Woolwich / Barclays Base Rate

Rikki

Trying_to_be_good wrote: »

But they also now have this on their website, at http://www.personal.barclays.co.uk/BRC1/jsp/brccontrol?site=pfs&task=popup1group&value=15396:
"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."

I admire your optimism, but that's why we're concerned.

Its always said that. The reason being if they decide to put a collar on the tracker mortgages.

I've had my tracker for many years now and its never happened. BBBR has tracked BoE base rate since the 1930's.

foreversummer

So, Brokers are being urged to reassure their clients that the BBBR is the same as the BofE Base Rate (as seen on the Woolwich Intermediaries website today - see post 12), but the Barclays website today clearly states that the BBBR typically tracks the BoE rate is not guaranteed to do so.

Have any of the brokers who regularly contribute here got anything to say about this? Surely this puts them in a very awkward position.

Foreversummer

philgods

http://web.archive.org/web/20071230085115/www.personal.barclays.co.uk/BRC1/jsp/brccontrol?task=articlegroup&value=6228&target=_self&site=pfs

samuel248

Rikki wrote: »

Its always said that. The reason being if they decide to put a collar on the tracker mortgages.

I've had my tracker for many years now and its never happened. BBBR has tracked BoE base rate since the 1930's.

Rikki

It hasn't always said that. They conveniently added the words "typically" and "not guaranteed to do so" shortly (hours) after the latest 1% BoE cut was announced, giving a whole new meaning to the definition. Hence peoples' concern and anger. As many of the posts over the last few days on this and other threads make clear, Woolwich/Barclays proudly advertise the BBBR and the BoE rate as being one and the same on their websites, glossary of mortgage terms, and KFI. They do not state (at least in my KFI) that there are any clauses that would allow them to change that.

foreversummer

First of all , any of you folk that have a KFI or mortgage offer that states "reference to our Base Rate should be taken to be reference to the Bank of England Base Rate (or words to that effect) really should have no reason to be concerned.

However, it appears from other postings that sometime during this year the KFI, offers etc started to mention only the BBBR and it is these people (myself included) who may feel a little vunerable now. The fact that they sneeked the words "typical" and "not guaranteed to do so" into their wording on the website after the last interest rate cut has caused this concern.

This is where I stand.

1. I believed that I was getting a genuine tracker mortgage with the Woolwich. My broker (who I have utmost respect for having known him for some time) was very happy to recommend this mortgage. He obviously had no concerns. Indeed, if he looked at the Woolwich Intermediaries website he was told that the BBBR always followed the BofE Base rate (see posting above). He was told by the Woolwich that in fact he should reassure his clients that that was the case.

2. I did a bit of research myself into the type of mortgage I wanted, prior to visiting my broker, and visited the FSA's own website (Moneymadeclear) where their definition of a Tracker mortgage is "A variable rate loan with an interest rate that's at a set amount above or below the Bank of England or some other base rate, set independently from the lender. It tracks (moves up or down with) that rate." (Note that the FSA mention a base rate set independently from the lender. You could argue that if the base rate it tracks is not set independently from the lender we might as well be on a Standard Variable Rate!)

3. I visited the Woolwich website myself and saw in their glossary that "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."

4. I didn't rush into taking this mortgage. I spent several weeks trying to decide whether to fix or track (a huge decision back in July with rampant inflation and talk of higher interest rates everywhere). I did my research and I visited a broker and this is what I end up with. I don't believe that the Woolwich are being very fair to their customers with their ambiguous and conflicting information. I took the risk of higher mortgage payments if interest rates went the wrong way, I expect to reap the rewards if interest rates fall.

Lets not forget however, that Barclays have passed on all cuts so far. It is only because of the aforementioned statement that appeared on their website last week that has sparked this. (I would like to know why they felt the need to put this on the website at this time).

I think if the Woolwich do try it on (and of course they may not) it is worth being prepared. I am going to keep copies of all documents, web pages etc just in case and I would urge anyone else to do so.

Rant over!

Trying_to_be_good

foreversummer wrote: »

I am going to keep copies of all documents, web pages etc just in case and I would urge anyone else to do so.

You and me both! I took out my mortgage in July 07, offers (2 of them) in May 07, neither contain the magic words though I was reassured by Woolwich at the time that it was the same as BoE, and would continue to be. This was a telephone call, and they never followed it up with the requested written confirmation.

Fingers well and truly crossed!

knights

I don't think you need to worry. Other than when rates were heading towards 15% the BBBR has always tracked the BoEBR and I suspect they always will (although there is no guarantee).

The lifetime tracker is reviewed every October and a monthly payment is set for the following year. However as others have posted and I did this a moment ago, if you ring the Woolwich (freephone 0800 022 4022), they will decrease your repayment amount, although they do ask that if rates increase you contact them again to have the amount increased !!