Woolwich rate switch puzzle

browsingid

I have applied via online banking to switch my Woolwich mortgage onto a new rate.

I am a little bit confused as to exactly when the rate change will apply. The mortgage offer letter they produced at the end of the switch process (which I saved in pdf form), has two potentially contradictory statements. The "what you will need to pay each month" section of the letter says:

Monthly payments £500

These payments are based on a balance at the 05 October 2016 of £100,000. The actual payments you will make may vary slightly, as they will be based on the mortgage balance on the 01 November 2016 when the new interest rate will be applied.
26 payments at a fixed rate of 1.44%

(NB the above figures have been changed)

But earlier in the letter it says (my underlining):

As we have already started the process to make changes to your mortgage, there is no need for you to do anything further in order to accept this offer. If your mortgage product has not yet expired, we will make the changes to your account when it does.

My current two year product expires on 31 Dec 2016 - and the online rate switch link became available on 1 October. Woolwich/Barclays website says

When can I switch my mortgage rate?

If your current mortgage deal will end in 3 months or less, or if you’re on a follow-on rate, you can apply to switch to a new mortgage rate without incurring any early repayment charges. Your mortgage offer letter or annual statement will detail when your current mortgage deal ends.

https://www.help.barclays.co.uk/faq/mortgages/repayments-rates/switch-mortgage-rate.html

When I was going through the rate switch process (before the offer letter was produced), there was a stage where I had to select a start date. This defaulted to 01/01/2017 and I was not able to move this date any earlier - but confusingly the offer letter produced after this still referred to the 1 November effective date.

I don't really want to have to call the Woolwich to confirm as I always have had terrible experiences with them on the rare occasion I have to call them. If the new rate applies from 1 November it will save me quite a lot of money as I was on a massive 4.99% rate previously.

I wonder if any other MSE'ers have been through this process with Barclays/Woolwich, and have any ideas about which date my new deal will apply? :huh:

Thrugelmir

The rate change will take effect when you make the switch. In reading the letter you have to consider that not everyone will be switching early (i.e. to a cheaper rate), and instead will switch on the default date when the existing mortgage product term ends.

browsingid

That was what I thought at the beginning, but why does their FAQ say that "you can apply to switch to a new mortgage rate without incurring any early repayment charges"? If there was no early switch allowed in this process - before my current deal ends on 31 Dec 2016 - why would they mention that no early repayment charges would apply. It also seems odd that the offer letter mentions 1 Nov when they clearly KNOW when my current mortgage deal ends.

Or is it just a case of the offer letter being a boiler plate that isn't actually tailored to my specific circumstances?

Thrugelmir

browsingid wrote: »

Or is it just a case of the offer letter being a boiler plate that isn't actually tailored to my specific circumstances?

Will be a standard letter that cover a number of circumstances.

The right to apply and switch early isn't set in stone. Barclays could remove this at any time. i.e. in a response to market conditions.