Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    jonjoe1969
    What is Barclays Bank Base Rate?
    • #1
    • 5th Sep 07, 6:49 PM
    What is Barclays Bank Base Rate? 5th Sep 07 at 6:49 PM
    I've just completed on three tracker mortgages with Woolwich (one residential tracking at 0.18% over base, two buy to let at 0.49% over base).

    I got back from holiday to find that all three had completed while I was away and I saw a reference in the completion documents to them tracking above the Barclays Bank Base Rate (BBBR). I've checked the key features document I referred to when I made the application and it clearly says that they would track over the Bank of England Base Rate.

    I've got to decide whether to complain; and that will involve looking at all the correspondence including the key features, the offer letter etc to see when the change occured. Woolwich certainly didn't clearly draw this important change to my attention.

    But that's not the point for now. My question is what is the BBBR? If it historically has always mirrored the Bank of England base rate then my problem isn't likely to result in me losing money. But if the BBBR fluctuates differently to BoE base rate then I'm going to be deeply unhappy.

    I suspect the bank made this change to deal with small short-term fluctuations in the availability of inter-bank funds in which case BBBR will nearly, but not quite, always mirror BoE base rates. So, I might generally not see much, if any, difference. I know that the current rate for BBBR is 5.75%, same as the BoE base rate.

    BUT - I have tried doing some research and can't find any historic data on what BBBR has been and whether it has mirrored, or nearly-mirrored the BoE base rate. Can anyone help?

    Thanks

    JJ
Page 2
    • 02skn
    • By 02skn 17th Jan 08, 5:58 PM
    • 48 Posts
    • 38 Thanks
    02skn
    Ok, found the wording on my October annual statement:

    "If you have a variable rate repayment mortgage your repayments are reviewed once a year in accordance with your terms and conditions. This review will take into account changes to Barclays Bank Base Rate (BBBR) and Woolwich Standard Variable Rate, whicih are affected by changes in the Bank of England base rate. Since your last mortgage statement the Bank of England has increased its base rate by 1%. Your revised payment reflects all interest rate changes over the last 12 months and will be applied to your mortgage account (s) in November 2007."
    Originally posted by Floxxie
    I'am sure they never explained when signing for the mortgage that it would track yearly. Bit of a con really. Thinking of moving as even making overpayments has been a nightmare. Decision is who to go with next without incurring large costs.
  • Caro75
    I called Barclays about this and they said that -yes- you're supposed to call them every time you want your monthly payments recalculated. Otherwise as others have mentioned payments are only recalculated once a year. I had no idea it would be like this as my previous Halifax tracker mortage would always recalculate new premiums every time the BoE changed.
    What is more worrying is that the lady said I should definitely ask for new calculations, because I am being charged at the higher rate (5.75%) for the past two months. I'm a bit unclear on this since she also mentioned the extra money resulting from the decrease in interest rate should go towards the repayment part of the mortgage, but overall she made it fairly clear that I'd been losing money these past two months. After complaining about it she arranged for the complaint team to give me a call so that I could try to get my money back (called me, left a message then I called them back only to wait 1 hour on the phone with noone answering ... but that's another story).

    Does anyone have a clearer view as to why we'd be losing money with this scheme? My understanding was that if the interest rate goes down then the extra goes towards the repayment part so it would just effectively reduce the term of the mortage?
    "Cleaning your house while your kids are still growing is like shoveling the walk before it stops snowing."
  • Skeekwarton
    I'am sure they never explained when signing for the mortgage that it would track yearly. Bit of a con really. Thinking of moving as even making overpayments has been a nightmare. Decision is who to go with next without incurring large costs.
    Originally posted by 02skn
    But it's not tracking yearly ( if there is such a thing ). You're only concern is that your payment hasn't been reduced in line with the interest rate cut. This isn't the same as interest rate changes being applied once a year, this has to do with the monthly payment which, as has been pointed out, you can revise following each interest rate change. You're not being conned out of money here.
    • 02skn
    • By 02skn 19th Jan 08, 2:05 PM
    • 48 Posts
    • 38 Thanks
    02skn
    Why are they doing the Tracker thing different from almost every other lender? If the rates go down they should drop your payments. Simple as that. Why should you have to ring their expensive helpline and ask for a change .It should be done as soon as the rates rise or fall.
    • mfhstid
    • By mfhstid 20th Jan 08, 12:50 PM
    • 19 Posts
    • 4 Thanks
    mfhstid
    My understanding is that the amount of interest you are paying will change as soon as BBBR changes, but they only review the payments you make automatically once a year (in May I think). If you do nothing, and BBBR has come down, then in May they will automatically lower your payments.
    Alternatively you can ask them to alter your payments before May.

