Tracker mortgage rates might not drop. Fight back against restrictive 'collars'.

aitch-aitch

Hurdler wrote: »

I have a strange one... I just rang up Woolwich as the only adjustment I had was back in October... turns out that was their annual adjustment based on a drop in the rates.

Looks like... they have been adjusting the interest rates for trackers (I will be paying 1.97% in Feb) BUT... they kept my Direct Debit the same, so effectively I have been overpaying.

Now - I realise long term this is good because I have a nice buffer for when the rates go up again... but there is a teeeeeeny tiny bit of me that feels that I would have liked the money back in real terms and then made the decision as to whether to overpay/use the money for home improvements.

Of course I can ask them to give me the full reduction so that I can see a real effect in my paypacket...

I think now we are post christmas and post Xmas-credit card bills it's probably prudent to reassess my budget and continue to do home improvements/overpay and at least I understand what they're doing.

If you look on their website it does now have a section for "what happens when the BBBR changes" and it does tell you that payments are only review annually but you can ask them to change at any time.

They also state that any overpayments will be applied to the capital which is good (providing you haven't got penalties for early repayment). I made overpayments on a mortgage I used to have with Yorkshire Building Society and I had to ring each time I made an overpayment to ask them to apply it immediately to the capital otherwise the interest charge didn't change.

Have checked my mortgage re overpayments and we are allowed to make upto 10% repayment each year without penalty.

mrjamin

Any news on whether Britannia would be introducing a collar? When I spoke to them last, they said their existing tracker mortgages do not have a collar, but they reserve the right to instate one with 30 days' notice, even on existing trackers.

In the mean time, I'm happy knowing that I'll have at least one month with a mortgage at 2%! Crazy.

morrisoscar

I've disputed the collar imposed on my tracker by Nationwide, they have tried to impose a collar on my deal even though there isn't one in the t&c's. Got the following reply.

As a mutual it is important that we act in the interests of our members as a whole. We have around 1.4 million borrowers and over 10 million savers.
We have done a huge amount to support many of our borrowers and we must now also ensure that we do our best to look after our savers. As a result, in order to balance the needs of borrowers and savers, the existing tracker floor will be enforced if base rate falls below 2%.
It will be applied at the rate of 2%, rather than 2.75%, as a temporary concession. This means that if the base rate falls below 2%, the mortgage rate will not fall below the level they are currently being charged. Tracker rates will remain at 2% (plus or minus the differential of each tracker product) until the base rate rises back above 2%.
A tracker floor of 2.75% is already stated in your mortgage conditions. This new, temporary floor of 2% is advantageous to all Nationwide's existing tracker customers as it is 0.75% lower than the 2.75% floor which Nationwide are entitled to apply.

They also told me the clause was in the KFI for my deal. Remarkable, as my offer was dated Aug 2004 and the mortgage started in Oct 2004 before the FSA introduced KFI's. I sent them a copy of my offer document which has the following clause and is the only reference to the base rate.

BANK OF ENGLAND BASE RATE - In the event of the Bank of England ceasing to set a relevant interest rate, we may, by resolution of our Board of Directors, declare some other comparable rate to be the Tracker Rate for the purpose of these conditions.

Response from Nationwide

Due to the nature of your enquiry, your message has been sent to the Customer Service Team who administer your account. You will receive a written response from your Customer Service Team within 7-10 working days.

Morrell of the story - check your documents and don't always take their first answer. Nationwide may refer you to documents and clauses that possibly only exist only in their imagination.:rotfl:

surreysaver

Guanajuato wrote: »

What's annoyed me slightly is that the rate changes only take effect from the next payment date after the base rate change - which is my case has been just a day after a payment!

But that works both ways - it will also be a couple of months until you pay more when rates go up.

pacman_2

A bit of advice please. Contacted Nat Counties re the floor for the tracker mortgage of 3%. Got standard letter back, interest of savers etc, floor will be kept at 3%. My question is if Abbey, NW and Halifax can reduce floors in the light of extraordinary economic conditions, why can't Nat Count? The base rate has dropped since to 1.5%, so I'm paying twice the base rate. Even a drop to 2% would makea big difference. I'm sure this is not what Messrs Brown and Darling had in mind. How can I (and other borrowers in same position) put pressure on these buliding societies? If rates fall down to zero, these floors will start to look draconion.

Baa77

I have a Lifetime Base Rate Tracker mortgage with Nationwide(0.89% above the current Base Rate 15 years to go), I have now received a letter saying that the original 2.75% floor has been ignored and that a floor of 2% has been applied. With a warning that Nationwide reserve the right to reapply the original 2.75% floor in the future.

Would now be good time to convert the tracker to a fixed rate mortgage(allowed within the tracker contract) as the current 2.89% rate is the minimum rate that the mortgage will go to, or may a lower rate be imposed in the future?

RICH2002

jasper12 wrote: »

Spoke to YBS today and seemingly their tracker collars are under review at the moment and there will be announcement on 15th January.

Keep those fingers crossed folks and keep on with the complaint calls/letter :T

jasper
noticed my interest rates has now changed to 2.75% taking into account the December rate cut. gotta wait till 15 Feb at the latest for the january cut to take effect.
Happy days

jasper12

RICH2002 wrote: »

jasper
noticed my interest rates has now changed to 2.75% taking into account the December rate cut. gotta wait till 15 Feb at the latest for the january cut to take effect.
Happy days

good news :T

was going to give them a call tomorrow as just got back from hols today and there was nothing waiting in the mail.....hopefully this will be the case for us all

Tharweb

jasper12 wrote: »

Spoke to YBS today and seemingly their tracker collars are under review at the moment and there will be announcement on 15th January.

Keep those fingers crossed folks and keep on with the complaint calls/letter :T

Does anyone know what the result of this review was?

milanos

I notice for new Nationwide mortgages it says the tracker floor is just 0.01% now. Can anyone advise if this is just for new mortgages? Do existing ones remain at 2% or whatever it was? The reason I ask is that mine seems to have stayed at the higher figure whereas my fathers has reduced despite the mortgages being very similar and taken out at the same time. Both had previousy been advised that the floor would be 2% i think.