Mortgage reserve advice please

neenmarie

Hi

We have a tracker mortgage with woolwich/barclays and our interest rate is 0.79%. We have also a mortgage reserve which has a maxium limit of £20,000. I am really confused with the mortgage reserve as our statements sayes that the interest on this is 0.42% but when I have phoned Barclays they say its 4.99%. When I look at the website regarding the reserve it sayes ;-

The mortgage reserve is always equal to the orginal difference between your mortgage and 90% of the value of your home. As you pay off the mortgage your mortgage reserve limit will increase.

I have called barclays a few times and one said it runs line with the mortgage and others say its 4.99%? When talking to them they also say that to increase the limit we need to call and have an hour application over the phone but we have already drawn on £10,000 and the limit has increased automatically. We are hoping to draw another £10,000 but might think twice if the interest is 4.99%. Can anyone shed any light on the reserve for me?

I really don't know if barclays knows too much about our mortgage as it use to be woolwich. They are also saying we owe £41.26 on the mortgage but i have called the call centre and my branch and they can't tell me what it is for or where from? We have always paid our mortgage on time and paid the full amount, in fact at the beginning my husband was over paying?

I'm so confused with it all as I have so many people telling me different things????
Thanks

getmore4less

Barclays/woolwich reserve account.

This is my understanding from the T&C and booklets I have

For trackers this can be one of two rates.

For offset mortgages it forms part of the pool so is at the offset mortgage rate.

For all other mortgages it is at SVR unless there is something in the T&C that says otherwise.

Check you mortgage T&C carefully some came with a "convert to offset" option for a small fee and a small increase in mortgage rate.

You may find this is a better option that drawing down the reserve on SVR.

Also check for your reserve conditions

Mortgage overpayment add to the reserve limit so if you have drawn down the reserve DO NOT overpay the mortgage pay off the reserve first because it is at a higher rate.


I think for non offset mortgages they trimmed back a lot of peoples reserves so it may not be 90% any more