    I suppose this is to simplify things, so that if there are 3 consecutive rate changes, you don't pay different payments for 3 months.

    In the mean time if you don't change your payments at least you're overpaying your mortgage!
    Originally posted by mr_tickle
    Fair enough. Overpayments are fine and in effect reduce the APR, but that assumes the borrower can afford the extra each month. Barclays surely should be publicizing this rather more clearly; any reasonable person would expect a tracker to track monthly.

    What worries me more here is if the BBBR increases. In that situation, borrowers would be underpaying, in effect deferring even heftier increases until a later date.
  • martinlong1978
    Barclays surely should be publicizing this rather more clearly; any reasonable person would expect a tracker to track monthly.
    Originally posted by mfhstid
    It absolutely IS tracking monthly. It's not your payment that tracks, it's the interest you pay that tracks. So, like you say, the difference is additional capital you repay. So, the RATE tracks monthly. Of course, if you want your payment adjusted accordingly, you can do that.
    • TEDDYRUKSPIN
    • By TEDDYRUKSPIN 31st Jan 08, 8:28 PM
    • 1,504 Posts
    • 638 Thanks
    TEDDYRUKSPIN
    This is hilarious. I understand that the lender would answer you that the so called barclays or natwest bank of england base rate is equal to the bank of england. But????????????????????????

    Any lender have the right to increase this whenever they find fit! This not a true tracker mortgage and I will not be surprised when the FSA will tell them to make a true statement!

    It is either the bank of england but never the banks bank of england. The repo rate is the repo rate.

    It is like saying the barclays pound sterling but it isn't a pound!

    Would you buy the barclays american dollar or the exchange of the american dollar?

    Would you buy the McHonda or the Honda?
    • MarkyMarkD
    • By MarkyMarkD 31st Jan 08, 9:23 PM
    • 9,795 Posts
    • 4,216 Thanks
    MarkyMarkD
    Why are they doing the Tracker thing different from almost every other lender? If the rates go down they should drop your payments. Simple as that. Why should you have to ring their expensive helpline and ask for a change .It should be done as soon as the rates rise or fall.
    Originally posted by 02skn
    This isn't "different from almost every other lender". Quite a few lenders do or did do this.

    The reason for it is that some borrowers would prefer their payments to stay the same each month, irrespective of random fluctuations in interest rates.

    The fact that the interest rate charged on the loan is varied when it should means that there is no rip-off; if the borrower under-pays due to the payments only changing once a year, they will pay slightly more interest the following year; if they over-pay for the same reason, they will pay slightly less interest in future years.
  • jojotheruvan
    I think ......i found the answer to the BBBRate and BOEBRate issue. Please check the link.
    http://www.personal.barclays.co.uk/BRC1/jsp/brccontrol?site=pfs&task=popup1group&value=15396
  • robertg
    A quick question.

    Had our offer from Woolwich (Barclays) last week. The rate on the offer is 6.29% (BBBR plus 1.29%).

    Following the notes on the offer letter, I assume the mortgage rate will drop to 5.79% with effect from 1st November.

    My question is will our repayments which will be set automatically for the next twelve months be based upon 6.29% or 5.79%.

    I suppose the answer is it depends when we complete, ie before or after 1st November when the mortgage rate should change but does anybody know for sure?
    • minimike2
    • By minimike2 8th Oct 08, 3:28 PM
    • 2,092 Posts
    • 1,578 Thanks
    minimike2
    It will be 5.79 as it will go on the time of completion.

    Interestingly, Woolwich have been the first big player to announce that they will reduce thier SVR by the full 0.5% in line with the base rate cut. Thumbs up to them for that.
  • saveoursovs
    Barclays Bank Base Rate
    I'm on the +0.18% deal aswell, which has worked out great as there've been 3 quarter point cuts since I signed up and now today's half point reduction. And obviously since then the deals have gotten worse, with Woolwich's equivalent offer now being +0.89%.
    To answer the points in this thread, they do not adjust your payment automatically when the BBBR changes but if there is a cut all that means is that you'll be paying off more of your balance.
    Also, the BBBR does not follow the BoE rate immediately but seems to lag behind for a few weeks (although I'm sure it wouldn't if the BoE rate increased) as I've rung up within 1-2 days of the last BoE rate cut to have my payment adjusted, and was told I'd have to wait until the BBBR followed suit in a few weeks' time.
    • 02skn
    • By 02skn 8th Oct 08, 6:03 PM
    • 48 Posts
    • 38 Thanks
    02skn
    Has anybody with a Barclays/woolwich tracker mortgage had their yearly statement yet? Looking forward to ours this year as we have made quite a few overpayments in the last year.
  • feisty1
    annual statement
    Why wait? Give them a call and ask for yr balance.

