Using Mortgage Reserve Account

shancarnan

I have been trying to get additional borrowing on my mortgage to pay off credit cards and to make some home improvements but I have not had much luck with my mortgage advisor. I do not fully understand the reserve account and I am trying to work out if it would be better to use that to pay off my credit cards and then use the money that I pay each month to credit cards to get that paid off?

getmore4less

who is the mortgage with?

shancarnan

Woolwich/Barclays

LeeSouthEast

The simple question is a comparison of rates I guess.

If your credit cards are averaging 20%, and your Reserve allows borrowing at your mortgage rate, it's a no brainer?

VIGILANT22

Refer to yr paperwork, that will tell you how much you have in reserve

getmore4less

Did you organise a reserve when you took out the mortgage?
Barclays/Woolwich reserve "store" overpayments so you can build up a reserve even if you don't have one initialy.

It works like a current account ours came with a cheque book even though it was zero when we took out the mortgage.

The account should now probably be a "mortgage current account" and you can see the size of the reserve on-line and do on-line transfers.

Normaly the rate is SVR unless you have an offset mortgage then it should be the mortgage rate.

All in the T&C's that came when you took out the loan.

If you did not have a reserve at the begining or overpay then you will be looking at additional borrowing to set up a reserve.