Interest charged daily, monthly or yearly?

Morgage_Confused

Yeah I am going to have to take that route as every time I call Bangalore(India) I get conflicting information. I need something concrete so I know whats happening. It really cant be that difficult to just have an overpayment set of rules that I can follow.

The T&C's are clearly stating something that I am being told by the call center staff is incorrect. It surely cant be right that overpayment money just sits there without doing anything unless I ring up and tell them to deduct it from my mortgage balance. I even told the lady on the phone that an overpayment can only do either reduced monthly repayment or reduced term only to be told that is not correct. In my case it did neither.

Wouldent mind sending some kind of letter off somewhere but I am not sure where to send it. I just want to make a complaint about the conflicting advice and have something in writing stating the position with overpayments.

Joe_Bloggs

I think it is time that Barclay's /Woolwich should enable online access to mortgage accounts just like their bank accounts. Are Barclay's just too disorganized to do this or are they just obstructive for other reasons.
J_B.

getmore4less

Joe_Bloggs wrote: »

I think it is time that Barclay's /Woolwich should enable online access to mortgage accounts just like their bank accounts. Are Barclay's just too disorganized to do this or are they just obstructive for other reasons.
J_B.

Offset mortgage are on-line, but not live like the bank accounts just yesterdays ballance which is good enough for most uses.

Some customers with non offset mortgages can see their mortgages as well, not clear how or why they can.

Morgage_Confused

Ive spoken to Barclays about this online issue aswell. Again I have been told two different things depending on who you speak to in the branch.

One guy told me it was being rolled out in customer alphabetical order. The next week someone else told me it was only offsetters who could see the mortgage online.

I can see my "Mortgage Current Account" online but this of course is useless.

Spiggle

Not sure if this is of any help to you but here goes. I have had a Woolwich/Barclays lifetime tracker for a good few years (no 10% limit on OPs for me thankfully) and have made OPs for a long time. I did have a conversation with someone at the bank a long time ago where I'm fairly sure I had to tell her not to decrease the term. It is a frustrating wait I agree but I do look forward to my annual statement of the account which is when my monthly payment is recalculated for the forthcoming 12 months. I no longer pay by direct debit but have set up standing orders to pay on the first of every month.

At the moment I make a reasonable OP automatically because the SO is set higher than what they notified me it should be last year. All other OP is going into a reg saver and will be applied in lump sum at the end of the 12 month period.

I do get your frustration though especially over rates and balance. I (foolishly) rang them a couple of months back because I wanted to check their balance against my own spreadsheet. The guy I spoke to (in Bangalore I think) was not very helpful and when I challenged his stated balance he impolitely told me that if I rang the next day it would be different again and the same the day after and after ...

Oh how green with envy I am at those overpayers who can see their balances online and get the right picture day by day. Aah well ...

All the best,
Spigs

Morgage_Confused

Spigs you wrote this..

"but I do look forward to my annual statement of the account which is when my monthly payment is recalculated for the forthcoming 12 months."

You see here is where I have a big problem with Barclays and using the overpayments this way. All your yearly overpayments are not helping your mortgage untill the moment the recalculation is done so you might as well just save them up somewhere else that nets you some kind of interest and just put them on the mortgage at the years end just prior to recalculation. According to the call center to combat this you have to ring up and tell them to apply overpayments every time you make one. Which in your case would be monthly, and this is soon to be my route also.

Unless Ive completely been bamboozled now.

foreversummer

I think this is where you are getting bamboozled (and the Indians often do not have the language skills to either understand themselves or to explain it clearly).

My mortgage payment like Spiggles gets recalculated one a year. But every overpayment I make is put onto my account immediately, therefore reducing the balance and therefore reducing the interest payable over the remaining term.

My repayment term does not reduce, it is the monthly payment when it is recalculated that reduces. If I were to want my monthly payment to reflect a overpayment immediately I would have to ring them to ask them to recalculate it. I think this is where you are getting confused. But you will not lose out whichever way you do it.

Foreversummer

Morgage_Confused

Now that would be fine but its not what they are saying to me on the phone. I dont mind my repayments staying static(and perhaps changing once per year) but I am being told I must ring up and tell them to credit my mortgage with the overpayment or it just sits there.

Foreversummer are you telling me you are with Barclays/Woolwich and that is how it is done for a fact, no matter what the Indians are saying....because I am happy if that is the case.

foreversummer

Morgage_Confused wrote: »

Foreversummer are you telling me you are with Barclays/Woolwich and that is how it is done for a fact, no matter what the Indians are saying....because I am happy if that is the case.

I believe this is the case and it is how it is explained in the terms and conditions of my mortgage.

I also believe that, as I said, often the Indians do not have the full range of language skills to either understand the full details of the workings of the products or to explain it to the customers.

Have you tried ringing early morning to end of day to see if you can pick up a UK call centre?

Foreversummer

Spiggle

Morgage_Confused wrote: »

Spigs you wrote this..

"but I do look forward to my annual statement of the account which is when my monthly payment is recalculated for the forthcoming 12 months."

You see here is where I have a big problem with Barclays and using the overpayments this way. All your yearly overpayments are not helping your mortgage untill the moment the recalculation is done so you might as well just save them up somewhere else that nets you some kind of interest and just put them on the mortgage at the years end just prior to recalculation. According to the call center to combat this you have to ring up and tell them to apply overpayments every time you make one. Which in your case would be monthly, and this is soon to be my route also.

Unless Ive completely been bamboozled now.

OK, you made me think and so I dug out last years statement form my file and had a good read through it. There was a change to my t&cs in November 2010 which I hadn't read but I'm sure was put in to protect the bank rather than me!

What I surmised from this was that (for repayment mortgages) in years prior to November 2010, any interest rate changes were applied to the balance when they changed but the monthly repayment was recalculated only at the end of the mortgage year. My previous statements bear this out as they contain a list of the interest rates applicable during that year.

Since November 2010 the bank will apply a change to the monthly repayment in the month following any change as and when (and if) they occur.

Regarding whether overpayments benefit my account immediately, you piqued my curiosity and so I just bit the bullet and rang them. I spoke with Ms Bangalore this time!

She confirmed to me what I believed was the position (from my t&cs) regarding application of interest, overpayments and regular 'normal' payments.

Interest is calculated daily and charged monthly. On the last day of the month payments (including OPs) recieved are deducted from the balance and the interest due applied resulting in the outstanding balance figure.

So any overpayment made will be applied to the outstanding capital balance in each applicable month. For me that means that the monthly OP will help every month.

I don't want to muddy the water but looking back through my file I notice that at some time in the dim and distant past I spoke with them regarding my monthly payments as the interest rate had reduced but I didn't want at that time to change the monthly payment downwards as that was a natural overpayment. I left myself a note to say that I had to ring them when and if I wanted the reduced interest rate monthly payment to become applicable.

Finally, there is a whole lot of threads and discussions on here regarding saving rather than OPing which I won't go into because I do the wrong thing (my mortgage rate is much lower than what I can achieve on savings the reg saver at 8% notwithstanding).

Hope that helps and hasn't confused you any further.

All the best,
Spigs