    I am a Mortgage Adviser

    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • 02skn
    • By 02skn 8th Oct 08, 7:18 PM
    • 48 Posts
    • 38 Thanks
    02skn
    Barclays issue a statement yearly at the end of September or the beginning of October. Just curious to see if anybody has had theirs yet.
    • Trying to be good
    • By Trying to be good 8th Oct 08, 9:52 PM
    • 1,937 Posts
    • 2,430 Thanks
    Trying to be good
    I think ......i found the answer to the BBBRate and BOEBRate issue. Please check the link.
    http://www.personal.barclays.co.uk/BRC1/jsp/brccontrol?site=pfs&task=popup1group&value=15396
    Originally posted by jojotheruvan
    Also from their glossary:
    Barclays Bank Base Rate
    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.
    which can be found at http://www.woolwich.co.uk/mortgages/mortgage-glossary.html

    My Ts&Cs for the +0.18% tracker state the new rate will be effective from the first of the following month, i.e. 1 November this time.

    Statements are produced as at 30 Sep and should arrive by the end of October.

    If you pay by standing order instead of direct debit, you can choose to increase or decrease your payments at will (ensuring you are paying at least the minimum so you daon't fall into arrears). They also send me a rate change notice each time the base rate changes - maybe that's because I pay by SO not DD?

    Hopeless customer service, though.
    Last edited by Trying to be good; 08-10-2008 at 9:58 PM.
    Mortgage Free thanks to ill-health retirement
    • minimike2
    • By minimike2 8th Oct 08, 10:36 PM
    • 2,092 Posts
    • 1,578 Thanks
    minimike2
    The good old +.018.

    That was a cracking deal.
    • aardvaak
    • By aardvaak 9th Oct 08, 1:01 PM
    • 5,030 Posts
    • 2,157 Thanks
    aardvaak
    I've just completed on three tracker mortgages with Woolwich (one residential tracking at 0.18% over base, two buy to let at 0.49% over base).

    I got back from holiday to find that all three had completed while I was away and I saw a reference in the completion documents to them tracking above the Barclays Bank Base Rate (BBBR). I've checked the key features document I referred to when I made the application and it clearly says that they would track over the Bank of England Base Rate.

    I've got to decide whether to complain; and that will involve looking at all the correspondence including the key features, the offer letter etc to see when the change occured. Woolwich certainly didn't clearly draw this important change to my attention.

    But that's not the point for now. My question is what is the BBBR? If it historically has always mirrored the Bank of England base rate then my problem isn't likely to result in me losing money. But if the BBBR fluctuates differently to BoE base rate then I'm going to be deeply unhappy.

    I suspect the bank made this change to deal with small short-term fluctuations in the availability of inter-bank funds in which case BBBR will nearly, but not quite, always mirror BoE base rates. So, I might generally not see much, if any, difference. I know that the current rate for BBBR is 5.75%, same as the BoE base rate.

    BUT - I have tried doing some research and can't find any historic data on what BBBR has been and whether it has mirrored, or nearly-mirrored the BoE base rate. Can anyone help?

    Thanks

    JJ
    Originally posted by jonjoe1969
    It's too low!
  • stash36
    Barclays issue a statement yearly at the end of September or the beginning of October. Just curious to see if anybody has had theirs yet.
    Originally posted by 02skn
    No I haven't received one either, i phoned them and he advised they'd be out in October. If nothing by November then call back.
    He did give me a up-to-date balance over the phone however, which at least confirmed that my overpayments have been coming off..I've had the tracker for just a year so wanted confirmation
    • MarkWatson
    • By MarkWatson 18th Oct 08, 10:20 PM
    • 89 Posts
    • 24 Thanks
    MarkWatson
    While on the subject of Woolwich Buy to Let mortgages, does anyone know if they have impose a minimum floor for their tracker interest rates?

    I have a tracker at 0.49% above the BBBR but now there is some suggestion that if the B of E Bank rate (and the BBBR) goes below a certain level some lenders have imposed a floor, lower than which their rate will not fall (some say around 3%). I can't find my detailed T&Cs - does anyone know if there is a floor for Woolwich BTL Tracker rate mortgages?

    Ta!
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

214Posts Today

2,044Users online

Martin's Twitter