Barclays moving goal posts on older Tracker mortgage

chownz

Dear All,

This is my first post to see if this is affecting anyone else and whether they can get any sense out of Barclays Mortgages.

I have had a Barclays base rate tracker mortgage for 10 years. I pay 0.79% over base and the mortgage package includes a credit reserve facility and payment holidays. I overpaid my mortgage every month by direct debit and draw down some of the surplus once a year to pay my tax bill. All has been well and I've not heard a peep out of Barclays until late last year.

The first letter from them said that they would be making some changes and not to worry as it was all in our best interests. The first change was their cancellation of all 'special arrangements'. In my case this meant they would no longer take a larger direct debit than they were contractually entitled to, and if I wished to overpay my mortgage every month I would need to set up a standing order. Good news on the surface, a standing order gives me greater control and so I set one up.

They then wrote in December to confirm this. Again all well.

They wrote then in mid January with the bomb shell. First payment holidays were being cancelled. Secondly and most imnportantly, any funds left in my credit reserve account on the 31st March 2010 would be absorbed by Barclays and would therefore be no longer available.

I wrote straight back to them making the point that this was surely a breach of contract and that I did not accept this.

They responded on the 1st Feb saying these changes were all in my best interests and so long as they gave 'sufficient notice'.

I wrote again on the 4th February rejecting their claim and asking for financial clarification of the implications of the changes. It is my suspicion that by forcing the complete withdrawal of all surplus funds before 31st March, and only allowing payment back in by standing order, it will not be possible to put all the money back into the mortgage on the 1st April and Barclays can therefore charge a good lump of extra interest.

In my case I will need to withdraw £17,000 before 31st March, and I don't think I can pay this back in as one lump.

Barclays acknowledged receipt of my letter of the 4th February, but have not responded with any figures or clarification.

I have written again on the 5th March and have heard nothing.

There is now two weeks until I have to start moving money around and I'm getting peeved that I am being punished for being a good and prudent customer. Barclays seem to have stuck their head in the sand.

Does anyone else find themselves in the same situation or better still shed any light on the problem?

Kind Regards,



Chownz

getmore4less

Check you T&Cs,

With Barclays using the mortgage reserve on a standard tracker with a low rate is not normaly a good idea since the returned money is usualy at the SVR not the mortgage rate.


Check your T&C's

To see if you can convert to an offset product some early trackers had this option.

With Offset you have much more control over the overpayments/savings and any reserve usage is at the mortgage rate


Are you setup for on-line backing you can move money between the mortgage reserve account and another savings account instantly.

[Deleted User]

To be honest, I think there are other mortgage providers doing this too and it's not that unusual. I did read a thread on here last month (I think) about Alliance and Leicester customers (again, might be wrong) who had their credit facility 'absorbed' (as you put it) without ANY notice at all and so the money they thought they could withdraw was now locked into the property.

Of course, that's not necessarily a bad thing as it reduces the balance, but it's certainly less flexible and causes inconvenience to customers.

In reference to your post though, I don't see what the concern necessarily is here. If you have £17k in your credit facility then you can either leave it there and use it to reduce the balance or remove it (or part of it) to pay your own bills. You're right - it does give them a nice little window of incremental interest, but you still have the option if you want it to leave it there before the overpayment restrictions come into effect.

Our of interest, what are these? Some banks restrict you to £10k maximum overpayments once a year, so Barclays are really just placing themselves in line with others in the marketplace. Yes, you'll pay incremental interest as your offset mortgage doesn't exist anymore (if you see what I mean), but then again these are banks we're dealing with and they're not charities, sadly.

Thrugelmir

If you are unhappy with the revised terms of your mortgage facility look elsewhere. Maybe a mortgage with an offset facility would be a better option for you.

As a customer vote with your feet.

chownz

Thank you all for your feedback, I appreciate your comments and time.

I do use internet banking, but Barclays will now only accept overpayments by standing order. They used to accept transfers, cheques etc...

