Mortgage Rate Switch Complaint

PBO

Back in May 2014 I spoke to my current mortgage lender Barclays about switching from a variable rate of 2.49% to a fixed rate of 3.35% for 5 yrs. The decision to pay a higher interest rate was made to protect myself from sudden interest rate hikes rumoured by the Bank of England. The mortgage adviser completed the application and confirmed my fixed monthly payment would be £511.32.

It was at this point that errors on the part of the mortgage adviser and Barclays started to occur. The rate switch application was processed and the paperwork confirms the above payment as agreed. However, when I visited my online account I found Barclays had processed the application incorrectly applying an interest rate of 3.79% which had backdated to 2012 and increased the outstanding balance of my mortgage by £2438.66. As a result the monthly payment was incorrectly showing to be £523.01.

I complained to Barclays on 16 May 2014. As no response was forthcoming I then escalated my complaint to the Financial Ombudsman. After 8 months I am no further forward.

Barclays admit that their system caused the interest charged on my account to increase by £2438.66 and this amount was refunded to my account. The adjudicator at the Ombudsman's office suggested a compensation amount of £250. However, the monthly payment amount was never reviewed following this adjustment and I am currently fighting to have this corrected. When I argued the monthly payment amount was incorrect the Adjudicator ruled that he could only conclude the amount was correct based on a screenshot supplied by Barclays. No calculation has been attempted to test if this amount is correct and I have now had to escalate my complaint to the Ombudsman for a final decision.

The current issue of concern is that, on Barclay's advice, I have been continuing to pay the £511.32 agreed at the time of processing the rate switch. Barclays systems are still requesting a monthly repayment amount of £523.01. In early December I received a letter to say my mortgage account was now in arrears by 6mths to the sum of £68.65. Devastated, I telephoned Barclays who with the help of the Ombudsman have now agreed not to pursue any arrears whilst my complaint is ongoing.

I am still awaiting the ombudsman's final decision and have been advised that this will be reached within six months??? In the meantime the arrears will be escalating and I am concerned this could have a negative affect on my credit rating, given the catalogue of errors described above. I have also been told by the Ombudsman's office that I have to prepare myself for them ruling in Barclays favour, again given that this was the decision reached by the adjudicator.

I am 100% right in my calculations and I am losing the will to continue this fight.

Any help or advice on this would be most welcomed.

ViolaLass

You say no calculation has been done to check that the monthly amount is correct - have you done one to see whether you're right?

Annisele

Are you prepared to post your full calculations here? If you're wrong, somebody will probably be able to tell you so. If you're right, you've obviously not yet managed to explain why in a way that Barclays understands - and somebody here might be able to help with that.

PBO

Yes, I've used various online Mortgage Calculators and they all confirm the amount of £511 there or there about.

Last figures given to the Ombudsman as follows:
Mortgage Balance at 1 November 2014 £82,355.76
Remaining Term 17 Years 10 Months (214 Months)
Fixed Interest Rate 3.35%
Monthly Payment Calculated £511.69

This calculation was done using thisismoney.co.uk calculator

kingstreet

Have you checked your credit files to see if there is a record of arrears accruing on the account?

What did the key facts illustration on which you agreed to switch say about the monthly payment? Was this sent to the FOS with your complaint as evidence of what you agreed to?

PBO

Not as yet, as I have been told by Barclays that arrears won't be reported to the credit reference companies unless I am contractually in arrears by two monthly payments. This would mean I would have to reach £1022 in arrears before my details are passed on.

Does anybody know if this is correct?

Thrugelmir

PBO wrote: »

I am 100% right in my calculations and I am losing the will to continue this fight.

Any help or advice on this would be most welcomed.

Ok Barclays made an error that has been rectified.

After this I'm unsure what you are trying to achieve and what outcome you are hoping for. Paying an amount which is less than £10 more. Isn't a hardship. In addition you'll repay the mortgage quicker. As less capital owed will reduce the interest charged.

Sometimes in life there's far more important things to worry about.

owitemisermusa

Hi,
Could you pay the revised/incorrect amount while you are in dispute?
Saves the arrears nonsense and credit damaging shenanigans.
Hassle I know but hang in there, hopefully a resolution in your favour.
OMM

PBO

I received a Date of Offer letter on 14 May 2014 telling me that my monthly payments would be 61 payments at a fixed rate of £511.32. This letter states that if the information is correct I do not need to take any further action. The error occurred when they processed it on their systems.

I have sent copies of all documentation, including the date of offer letter, but feel this evidence may have been buried in the sheer volume of evidence I have supplied.

Thrugelmir

So how do do you pay your mortgage? Sounds as if it isn't direct debit.

PBO

I was paying by Direct Debit up until the Rate Switch, but then Barclays Mortgage Adviser cancelled it and instead set up a standing order on my behalf to pay a monthly amount of £511.32 until my complaint was resolved. Barclays never investigated the complaint hence the FOS involvement.