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Woolwich/Barclays SVR mortgage rate

Last post Sun, Mar 14 2010, 10:13 PM by the doc. 42 replies.
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  •  Sun, Mar 14 2010, 10:13 PM

    Re: Woolwich/Barclays SVR mortgage rate

    Ouch - that is quite a difference. Can they just do that to us? I took out the mortgage years ago - surely they have some compulsion to stick to their original promises?

    Would writing to them make any difference?

    • Post Points: 5
  •  Sun, Mar 14 2010, 9:28 PM

    Re: Woolwich/Barclays SVR mortgage rate

    To "the doc":
    The change to the definition of the SVR came in on 28 February. It makes no difference to the SVR now (still 4.99%). However when the base rate starts to increase, the SVR will follow it up lock-step. This is in contrast to what happened when the base rate fell from 5.75% to 0.5% (not all of the base rate reductions were passed on as SVR reductions). So last time the base rate was 5.75%, the Woolwich SVR was 7.89%, whereas next time the base rate hits 5.75%, the Woolwich SVR will be 10.24%. If you want to complain, that would be the basis of your complaint.
    • Post Points: 20
  •  Sun, Mar 14 2010, 8:57 PM

    Re: Woolwich/Barclays SVR mortgage rate

    Can someone clarify this for me. I got that letter from Barclays about changing from a managed rate to a tracker rate.

    Is this really bad? Will it make much difference? I don't know if I should be complaining or just forgetting about it.

    • Post Points: 20
  •  Mon, Feb 01 2010, 7:55 PM

    Re: Woolwich/Barclays SVR mortgage rate

    Alara, I don't see the point of your post at all, perhaps you are confusing the base rate with the SVR. I suggest you go back and read this entire thread before you post.
    • Post Points: 20
  •  Mon, Feb 01 2010, 7:48 PM

    Re: Woolwich/Barclays SVR mortgage rate

    hi,

    I am the same and some how I found Barclays base rate website follow the link and you can check from here:

    http://www.personal.barclays.co.uk/BRC1/jsp/brccontrol?site=pfs&task=popup1group&value=15396

    Kind regards

    • Post Points: 20
  •  Sun, Jan 31 2010, 3:18 PM

    Re: Woolwich/Barclays SVR mortgage rate

    Webflinger:

    Ace, had started to compare rates but obviously can't get anything like 0.85% above current base rate.

    Anyone with a crystal ball to help decide when's best to fix?



    I am not a financial advisor and even if I were I probably wouldn't be able to give you financial advice in this forum etc. etc., but having said that, if you're on a lifetime tracker at base+0.85% I would keep it and NOT fix. If you fix, for will pay a £1000 appn fee, and for 75% LTV you will fix at somewhere between 3.99% (2 year fixed) and 5.99% (5 year fixed), after which you will revert to a lifetime tracker at base+1.99%.

    Let's say you have 15 years left on your mortgage, and switch TOMORROW to a 5 year fixed deal. Let's say the base rate jumps ON TUESDAY to 5% (you might think you were very wise/lucky to have have just fixed your rate).

    But for the next five years you will be paying 5.99% on the fixed deal, whereas if you stayed on the tracker you would only be paying 5.85%.

    And then after five years, the fixed deal reverts to a tracker at base+1.99%, so you will be paying 6.99% for the next 10 years, whereas if you stayed on the original tracker you would still only be paying 5.85%

    Plus you paid £1000 for the privilege of paying higher rates.

    So DON'T FIX! You are on a great deal - leave it alone.
    • Post Points: 5
  •  Sun, Jan 31 2010, 2:33 PM

    Re: Woolwich/Barclays SVR mortgage rate

    Ace, had started to compare rates but obviously can't get anything like 0.85% above current base rate.

    Anyone with a crystal ball to help decide when's best to fix?

    • Post Points: 20
  •  Sun, Jan 31 2010, 11:00 AM

    Re: Woolwich/Barclays SVR mortgage rate

    Webflinger:

    I've received the same letter but have only just read it.

    I have 2 mortgages with the Woolwich which are"A VARIABLE RATE, WHICH IS 0.85% ABOVE OUR BASE RATE (CURRENTLY 0.50%) TO GIVE A CURRENT RATE PAYABLE OF 1.35% APPLIES TO THIS LOAN".

    From reading the above posts, will this remain the same, or will it increase to the 4.49% as stated in the letter?



    No, you must be on a Tracker. (The Standard Variable Rate is not changing - it is already 4.49%.) So unless your Tracker is limited term this will not affect your mortgage rate.
    • Post Points: 20
  •  Sun, Jan 31 2010, 10:25 AM

    Re: Woolwich/Barclays SVR mortgage rate

    I've received the same letter but have only just read it.

    I have 2 mortgages with the Woolwich which are"A VARIABLE RATE, WHICH IS 0.85% ABOVE OUR BASE RATE (CURRENTLY 0.50%) TO GIVE A CURRENT RATE PAYABLE OF 1.35% APPLIES TO THIS LOAN".

    From reading the above posts, will this remain the same, or will it increase to the 4.49% as stated in the letter?