I just think this whole thing stinks - when interest rates were 6% they were quite happy to leave the account alone. Now they're 0.5% they're meddling, and the suggestion that all this is 'in the customers best interest' is misleading.

I have considered changing my mortgage, but I think this is probably what they want since they are making very little from this product at the moment.

Assuming Barclays wont respond, I will keep you posted after 1st April when I will find out what the actual cost is.

Many thanks again.

[Deleted User]

Think of it like this: you're gambling against the lender on rates. You won the gamble and you got the low rate, so the banks are now changing the betting rules to reduce your advantage.

Sadly, there's not much you can do about it apart from suck it up.

getmore4less

If your mortgage reserve account is now one of the new mortgage current accounts then I think you can put money in/out of that by internet banking.(mine shows in the list of transfer accounts )

It wlll just be the mortgage account that is now SO only.

Gorgeous_George

If I read it correctly, you are paying 1.29% on your mortgage and Barclays are encouraging you not to have 'offset savings' with them. Good.

Move the 'offset savings' to somewhere else where the rate is higher than 1.6125% (basic rate tax payer) or 2.15% (higher rate tax payer) and you will be better off.

For example, I owe about £60K on my tracker mortgage at 1.24%. I moved the offset savings (£30K) to a building society bond at 4.3% gross. After tax my savings pay the interest on my mortgage and give me £288 per year.

GG

getmore4less

Gorgeous_George wrote: »

If I read it correctly, you are paying 1.29% on your mortgage and Barclays are encouraging you not to have 'offset savings' with them. Good.

Move the 'offset savings' to somewhere else where the rate is higher than 1.6125% (basic rate tax payer) or 2.15% (higher rate tax payer) and you will be better off.

For example, I owe about £60K on my tracker mortgage at 1.24%. I moved the offset savings (£30K) to a building society bond at 4.3% gross. After tax my savings pay the interest on my mortgage and give me £288 per year.

GG

This is a tracker with barclays reserve not an offset

The rate on the resevre drawdown is normly at SVR(5.49%) not the mortgage rate on these.

chownz

I thought an update on this was in order, and having read other comments on problems with the Woolwich, the next paragraph will not be a surprise.

A quick re-cap - my Barclays tracker mortgage was being changed into a Woolwich mortgage and I was fighting a decision by Barclays to absorb all the funds in my credit reserve (mortgage overpayments) on the 31st March. Barclays were hopelessly uncooperative taking over weeks to respond, thus forcing their deadline upon me.

When I called Barclays/Woolwich to arrange to transfer all the money out of the reserve account (mid March) they said the balance was just over £10,000. Based on my own calculations and a figure provided by them in January I knew the balance was nearer £17,000.

I kept calling them up to the deadline of the 31st March. Each time they said they had the reconciliation, but they could not give me a figure and they needed to speak to their superiors. Finally, on the 31st March I was advised that because of a nationwide problem calculating the mortgages Barclays were backing down on their threat to absorb the credit reserve and that my annual statement would be issued in due course.

At the time of writing I have no idea what the balance is and simply have to wait until I receive a reconciliation some time later this month. I cannot believe how lackadaisical Barclays/Woolwich are with my money.

sulky.sue

I recently has on offer on my property that i currently live in, and therefore have found a property that i want to buy. I am currently tied in to a barclays mortgage untill the 31st October 2011 and so have to borrow the extra money for my new purchase from them. The application was approved but i have always overpayed on my current mortgage and only need to borrow 21,000 My mortgage broker has a arranged the mortgage for me, they have had all the paperwork but decided that because i am counting tax credits as part of my icome they would have to send it to the underwriters which would take 5 days, 5 days came and went and when we re enquired they said that the y needed more proof from hmrc but hadnt bothered to let us know. The correct paperwork was sent off immediatley and i was told 3 days ago there would be progress in 24 hours, so when i called this morning they said it had now gone to another set of underwriters and it will be 6 days now before i can have a survey done on the property. This so frustrating as its holding up the sale iof my property can anyone help with this. also i am having trouble explaining my self as the call centre is not in the uk.