TheCountOfNowhere Posted May 27, 2013 Share Posted May 27, 2013 (edited) Maybe someone can confirm or deny this but someone told me about today about they Barclays mortgage/current account. The jist of it is, every month Barlcay are increasing the size of his over-draft based on some theoretical new house price value!!! He lives in London and prices are 'booming' there ( The hiroshima bomb must have boomed at one time ). He has his mortgage with barclays and was 'forced' to open the current account ( with automatic over-draft facility ). He thinks this is insane and I agree. Is this really happening ? Edited May 27, 2013 by TheCountOfNowhere Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted May 27, 2013 Share Posted May 27, 2013 Maybe someone can confirm or deny this but someone told me about today about they Barclays mortgage/current account. The jist of it is, every month Barlcay are increasing the size of his over-draft based on some theoretical new house price value!!! He lives in London and prices are 'booming' there ( The hiroshima bomb must have boomed at one time ). He has his mortgage with barclays and was 'forced' to open the current account ( with automatic over-draft facility ). He thinks this is insane and I agree. Is this really happening ? I've had a £10K unsecured overdraft facility on my current account with Barclays for over twenty years. I can't remember when I last used it, but it remains the same, never increasing or reducing. Quote Link to comment Share on other sites More sharing options...
koala_bear Posted May 28, 2013 Share Posted May 28, 2013 Maybe someone can confirm or deny this but someone told me about today about they Barclays mortgage/current account. The jist of it is, every month Barclays are increasing the size of his over-draft based on some theoretical new house price value!!! He lives in London and prices are 'booming' there (The Hiroshima bomb must have boomed at one time ). He has his mortgage with Barclays and was 'forced' to open the current account (with automatic over-draft facility ). He thinks this is insane and I agree. Is this really happening ? This sounds like another accounting trick similar to others that have been mentioned in relation to boosting lending for FLS purposes without actually boosting actual lending (usually decreasing it!) The easiest method to explain is the one banks have used is to increase the credit card limit as that is the figure they have to use for most accounting purposes not the actual amount borrowed on the card which will be less, the difference (in cheap FLS funding) can then be used elsewhere in the bank on a rolling short term basis. Unused agreed overdraft is exactly the same and they probably don't want him to actually use it as that would defeat their cunning plan... As has often been said on HPC, one of FLS's key aims is bank balance sheet repair. Quote Link to comment Share on other sites More sharing options...
Eddie_George Posted May 28, 2013 Share Posted May 28, 2013 If nothing else, the banks are certainly innovative at gaming the system. :angry: Quote Link to comment Share on other sites More sharing options...
cashinmattress Posted May 28, 2013 Share Posted May 28, 2013 Current account derivatives? Quote Link to comment Share on other sites More sharing options...
easy2012 Posted May 28, 2013 Share Posted May 28, 2013 Maybe someone can confirm or deny this but someone told me about today about they Barclays mortgage/current account. The jist of it is, every month Barlcay are increasing the size of his over-draft based on some theoretical new house price value!!! He lives in London and prices are 'booming' there ( The hiroshima bomb must have boomed at one time ). He has his mortgage with barclays and was 'forced' to open the current account ( with automatic over-draft facility ). He thinks this is insane and I agree. Is this really happening ? It is more likely than not that he is winding you up. Unused overdraft line cost bank capital (not sure how they account for it, but these lines may be drawn at any time at banks have to prepare for it) and capital is expensive right now. Why would barclays increase the overdraft line unless it is drawn down and hugely profitable. The only situation I can see that happening is that he is actively using the line, and actively having money (salary) coming in to repay the line and the bank is actively charging good rate of interest on it. Credit card companies used to do this as well - keep increasing credit limits as the limits were approached. Quote Link to comment Share on other sites More sharing options...
winkie Posted May 28, 2013 Share Posted May 28, 2013 I've had a £10K unsecured overdraft facility on my current account with Barclays for over twenty years. I can't remember when I last used it, but it remains the same, never increasing or reducing. You are an asset to them then. Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted May 28, 2013 Author Share Posted May 28, 2013 It is more likely than not that he is winding you up. Not a wind up, he is as shocked as I am. Quote Link to comment Share on other sites More sharing options...
Ah-so Posted May 28, 2013 Share Posted May 28, 2013 Not a wind up, he is as shocked as I am. It sounds like an offset account and they are effectively offering the chance to use the account to increase the mortgage. Quote Link to comment Share on other sites More sharing options...
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