mortgage reserve account

corkey6458

I have a Woolwich mortgage with a reserve account. Can you tell me does the interest for money borrowed from the reseve get added to the original mortgage or does the reserve get reduced by the interest amount. Also I have funds in another bank if I transfer them into my Barclays saver pot which offsets against the reserve will Barlcays be able to take those funds to repay the reserve if they feel necessary or are they safe.
Any advice would be much appreciated.

mrmclark

Corkey

The reserve is a seperate account , bit like a current account with an overdraft. The limit is set by the bank , highest i think is 20000. Could be more. The interest rate at the moment is 6.6% and calculated as exactly the same as a morgatge. The only draw back is you need to make sure you pay , maybe set up a standing order.As you only pay interest on what you owe it makes sense.

Hope this helps

marthamoomoo

Hi,

Im new to this forum and could do with some advice. We have a Woolwich mortgage and were sent a Barclays card when we started. I have a personal reserve on this card that I have dipped into!! We now want to pay a chunk of the mortgage, will the fact I have used some of my 'personal reserve' affect my mortgage payments? Or is it a seperate thing? Any help would be great!

iblametheparents

marthamoomoo wrote: »

Hi,

Im new to this forum and could do with some advice. We have a Woolwich mortgage and were sent a Barclays card when we started. I have a personal reserve on this card that I have dipped into!! We now want to pay a chunk of the mortgage, will the fact I have used some of my 'personal reserve' affect my mortgage payments? Or is it a seperate thing? Any help would be great!

You won't have a Personal Reserve on the Mortgage Current Account, it will be what the op said.

marthamoomoo

What the op said? When my mortgage gets reviewed will the money I have spent from the reserve be taken into account? Or is it a seperate thing? Sorry, I'm confused.

samba

marthamoomoo wrote: »

What the op said? When my mortgage gets reviewed will the money I have spent from the reserve be taken into account? Or is it a seperate thing? Sorry, I'm confused.

I think what Kneale is trying to say is that your 'personal reserve' is in fact a 'Mortgage Reserve', like the original poster (op) was discussing.

If it is anything like mine then the interest rate on the reserve account is way more than the mortgage itself, thus you would do better to pay back the mortgage reserve first before paying off your mortgage. However, as far as I am aware, the only criteria with mortgage reserve is that you pay it back in full by the time you pay off your mortgage, so in answer to your question, no it won't affect your mortgage payments.

getmore4less

Barclays(woolwich) mortgages come with a reserve account, if it now a Barclays account this will be called
"MORTGAGE CURRENT ACCOUNT"
This will have an OD limit.
These do not have personal reserves.

If you have an offset mortgage this is just one of the accounts that is part of the offset pool, you get charged interest on the net borrowing after all the offset accounts are added up and this interest is added to the normal mortgage account.

With an offset mortgage the interest rate on any borrowing from this account are at the mortgage rate.

You can also put money into this account and that will be offset as well.
I am not sure if you can have DD but standing orders are possible.


IF you do not have an offset the interest charged on the OD reserve is most likely at the SVR(which it should say in the T&C) and not at any special fixed or tracker rate you may have. I do not know where the interest is charged in this case probably the connected mortgage account(anyone know for sure).

The size of this OD reserve is set at the time you take out the mortgage and any overpayments on the normal mortgage account increase the amount available on the OD, no limit as far as I know.

Personal reserve on a normal current account is something different and is charged at £22 for each 5 days it is used do not confuse the two.


Barclays can offset any saving against borrowings, BUT as long as you make the contractual payments this should not happen unless they go bust. If you have nomey earning less interest than the mortgage best to offset it.
REMEMBER you can offset cash ISA with Barclays so don't cash in ISA set up an ISA offset account(watch out for the ISA rules).

A barclaycard is a credit card and has nothing to do with the mortgage.

A barclays debit card is just a cash card on an account if you use the money(go OD or into a personal reserve) you get charged, so make sure you know what you are doing.

iblametheparents

getmore4less wrote: »

I am not sure if you can have DD but standing orders are possible.

You can have direct debits. Some customers use them as their main current account.