Woolwich mortgage compulsory account?

moike

My ex wife is just arranging a mortgage such that she can buy me out of the place we have now, she ended up with a woolwich 10 year fixed rate deal which she arranged thru one of the local estate agent chaps (MrX), she's been 'sorting' it now for about 3 weeks, there was some paperwork etc she had to find but that's all done now.
She came home today to say that that MrX has told her that she needs to open an 'account' with the woolwich even if she has no intention to use it, (she wasn't quite sure what kind of account) is this true? he has told her that the application will have to be sent to her, is this just another slice of commission for MrX?
Thanks in advance
Regards

Joyful

I had to do this when I remortgaged so got all the paperwork through. As I've no intention of using it it's filed away.

manicmum_2

Hi
We are also in process of remortgaging with the woolwich and also have to open an account.

koexelek

You always have to open one, but you don't have to use it.

A toatally pointless red tape exercise on behalf of the Woolwich/ Barclays, if you ask me

getmore4less

It will probably be the mortgage reserve current account.

Not 100% sure about the following because we have a full offset.

I think one use for them is to set up a mini self managed offset arrangement by splitting the mortgge into two parts, regular and reserve, which is like a big approved overraft that you draw down immediately.

You can then repay it and redraw it when you want.

Ian_Griffiths_Halifax

I think it's a ploy by Woolwich/Barclays to get an Account opened with every mortgage so that they can add all these unused Bank Accounts to all the working Bank Accounts taken out in the normal way.

While some people do actually go on to use them and there is the Offset benefits of doing so, I think they are just building up to eventually say 'We have x number of bank accounts, all these people can't be wrong'. A marketing ploy to get more bank accounts in the future I recon.

Jaycee1972

I have just applied for a Woolwich mortgage and my broker said the same "It is just a current account and you don't have to use it".

Wondering what the interest rates are like. I am currently with the Nationwide (who wouldn't give me a mortgage boo hiss)!

Jane

chivers1977

It is the Mortgage Current Account which is required to be opened even if you don't want or are declined for the reserve failicity( secured OD). Debit interest on a reserve if you have offset is charged at the mortgage rate and applied to the mortgage. Debit interest on a reserve if you have a lifetime tracker or fixed rate is charged at Standard Variable Rate 7.14% at the mo and applied to the MCA itself. Credit interest if you do not have offset is nothing to shout about.

HTH