    • Post Points: 20
  •  Mon, Jan 11 2010, 10:07 AM

    Re: Woolwich/Barclays SVR mortgage rate

    Vaughan:I received a letter from Barclays today about my Mortgage Current Account. Quoting from the letter, from 28 February 2010 the "Woolwich SVR will no longer be a managed rate... but will instead track the Bank of England Base Rate [yes, BoE, not Barclays Base Rate]. ... The Woolwich SVR will be calculated on Bank of England Base Rate plus 4.49%. This does not change the current Woolwich SVR rate, which remains at 4.99%. We will always change the Woolwich SVR at the month-end following a change in the Bank of England Base Rate." So, astoundingly, after increasing in steps the differential between their SVR and the Bank of England Base Rate from +2.14% pts (prior to the 08Oct08 cut) to +4.49% pts (since the 05Mar09 cut), Barclays/Woolwich have now locked in this +4.49% pts differential so as interest rates rise again, they will maintain this huge margin. Bad news for people using their Mortgage Current Account reserve. Next time the base rate hits 5.75%, the Woolwich SVR will be 10.24%, rather than the 7.89% it was last time. Here is a table showing the historical changes:
    Woolwich Standard Variable Rate (WSVR): Date		BoEBR	change	WSVR	change	differential 05Jul07		5.75%	+0.25%	7.89%		2.14% 06Dec07		5.50%	-0.25%	7.64%	-0.25%	2.14% 07Feb08		5.25%	-0.25%	7.39%	-0.25%	2.14% 10Apr08		5.00%	-0.25%	7.14%	-0.25%	2.14% 08Oct08		4.50%	-0.50%	6.64%	-0.50%	2.14% 06Nov08		3.00%	-1.50%	6.64%	none	3.64% 04Dec08		2.00%	-1.00%	5.49%	-1.15%	3.49% 08Jan09		1.50%	-0.50%	5.49%	none	3.99% 05Feb09		1.00%	-0.50%	4.99%	-0.50%	3.99% 05Mar09		0.50%	-0.50%	4.99%	none	4.49%

    Source: thisismoney articles in first page of hits on this search results page

    I am writing to Barclays/Woolwich today to officially complain and will follow up with ombudsman.

    I am suggesting they should further review the decision and ensure that the managed rate reinstates some of the ‘lost’ reductions - preferably by reducing the current SVR. I would have thought a differential of 3% + Base would be reasonable (and far exceeds historical levels).

    • Post Points: 20
  •  Thu, Dec 31 2009, 1:22 PM

    Re: Woolwich/Barclays SVR mortgage rate

    P.S. Wording from supplementary mortgage conditions sheet attached to a Woolwich mortgage offer, issued even later than mine, on 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."

    So probably I had no reason to worry.
    • Post Points: 20
  •  Thu, Dec 31 2009, 11:18 AM

    Re: Woolwich/Barclays SVR mortgage rate

    Graman:

    When I took out my mortgage I specifically asked why the Barclays mortgage followed the BBR and not the BoE. They said (and i quote).

    "The BBR is used as it has been around for longer than the BoE base rate. It will always be the same as the BoE base rate."

    If they ever change this I will take legal action.


    Well according to the Barclays link about the BBBR that I gave above: "Barclays Bank Base Rate typically follows the Bank of England Base Rate but it is not guaranteed to do so."

    The explanation you quote above doesn't ring true - for a start it doesn't explain why they changed in 2007 the defined rates on the rate sheets advertising their trackers and other mortgages from being based on the BoEBR to being based on their own BBBR.

    I imagine they told you the above verbally, and you haven't got it in writing, right?

    Here is a link to another MSM thread that discusses the BBBR.
    This post in that thread is particularly relevant,
    ...and this one,
    ...and finally this one.
    • Post Points: 5
  •  Thu, Dec 31 2009, 9:13 AM

    Re: Woolwich/Barclays SVR mortgage rate

    Good letter to have!! But i have to say that i have (almost) zero worries about the base rate relationship. Its obviously used so widely for corporate lending, personal lending as well as mortgages that i think there is no chance of even shyster Barclays cheating on that. The SVR issue is the outrageous bit....
    • Post Points: 5
  •  Thu, Dec 31 2009, 8:59 AM

    Re: Woolwich/Barclays SVR mortgage rate

    When I took out my mortgage I specifically asked why the Barclays mortgage followed the BBR and not the BoE. They said (and i quote).

    "The BBR is used as it has been around for longer than the BoE base rate. It will always be the same as the BoE base rate."

    If they ever change this I will take legal action.

    • Post Points: 35
  •  Wed, Dec 30 2009, 6:02 PM

    Re: Woolwich/Barclays SVR mortgage rate

    Vaughan:I thought a tracker was much safer, because the bank was bound by contract to follow the base rate plus or minus whatever small differential I got when I signed up.

    Actually, I should mention that my mortgage tracks the so-called Barclays Bank Base Rate (BBBR), not the Bank of England Base Rate (BoEBR). Woolwich tracker mortgages issued up to the summer of 2007 were advertised in the rate sheets to track the BoEBR, and I just missed out on one of those products. Since it was invented, the BBBR has always followed the BoEBR, but I was worried during the period of BoEBR decreases that Barclays would decouple their BBBR from the BoEBR and not pass on cuts to some existing tracker customers this way.

    However, thankfully for me, they decided to keep the BBBR pegged to the BoEBR and instead to start increasing the differential charged above the BBBR on their new products, thereby not passing on all base rate cuts to new customers, while still passing on all the base rate cuts to existing tracker customers.

    I think it would have created a huge amount of anger and ongoing resentment with existing customers (and destroyed a lot of customer loyalty) if Barclays had been tricky and ceased to peg the BBBR to the BoEBR, so I think they did the right thing from the point-of-view of their own business. For a tracker not to actually track the BoEBR would have been seen as ludicrous and misleading, despite any fine print. Also, up until mid-late 2008, the Terms and Conditions of their tracker mortgages stated that wherever the BBBR rate or "our rate" is mentioned, to interpret that as the BoEBR. Barclays might have faced legal challenges if they had defied this, which they might well have lost.
    • Post Points: 20
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