortgage daily which is way more difficult than calcualting the interest rate daily!

I will be contacting them every time the interest rate changes and would recommend everyone else does so they change the once year nonsense to something more acceptable.

payless

On annual review mortgages ( not un common- sometimes an option )

The rate charged is the underlying agreed rate ( ie base + whatever), its only the amount collected by DD thats does not change - the difference is taken as an overpayment .

lulu999

I guess you're all probably on repayment mortgages? Mines the same 0.18% deal but interest only. I'm informed of the new amount to pay with effect from the next month every time BBBR changes. With interest only there is no other way of doing it. With a repayment mortgage your 'overpayments' in interest will reduce your principal amount.

sx7uk

My direct debit is a different amount every single month as the offset is taken into account.

It is correct that the over payment reduces the amount owed/length of mortgage, but to me the whole purpose of a tracker is that it tracks the bbbr rate and is adjusted accordingly.

m17936

thanks for all your replies. i understand that i have a good product but the 0.18% is above the Barclays Bank Base Rate (BBBR) not BoE base rate. when i phoned about the 1.5% cut they said that they might not pass the full benefit to tthe customers because the percentage is linked to their own rate rather than the BoE and therefore they can do whatever they want.
i was considering the HSBC only because their product is linked to BoE base rate.