Barclays / Woolwich Mortgage reserve

boatman
boatman Posts: 4,699 Forumite
Name Dropper First Post First Anniversary
in Mortgages & endowments
There has been another round of letter trying to reduce the mortgage reserve amount. My mortgage dates back over 10 years, is there anything to stop them changing it? They are wanting to wipe off 10's of thousands and take it down to a few hundred. I may not use even a quarter of it in a few years to do some updating, but as it was part of the original deal I'm not happy to let it go, as you won't get it back.

Any thoughts?
«1345

Comments

  • muhandis
    muhandis Posts: 994 Forumite
    First Anniversary Name Dropper Combo Breaker First Post
    In the letter have they asked for your agreement to reduce the overpayment reserve or are they saying that they will do it by xxx date?

    If the former, do they say what will happen if you do not agree to this change?

    From a quick search on other forums, a couple of people appear to have ignored this letter resulting in Woolwich going ahead with the change anyway saying they never heard back from the customer.
    boatman wrote: »
    There has been another round of letter trying to reduce the mortgage reserve amount. My mortgage dates back over 10 years, is there anything to stop them changing it? They are wanting to wipe off 10's of thousands and take it down to a few hundred. I may not use even a quarter of it in a few years to do some updating, but as it was part of the original deal I'm not happy to let it go, as you won't get it back.

    Any thoughts?
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Name Dropper First Anniversary First Post I've helped Parliament
    They are getting tight on these reserves as they messed up the implementation so could come unstuck if people complain or get into trouble.

    Loads of letters to reduce the limits and warn you about paying it off before the mortgage term ends if you use it.

    In the past they have always given the option to ask to keep it but if you do nothing whatever is in the letter happens.

    PHONE them up and say you want to keep it and write a letter.

    We use ours as the mortgage is cheap and we get better interest elsewhere.
  • amnblog
    amnblog Posts: 12,433 Forumite
    First Anniversary Name Dropper Photogenic First Post
    We have not seen Barclays demanding immediate settlement. You should be able to repay any debt incurred on the reserve account under the original terms.

    Reducing an unused limit is a different issue.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Name Dropper Photogenic First Anniversary First Post
    Providing facilities costs lenders money. If facilities remain unused then on a commercial basis reducing them makes total sense. Suggest you request a reduction to a level that suits you.
  • boatman
    boatman Posts: 4,699 Forumite
    Name Dropper First Post First Anniversary
    edited 16 October 2016 at 4:15PM
    I contacted them but they still cut it by 95%, not what i wanted. Just think that regardless of your situation they want to cut it to the bone. They wanted to cut it to £1000. What right do they have to cut it given its a lifetime tracker, so no requirement to check your ability to pay during the term of the mortgage, never missed a payment. Do they have a right to insist on credit checks?
    Its based on your repayments already made, and the equity in your house. I would just sell they house at the end of the mortgage, so there are no concerns about not being able to pay as the mortgage is only 15% of the value.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Name Dropper Photogenic First Anniversary First Post
    boatman wrote: »
    Its based on your repayments already made, and the equity in your house. I would just sell they house at the end of the mortgage, so there are no concerns about not being able to pay as the mortgage is only 15% of the value.

    The reserve is an secured overdraft facility repayable on demand. Have you read your mortgage contract terms and conditions. Barclays is more than likely enforcing a clause within the contract.
  • boatman
    boatman Posts: 4,699 Forumite
    Name Dropper First Post First Anniversary
    Thrugelmir wrote: »
    The reserve is an secured overdraft facility repayable on demand. Have you read your mortgage contract terms and conditions. Barclays is more than likely enforcing a clause within the contract.
    Sadly not got it to hand, but have got it. As i said just wonder where they stand with regard to trying to push it. The fact that they have not withdrawn the reserve suggest they have to give you something..
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Name Dropper First Anniversary First Post I've helped Parliament
    Just tell them you want to keep it all or a level you are happy with

    So far that has not been a problem as far as I know for thoset hat have done that.

    The primary term is it must be repaid on the same term as the mortgage.


    ................
    There are a number of issues as there are no other payment terms so you have to plan as it will not be covered by the normal payment and interest accrues.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Name Dropper Photogenic First Anniversary First Post
    boatman wrote: »
    Sadly not got it to hand, but have got it. As i said just wonder where they stand with regard to trying to push it. The fact that they have not withdrawn the reserve suggest they have to give you something..

    Use the facility perhaps if you don't wish to lose it.
  • boatman
    boatman Posts: 4,699 Forumite
    Name Dropper First Post First Anniversary
    edited 16 October 2016 at 10:59PM
    Thrugelmir wrote: »
    Use the facility perhaps if you don't wish to lose it.

    Yes, I was using it, but not a lot. Obviously they would prefer to lend bigger amounts at a higher rate, they are not a charity. But it was part of the original deal, it may well have been over ten years ago, but they would be quick enough to say no if I decided to try and change the terms, on that basis alone they should not be allowed to withdraw it when they feel like it..
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.1K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.7K Spending & Discounts
  • 235.2K Work, Benefits & Business
  • 607.9K Mortgages, Homes & Bills
  • 173K Life & Family
  • 247.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards