Woolwich Base Rate Tracker Query

Liney_2

Hello

We have a Openplan Offset mortgage with Barclays/Woolwich.

We noticed our payment has doubled in the last month - we called Barclays to query this as the base rate has been falling. The amount we are offsetting hasn't changed considerably.

They told us it is policy that WE call them each time the base rate falls for them to adjust the figures. So they have not been following the base rate for the last few months (we took out the mortgage last year) so it has been fixed since September.

I thought the clue was in the name 'Base Rate TRACKER'!!!)

We had an offset tracker mortgage with them for 9 years previously and THEY notified us in writing each time the base rate changed and advised us of our new repayments.

Surely if the base rate goes up they don't wait for US to notify them.

They said someone would call me back but surprise surprise no one has as yet.

Has anyone else had this experience?

foreversummer

This should help you.

http://ask.barclays.co.uk/help/mortgages_homes/BBBR_tracker

Foreversummer

KathysBoy

We had a Woolwich OpenPlan Tracker for about 8 years until the start of 2007, when we sold our house and repaid it. As far as I recall we used to get a letter on the anniversary of taking out the loan, revising the monthly payment, (as described in the link posted by foreversummer) but on a couple of occasions I telephoned them and they told me how much I could reduce the payment to, and changed it from the next payment. I used to leave it as I could afford the overpayment, and it was just reducing the capital faster.

Liney_2

Thanks guys - after checking online today it appears they have reduced the term of our mortgage from 24 years to 14 years - without asking us! And when we spoke to them yesterday on the phone they still told us it was 24 years. The change in terms would explain the hike in payments to double - roll on 8.30am I shall be straight on the phone again. Grrrrr!

aurora_borealis_2

Liney wrote: »

Thanks guys - after checking online today it appears they have reduced the term of our mortgage from 24 years to 14 years - without asking us! And when we spoke to them yesterday on the phone they still told us it was 24 years. The change in terms would explain the hike in payments to double - roll on 8.30am I shall be straight on the phone again. Grrrrr!

How did you check online?
I have the same mortgage and have been unable to access it online since it went to Barclays. I haven't got a clue what's going on with it!

alleycat`

As per the foreversummer post.

Your mortgage term is still 24 years but you are paying it off faster currently.

"If" rates stayed the same and you continue paying as you are you will be done with it in 14 years having saved yourself a bucket load of interest.

However, if rates go up above what you were paying at the anniversary of the mortgage then you may well find you end up under paying and your term will go up (plus you'll end up paying more interest as well).

If you don't like what you are paying you can phone barclays / woolwich each month and move the payment to the correct amount for that particular point in time.

It is a pain but it is a free phone number.

It wasn't very well explained to me when i signed up that the payment is only adjusted annually but it was in the small print.

Quite frankly with interest rates as they are i'd rather get shot of my mortgage 5 to 10 years sooner since any savings i could make on it are going to be pretty rubbish - obviously you don't feel the same?

I can understand the annoyance of poor explanation (and it not behaving as some other trackers do) but to be mad your mortgage is going away faster and in the long term is saving you money strikes me as odd

Liney_2

aurora_borealis wrote: »

How did you check online?
I have the same mortgage and have been unable to access it online since it went to Barclays. I haven't got a clue what's going on with it!

I just shows up online along with the accounts we offset against the mortgage. We still get a monthly statement in the post - do you? Perhaps give them a call - 0800 022 4022. You need your mortgage ref number when you call.

Liney_2

alleycat` wrote: »

As per the foreversummer post.

Your mortgage term is still 24 years but you are paying it off faster currently.

"If" rates stayed the same and you continue paying as you are you will be done with it in 14 years having saved yourself a bucket load of interest.

However, if rates go up above what you were paying at the anniversary of the mortgage then you may well find you end up under paying and your term will go up (plus you'll end up paying more interest as well).

If you don't like what you are paying you can phone barclays / woolwich each month and move the payment to the correct amount for that particular point in time.

It is a pain but it is a free phone number.

It wasn't very well explained to me when i signed up that the payment is only adjusted annually but it was in the small print.

Quite frankly with interest rates as they are i'd rather get shot of my mortgage 5 to 10 years sooner since any savings i could make on it are going to be pretty rubbish - obviously you don't feel the same?

I can understand the annoyance of poor explanation (and it not behaving as some other trackers do) but to be mad your mortgage is going away faster and in the long term is saving you money strikes me as odd

Thank you - this is what they explained to me over the phone too.
I am still perplexed (being thick) though as to why if they set our rate in September why our payments have almost doubled from December to Feb - the amount we are offsetting hasn't changed by more than £200.

PS we could pay the mortgage off (i know am very lucky) but we are about to extend our property so are going to use the offset money for that - so our payments will go up anyway once we start spending.

dewexdewex

I've been having trouble understanding these as well, but I get it now.

The two things you have to appreciate are

1: The interest you pay on the loan (which determines your monthly payment) is set by Barclays once a year in September at 0.75% above the bank base rate.
2: The interest you save by offsetting changes daily and is calculated also at 0.75% above bank base rate.

So, in a situation like we have now, we're paying monthly repayments based on last September's base rate plus 0.75 (which was 4.75% at that time) until this coming September, when the repayment should go down to that based on a base rate of 0.5% (if rates stay low)... But: currently, we get little benefit from our offset money, as the savings on interest are calculated using the daily rate, which is 0.5, plus 0.75.

It's swings and roundabouts, I guess. If Interest rates suddenly shot up to 15% from 0.5% the day after barclays set their annual rate, we'd be quids in if we had loads of spare cash in our offset accounts.