AIBU to think that Barclays should have honoured this? Urgent advice needed please.

[theedgeofthecloud]

Long-time lurker, first time poster. Posting here for traffic. Please be gentle .

DP and I are in the process of buying a new house. Moving closer to parents as Dad is very ill and Mum not coping as his carer. We are having to borrow more to do so, as we are moving from a cheap area into a much more expensive one.

We are long time Barclays customers, over twenty years. We currently have c. £53k left to pay on our mortgage (split into two parts) and 9 years left to pay it. We were very fortunate to get a great lifetime tracker deal when we first took out the mortgage: On £16k we pay 0.85% above base rate (so 1.35%) and on £37k we pay .19 above base rate (so 0.69%).

At our Agreement in Principle meeting with Barclays in November it was agreed we could port this current mortgage and, crucially, extend the term of it to 18yrs if we needed to. We subsequently decided we did need to extend it, in order to be able to have affordable monthly payments. The house we bought is at the top of our budget.

For the extra borrowing (which is £163k, taking our total loan to £216k) we have discussed the new rates Barclays would offer us. We are going with a 3-year fixed rate of 1.64% (more expensive than the rates Barclays first showed us in November, which is also not hepling).

On the basis of these discussions and working out our monthly payment scenarios, we find a house and have an offer accepted. I meet with Barclays yesterday to get the mortgage approved and signed off and the advisor starts off the meeting by telling me that as of January - as in 4 weeks ago - Barclays have changed their policy and they will no longer allow us to extend the term of the £53k part of the mortgage to 18 years. If we want to keep the lifetime tracker rate, we have to keep the term of that part of the mortgage to 9 years. This 'mixed term' scenario makes the monthly payments too expensive. So, the only option is to give up the tracker rate completely and put the whole £216k loan onto the fixed rate. Meaning that although our monthly payments will be affordable, we will be paying much more for our mortgage overall (my maths isn't good enough to do work out how much more). I asked the mortgage advisor if there was anything at all we could do, or anyone we could speak to, but was just completely shut down. If we want to keep the lifetime tracker rate, we can't extend the term and we've missed the boat by four weeks.

There are numerous articles in the press about banks doing what they can to get customers off of these cheap lifetime trackers. I am supposed to post back the signed mortgage papers today and am sat here hesitating and loathe to do so. I just want to ask if anyone has any advice about either taking it up with Barclays or whether we should just suck it up and accept that we've had a good deal and now we've got to face the reality of our situation and give up our tracker. I also appreciate that base rates are likely to rise so it will not be quite as good a good a deal when that happens.

Thank you wise women of Mumsnet.

[2bluestars]

Have you tried shopping around? Seeing what a broker could come up with for you?

[theedgeofthecloud]

Thanks for responding. We decided not to shop around initially on the basis of wanting to stick with Barclays and our favourable tracker rate and having had the discussion with them when they assured us we could both port and extend the term of the mortgage. We are also quite brand loyal (which apparently counts for nothing!). We now don't want to hold up the moving process by starting again with a new lender. Feeling somewhat trapped by this situation!

[MonkeysMummy17]

Have you got anything in writing with the information confirming how long you have to act on the mortgage before their offer expires?
If you're going to have to remortgage are they charging to move to the new product? If so it might be worth looking elsewhere and contacting a broker to see what deals are available as Barclays might not be the cheapest overall, you just need to assess what the fees will be to leave Barclays in the first place

[MaverickSnoopy]

Have you asked why when you had been told this option was available to you, that it would not be after x date and why you were not given pre warning?

[Judashascomeintosomemoney]

After your Agreement in Principle meeting what paper work were you given? And no, brand loyalty means nothing anymore, sadly.

[carrielou2007]

I’ve just been with this with Barclays (moved house on 15th Dec) and was close to expiry date of mortgage offer due to blasted top of the chain. Luckily extended lifetime tracker and fixed rate 3 years borrowed on the rest but mortgage advisor was quite clear if I missed the deadline what you’re describing would be the case. Even with shopping around the lifetime tracker deal made massive massive difference.

[Judashascomeintosomemoney]

Ah xpost with others. AIP usually have a stated time limit.

[Hillarious]

We're in a similar situation to you with a lifetime tracker. We were disappointed when we took it out, as we'd missed out on what we thought was a great fixed rate mortgage, and hadn't expected how well we would do when the interest rates plummeted (my first mortgage had an interest rate of 15%). We'd renegotiated in 2007 when we did an extension and by the time interest rates had settled we were paying no more on the mortgage than we had before we did the building work.

I think any of us on these rates are living on borrowed time and we'd be having our cake and eating it if we were allowed to change the terms and extend the period of the mortgage. We certainly weren't allowed to when we did a second extension in 2010, so part of our mortgage is on a different rate, and you can bet the bank would want us to pay off the part on the lower interest rate if we ever want to make an over-payment.

In the long run, I think you'd be wise to take out the fixed rate and tighten your belts in the meantime.

