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.

[theedgeofthecloud]

Thanks again everyone. I'm taking all of your advice and comments on board.

[Caroelle]

We moved house several times, and we always take out a fixed rate. Current one is 1.94% it runs out in June. SVR where we have our mortgage is 4.74% so quite a big increase. In your shoes I would ask to extend the £163k on a fixed rate to a longer repayment period and overpay as much as you can. We will be paying our mortgage off this year after a legacy when MiL died, but have overpaid for years. And if you are going to help to care for parents, are they in a position to give you any financial help?

[DianaPrincessOfThemyscira]

No they are not obliged to. It’s not your fault the policy changed, equally they can’t just waive parts of the policy that don’t fit your requirements (even if it was only changed recently).

Also an AIP does the barest of soft checks and is ‘in principle’. The principle being the policy could change or they could decline based on a number of reasons.

You could try a complaint but honestly you will wait and they will still say no. They are under no obligation to reward your brand loyalty. If I were you I’d cut my losses and try a different lender for a better rate.

[carrielou2007]

Hi OP, my original mortgage was 105k and had overpaid so was able to ‘port’ the 42k remainder and extend the term to 22 years. I added another 78k so 120k in total with a fixed rate for 3 years for the new part. I don’t know if equity makes a difference as the old house I could add 160k towards the new house something about proportion against borrowing? My mortgage advisor did tell me that their rates/offed do change all the time but she did tell me about Barclays trying to get everyone off these super low tracker rates

[theedgeofthecloud]

Milton

[MiltonBurnedTheBuildingDown]

I understand you're disappointed and must feel let down. But if you're at the top of your affordability you're probably more secure with a fixed rate, especially if it's a long term deal. Rates are low, but can go up, a tracker could bite you on the bum in a few years.
Hope you get sorted and are happy in your new home.

[Missingstreetlife]

Worth trying a complaint?

[theedgeofthecloud]

That's interesting Beachy, thank you. Perhaps we should have been surprised that Barclays were initially happy to extend the term at all. It's just galling that their policy changed 4 weeks ago.

Hadthesnip - many thanks for this advice. You're right, the good tracker rate does now only relate to about a 1/4 of the mortgage, so it's not like we're losing the rate on a huge sum.

[BeachyUmbrella]

Barclays will have taken out derivatives to protect themselves against movement for that £53k portion and those instruments will only last another 9 years.
If you ask to port a mortgage and as part of that transfer, you want to extend the term, you are not really porting the mortgage, you are asking for a different product.....

[FluffyWuffy100]

I’d fix for 5 or 10 years right now

[theedgeofthecloud]

Thanks everyone. Great advice here.

We can only extend the bigger/newer bit of the mortgage to 18 years, bank won't let us go any further, we are of a certain age

What we really want to happen is for Barclays just to honour what was discussed in November and just let us extend the £53k bit of the mortgage to 18 years. Problem solved! But I can't see what us minions can do to persuade them

[hadthesnip]

I am a financial & mortgage broker (not on here to drum up business) & I will say that the AIP is just an agreement to lend you a certain amount, not over a specific term or at a specific rate. Rates are changing week to week but as a broker I'm normally given the "heads up" by a day or two that this is happening so I can get any prospective applications submitted. Once submitted they are often held at the agreed rate (not always) but only for a few weeks so as to get all the paperwork (wage slips etc) together. Once an offer is produced then that is usually valid for at least 3 months, sometimes as much as 6. Lenders are always changing their T&C's & do not have to give you any warning.

Although it may be galling to lose some very attractive base rate trackers, you may want to think about going elsewhere or taking all your new loan on 1 new rate, seeing as only a small proportion now is going to be at a low rate & an average rate may not be that bad overall. I understand your commitment to Barclays (with the low tracker rate) but I would seriously advise you to speak to a mortgage broker.

If time is an issue you could perhaps go with Barclays but not go fixed but tracker or something with no redemption penalties (even if it meant initially a higher monthly repayment and/or shorter term) and then once you've moved in re-mortgage when you have more time.

[BarbaraofSevillle]

Read anything offered to you by L&C very carefully. If we had taken the crappy product we were offered by them, we would have paid thousands extra in interest over the last 11 years - we wanted a lifetime tracker that tracked the BoE base rate and they offered something with a short term discount off the SVR, tried to claim it was equivalent and got arsey why I explained why it wasn't and we wouldn't be taking it.

[BarbaraofSevillle]

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

Interest rates would have to go up by nearly 1% for your tracker to meet your fixed rate offer, and even further than that for it to be more expensive, and they would have to stay up for the remaining term of the tracker.

This would probably have a significant cooling effect on the economy and possibly put the country back into recession as there is a lot of personal, business and national debt out there. The economy and spending is currently being propped up by historically low intererest rates, so rate increases would have a big impact so might not happen to a great extent.

We also have 9 years left on a 0.38% above BBE with HSBC, so comparable, but not quite as good as yours. Banks must be kicking themselves offering such products just a few months before interest rates hit the floor.

[Bluelady]

I think you've hit the nail on on the head. A tracker isn't great when interest rates are only going one way. A good fixed rate looks like the way to go.

[3boys3dogshelp]

Cross post!

[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.

[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?

[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]

[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]

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.

[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.

[gillybeanz]

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

[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.

[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