Barclays Fixed Rate Mortgage increases annually

morrismen

Hi,


We have a fixed rate mortgage with Woolwich. Last year on the annual summary statement, Barclays (Woolwich) tried to increase my monthly mortgage payment. We never miss a monthly payment so I could not understand this. I called them last year and their Woolwich mortgage people said they made a mistake and amended it, reducing the monthly payment by £90.


This year, this same fixed rate mortgage annual statement has come in again and the monthly payment has increased again from £520 per month to £575. I can't see why... this is the second year this has happened. Can it be a continual mistake?


We worked out that at the current fixed rate of 2.88% with only a year on the current fixed rate mortgage, we can actually repay £465 per month over a prospective remaining 8 years and still pay it off within the 8 year term (if the rate remained at 2.88%).


So why do Woolwich keep increasing our monthly payments on the annual statement (per annum) when the mortgage rate is fixed? Shouldn't the monthly payment schedule be effectively decreasing on an annual basis?


Am I missing something? Can anyone explain this behaviour please? With Thanks.

[Deleted User]

Woolwich can explain it.

Ask them.

YHM

Doesn't sound right, but as above, the key to the answer is Woolwich themselves...

ACG

There are some products out there that do increase year on year. I am not a massive fan of Barclays/Woolwich so I am not sure if they had something similar. It is probably worth checking your Mortgage offer however just to be sure.

If nothing else it just means when you do call them, you are armed. But ye if you are definitely on a 5 year fix, you need to get it resolved so it does not happen again.

amnblog

Barclays don’t do a tiered fixed rate product so this sounds like a systems issue causing an error.

An error last year unremedied will reoccur this year.

I assume you have asked them to investigate.

morrismen

So with an annual repeat problem, then if the Woolwich are acting within FCA rules, a permanent fix would have been expected rather than an annual increase on the monthly mortgage amount each year. With the Mortgage running for another year, we're seriously looking to get out and paying it off, but as with most fixed rate mortgages, you get locked in because of a £3000 early redemption charge. Nearly all fixed mortgages do this (unless anyone can advise otherwise). Even new Bank fixed rate mortgages are doing this too. Let's face it, there's no interest in savings so I am reluctant to let Barclays eat up my money further at 2.5% or more higher than BoE current base rate.

But we heard recently that the Banks have already put up the interest rates on their new mortgage products because the BoE is "expecting" to raise rates! This is blantent robbery and is exactly what is going wrong with Banking in this country, and it adds to why there is no trust in Banks anymore. It's a wonder any Banks get any business now.

It won't be long before "black market" BitCoin money loans take over traditional Bank lending and mortgages because Bank's greed is pushing it that way.

glosoli

It might be that whilst the interest element is Fixed, that there is a "step up" in place to overpay the capital on the mortgage which rises every year. These were more common pre 2010. Does any of the literatures refer to step up?

Fiesto88

morrismen wrote: »

But we heard recently that the Banks have already put up the interest rates on their new mortgage products because the BoE is "expecting" to raise rates! This is blantent robbery and is exactly what is going wrong with Banking in this country, and it adds to why there is no trust in Banks anymore. It's a wonder any Banks get any business now.

It won't be long before "black market" BitCoin money loans take over traditional Bank lending and mortgages because Bank's greed is pushing it that way.

How is it robbery? Rates change on a monthly basis, often more, depending on the market conditions and the appetite for new business the lender has. The rates are advertised, if people don’t like them, they don’t have to take them up.

getmore4less

If you are overpaying or using the reserve it can throw thing out.

A very close look at the statements it should be possible to work out what has happened.

In my case it was overpayment reducing term. I wanted payments resetting to full contractual term.

morrismen

Fiesto88 wrote: »

How is it robbery? Rates change on a monthly basis, often more, depending on the market conditions and the appetite for new business the lender has. The rates are advertised, if people don’t like them, they don’t have to take them up.

I think you're missing the point. To raise mortgage rates before the interest rates have actually been announced by the BoE is morally indefensible by the Banks. If loan markets are putting up the rates where Banks get their money from, then they should be shopping around like we all have to do. Passing on their high purchase of loans to lend to mortgage customers is not helping anyone other than the Banks. Morality in customer mortgage loan services vs Bank greed. Look what a scandal PPI become. Simply, Banks have to act more responsibly.

minimike2

How long ago was it taken out?

I recall Barclays offering stepped products in recent times but can't recall if they were fixed stepped or trackers. Have you checked your original mortgage offer?