[G120810]

You didn't sign anything and things change in banks I would shop around even though u are brand loyal u never got loyal back I wouldn't just go with a mortgage deal because of loyalty that is silly and shop around quick it's a massive purchase and you may lose sale but you don't just do it to not hold up sale

[theedgeofthecloud]

Thanks Monkeys. The Agreement in Principle offer basically says that the bank is in principle happy to lend us up to £xxx,000. It doesn't go into detail about products or rates.

The only charge we are being asked to pay is £999 to secure the fixed rate we want.

Maverick - mortgage advisor just said that the new policy came into play in January and that he didn't know about it when we met in November.

Like I say, we would normally review and shop around but are really up against it time wise.

Thanks for replies.

[theedgeofthecloud]

Thanks everyone, I really appreciate your replies.

CarrieLou - were you given the option to extend the term of your tracker then?

It's an interesting point about over payment. Can you specify which bit of the mortgage you want to overpay? i.e. the most expensive part?

[awankstainonhumanity]

If Barclays havent yet done the survey then you won't be holding anything up. If you go with a broker such as London and Country you could have your new provider by Monday. Hardley a hold up at all.

[theedgeofthecloud]

To clarify, it was an Agreement in Principle we had in November, which just confirms that broadly speaking they are happy to lend us the money. There is no reference to specific products, rates or terms. Which is why I don't think we are in a position to challenge the decision.

[Jassmells]

We have a very low rate similar product with nationwide. When we moved they were desperate for us to give that element up but it was lifetime so we could port it. We kept it and took a new mortgage on the balance. You can keep the old but no matter how hard they try to dissuade you it's just deciding what you can afford with the balance, unfortunately rates have changed since November so unless you paid a product reservation fee they will just only be able to sell you new products.

[theedgeofthecloud]

Thanks awank. I will talk to DP tonight about us shopping around this weekend. I didn't realise we could get things moving that quickly (long time since we last moved).

[ViceAdmiralAmilynHoldo]

Get on the phone to a broker today. You need to shop around asap. Brokers often have deals that aren't on open market if you already have decent equity.

[needmysleep75]

Google local Mortgage Brokers, find one with good reviews. Ring them, you could have an appointment tomorrow and a mortgage sorted by Monday. They have access to rates that you don't, can search the whole market in minutes and the one we used cost us nothing as the provider we went with paid them the cashback they were offering customers. And I was happy to give them the £500 to get it all done for me

[RubberJohnny]

We had exactly the same situation five years ago. Great tracker and needed to up it. Barclays couldn't extend it or increase the amount. We got another mortgage for the remainder. They are well within what all mortgage providers do sadly. We had a really good financial advisor on board and he couldn't get any movement from them for us.

[gillybeanz]

Use a broker, should cost about £1k but completely worth it.

[RubberJohnny]

Hand no, an agreement in principle is nothing. And even then if it's as long ago as November things can change regulations wise. Our offer from them wasn't as good a fortnight after we'd seen them and as we'd not signed anything we couldn't argue with them that we wanted the original offer. Banks are like bookies, they won't lose out.

[theedgeofthecloud]

Thanks everyone. Much appreciated.

I think the upshot is that whatever happens, unless we can find an extra £200 a month, we are going to have to lose the lifetime tracker on that £53k part of the mortgage, which is gutting. Or, we pull out of the house sale and find a cheaper house where we can afford to keep the tracker on the 9 year term and put the rest on a new rate 18 year term. We absolutely love the house we have found and are loathe to do this.

Lots to think about.

[needmysleep75]

Honestly, ring round see if you can find a broker that you only pay if/when you complete on what they find you. Ours was so if they can't find you anything better you don't lose anything

[theedgeofthecloud]

Anyone of the view that losing a great lifetime tracker is not that big a deal given future economic uncertainty and that base rates likely to rise and that's it's possibly a good time to get ourselves on to a fixed rate? [grasping at straws emoticon]

[BarbaraofSevillle]

Could you put the rest of the mortgage on a 25 or 30 year term and then overpay as you can afford to and certainly when the 9 year tracker bit has been paid off?

Is there anything about rules of portability in the original T&Cs?

Anything on the mortgages section of Moneysavingexpert or Consumer Action Group forums? Very knowledgeable people about doing things the absolute cheapest way and getting one over on the banks on both forums.

Is it worth going to (or threatening to go to) the Financial Ombudsman?

[3boys3dogshelp]

Definitely phone London and Country. We used them last time we were due to remortgage. We have an excellent tracker rate and after lots of research they advised to stick with our current bank. They were excellent (and fast) and as we didn’t proceed we didn’t pay anything. Surely worth the cost of a phone call?
Alternatively can you look leaving the tracker portion alone but extending the term of the rest of the mortgage to make it all more affordable? Once you pay off the tracker in 9 years you can overpay and bring the term back down? I’d try really hard not to give up your tracker if you can.