What is Barclays Bank Base Rate?

blue1159

House_seller_2008 wrote: »

Yes, there has been an important change on Barclay's website since the last bank rate fall. It used to say:

"Barclays Bank Base Rate follows the Bank of England Base Rate, which can go up or down and is announced by the Bank of England's Monetary Policy Committee every month."

It now says:

"Barclays Bank Base Rate typically follows the Bank of England Base Rate but it is not guaranteed to do so. The Bank of England Base Rate can go up or down and is announced by the Bank of England's Monetary Policy Committee every month."

In doing this though, Barclays have acknowledged that tracker mortgages were sold to customers while giving the impression that BBBR would be the same as the BofE rate. If they now set the BBBR differently to that of the BofE rate, anybody who signed up to one of their trackers or one of Woolwich's while the old wording was in place would feel very misled.

If people have KFI's which state that the BBBR is effectively the same as the BofE rate, then how can Barclay's now make this new statement as it directly conflicts with KFI's?

ummm, interesting and worrying. it seems to take a month for the new rate to hit my mortgage account, cs comfirmed that the 2% rate would be in effect on my mortgage from 1st jan (it will be 2.19% as mine is .19 over the bbbr). i do hope this doesn't mean then will not lower it anymore if the BofE rate drops. id have to check my contract for the wording

kayla99

My mortgage was a *hite one when I took it out, but when the fixed rate rate finished it was linked to the Bank of Englands Base Rate.................Whoo hoo, I'm on a great deal now:beer:

terrier3

knights wrote: »

I beg to differ, I would be suprised if they were ever sold to you or anybody else with this impression. The BBBR has never been guaranteed to mirror the BoEBR although in recent years it always has and I would be suprised if that changes.

It HAS been guaranteed to do so. I took out my mortgage about 7 months ago, and it it staed quite clearly in m,y mortgage offer that references to the BBBR should be taken to mean the same as BoEBR - it was part of 2 pages of supplementary clauses attached (and signed) to the standard offer. I have run the paperwork past a commercial barrister, who assures me that there is no way the Barclays can get around this, even if the base rate falls to zero - or below.....

mfhstid

knights wrote: »

I beg to differ, I would be suprised if they were ever sold to you or anybody else with this impression. The BBBR has never been guaranteed to mirror the BoEBR although in recent years it always has and I would be suprised if that changes.

Nonsense. There's credible evidence that Barclays has presented its BBBR, until very recently, as identical to the BoE rate. Advice given to mortgage brokers was to confirm to clients that the two rates were synonymous. Some KFIs apparently make an explicit link between the two rates. And until last week, the Woolwich website, in its defintion of BBBR, explained that is 'follows' the BoE rate.

All of that would surely seem cut-and-dried to any reasonable-minded person.

scshmsh1

First direct are doing an off set mortgage 1.49% above base right for life of tracker look at their web site

MarkyMarkD

Quote from supplementary mortgage conditions sheet attached to my mortgage offer, issued 10 July 2008:

Interest on tracker mortgages is charged at a set margin above or below or equal to the Bank of England base rate. Interest changes on existing tracker rate mortgages take effect from the first of the month following a change to the Bank of England base rate. All references to the Barclays Bank Base Rate in your offer document (where the reference is to "Barclays Bank PLC's Base Rate") and Key Facts Illustration document (where the reference is to "our Base Rate") should be taken to be references to the Bank of England Base Rate.

Pretty unequivocal.

One does ask oneself why they didn't simply get the wording right in the offer document and KFI, rather than correcting their error in the supplementary conditions, but clearly taking the mortgage offer as a whole, the product is linked for lifetime to BoEBR and not BBBR, should the two ever differ.

blue1159

well i am concerned i phonedup and was told i am paying 3.19% (.19 above barc base) and they reduced my payment to 585 accordingly and that i will pay 2.19 from 1st jan - i now receive a letter saying it superceeds any previous amounts i was told and i pay 3.19 from 1st jan and its 633 a month. what happened to 2.19 from jan? i take it they are going to wriggle out of offering us any drop below 3%... ????

MarkyMarkD

That simply makes no sense. BBBR is definitely 2%: http://www.personal.barclays.co.uk/BRC1/jsp/brccontrol?site=pfs&task=popup1group&value=15396 so you will definitely pay 2.19% at some stage. Barclays tracker mortgages update from the first of the month following the BBR change, so your rate should change on 01/01/09.

Would you like to scan your letter, blob out your personal name and address and account number details, and let us see how they are saying this?

PeterBalham

MarkyMarkD wrote: »

They haven't changed the definition. It's always been Barclays' own base rate, and that's never been guaranteed to equal BoE base rate.

A few points:

(1) Barclays' glossary says or said "Barclays Bank Base Rate follows the Bank of England Base Rate" - that doesn't say "is equal to", it says "follows". That could mean anything, if you take it to extremes;
(2) Another post on the other thread states that the mortgage KFIs actually say that although the mortgage is linked to BBBR, that actually means (for the purpose of determining the mortgage rate) BoEBR.

I don't have easy access to my Woolwich mortgage KFI but I will have a look at it next weekend if I remember. It would be better for people to check their individual KFIs rather than to pursue a pointless wondering exercise via this thread, don't you think?

Peter - I am rather worried about your BTL business if you can't find your mortgage documentation from 9 months ago!

Mark I have 14 buy to let mortgages most with bm solutions at base plus 0.29% , my mortgage broker copied me my T&C and t looks like I am ok its annoying though when there was so much ambiguity

MarkyMarkD

I agree. I don't know why Barclays didn't simply refer to BoEBR in their KFIs, like every other lender manages to.