Barclays won't honour my mortgage contract - charging larger monthly payments

MatDixon

GDB2222 wrote: »

"an early repayment penalty to my account of £7,656 for a one-off overpayment of £8000"

This is the bit that's utterly perplexing. Clearly, nobody in their right mind would pay in £8k to have nearly all of it swallowed up in charges. So, I am really surprised that Barclays won't sort that out for you. Even if they are contractually entitled to the money (and I note that the OP says they are not), they ought to deal fairly with the OP and waive the charge.

GCAL - why not ask Barclays what it means? It sounds like their jargon used inside the bank.

You're telling me - I was on my way to the hospital for a blood test when I got the penalty notice, so my results probably went through the roof!
Fortunately the ombudsman confirmed today that penalty is no longer on my account. I will ask Barclays about the GCAL, but after six months of conflicting information im just not relishing any further contact with them to be honest.

MatDixon

A brief update after speaking with the ombudsman:

The ombudsman today acknowledged the service I've received has been appalling. Unfortunately they cannot instruct Barclays to improve on their offer of compensation, as an offer has already been made. "Their job is not to punish a business after they have already acknowledged their errors and are making attempts to rectify it".

They also state " we are not able to instruct a lender on how they make their calculations, only to ensure the method they have used has been carried out accurately to their own guidelines". But they did acknowledge the way they've chosen to calculate this GCAL is particularly confusing to follow, even for them. They also note the failings in the way these figures have been communicated. Barclays are apparently able to address how my monthly figures are calculated, but it's now up to me to get back in touch with their mortgage help desk to discuss.

So there you have it. Seems like an industry in need of some regulating. It's only my personal view but they were actually caught lying twice before their final reason for the increased monthly payments was put to the ombudsman.

The first explanation stated it was down to the early repayment penalty. The second explanation was that I hadn't paid the product fee. Finally it's due to the calculation of overpayments. If an organisation has been caught out making false claims like this (all acknowledged by the ombudsman through my recorded phone calls and paperwork history) then I think they should face some form of punishment. Otherwise you're just punishing the average customer like me by proxy.

Thank you all for your posts , I think this is as close to a resolution as I'm going to get at this stage .

getmore4less

If the ERC has been removed then all that is needed is the payment to be recalculated based on full contractual term.
That should have been done when the ERC was removed.

When is your annual review? It should reset then.
Also make sure you don't have the "don't reduce payments" set that is an option with Barclays mortgages.
Another overpayment with the adjust payment should also sort it.

A higher payment just means there is an extra overpayment you can ignore term as all that does is set the payment, what you pay determines the real term.

dunstonh

It's just their current figures show the term finishing at exactly the same date, even though I'm paying more each month.

That is normal. The contract date still remains on the mortgage statements regardless of how much you pay.

Seems like an industry in need of some regulating.

It is highly regulated. It doesn't mean mistakes won't happen. And Barclays are paying you compensation for the mistake.

It's only my personal view but they were actually caught lying twice before their final reason for the increased monthly payments was put to the ombudsman.

It is probably more likely that the person was guessing the reasons why it was that way. Not at all ideal but different to telling lies. Banks do not train the staff like they used to 25+ years ago. It has been a race to the bottom with banks. The quality has gone and we now get the service that most people are not paying for.

RADDERS

I believe that there is a mortgage calculator on this site.

So if you put in your actual details, amount borrowed, interest rate and payments that are being paid.

This should then calculate the actual end date of the mortgage if these payments are continued. Obviously when you change product you will need to look at it agin and hopefully this should then give you a bit of comfort that the mortgage will be paid off earlier than the date showed on your mortgage offer.

minimike2

Sounds like a case of the fact that it SHOULD have been applied as a part redemption with the term reduced, like they told you. Why did you say you didn't want it paid as a part redemption? I don't see how a part redemption would automatically keep the term the same?

I think the reason behind this could be very simple, if your mortgage terms allow underpayments.. some do some dont so you would have to check.

Any overpayments made can be "borrowed back" in the form of underpayments to the value of the previous overpayment. The figure for the new monthly payment will be based on the balance without the overpayment taken into account. If you wanted the payment to be based on the balance with the lump sum taken out then it should indeed have been requested to be applied as a part redemption thus the new payment being based on the new reduced balance.

Obviously the incorrectly applied ERC has factored in as well but that could have easily been sorted.

Seems like one big case of mis-communication and mis-understanding all round. Unless I have totally missed something.

getmore4less

If when made the £8k overpayment you said you wanted to apply it to reduce the term not the payment then when you got the new deal if you wanted to retain that effect then you needed to pay more than the payment required to pay the reduced balance at the new rate over the full term.

You can't have both the payment based on the full contractual term and the £8k have the effect of reducing the term at the same time.

Not able to do the calc at the moment but if you want that £8k overpayment to have effect then you need to be paying more than the £908 based on £257k with 30y 5m.