I have a lifetime tracker or offset tracker, but my monthly payment hasn’t reduced in line with the Bank of England base rate. Why not?
The interest rates on all Woolwich tracker mortgages are linked to changes in the Barclays Bank Base Rate (BBBR). Any change in the BBBR will be applied to your interest rate on the first day of the month following the change. The time at which your monthly mortgage payment will change depends on whether the mortgage is interest-only or a capital and interest (repayment) mortgage.
Interest-only
If your Woolwich mortgage is interest-only, your monthly mortgage payments will change the month after any base rate change. This also applies if your mortgage is part interest-only and part repayment.
Repayment
If you have a Woolwich repayment mortgage, then your monthly mortgage payments are reviewed annually - therefore will remain unchanged until the annual review date. While your monthly repayment will not change immediately, the interest rate that is applied to the mortgage account will change on the first day of the month after a base rate change. This means that if the BBBR reduces (between annual reviews), more of the monthly payment will be used to reduce your mortgage balance (the capital). The actual monthly payment amount will change at the annual review date, ensuring the mortgage is paid back over the original term.
You can however request a recalculation of your monthly mortgage payment at any time (eg after base rate changes or overpayments) by calling 0800 022 4022*. This will result in a re-calculated payment the following month. This policy applies whether the base rate increases or decreases. The policy to annually review your repayment mortgage is clearly stated in your Key Facts Illustration, mortgage offer and associated terms & conditions.
Does my lifetime tracker or offset tracker have a minimum interest rate, sometimes referred to as a ‘collar'?
No. There are no ‘collars' on Woolwich tracker or offset mortgages sold to date. This means that you will continue to benefit from any further reductions in the Barclays Bank Base Rate.
* Lines are open Monday to Friday 8.30am-5.30pm. To maintain a quality service, we may monitor or record phone calls. Read call charges info.
