Barclays/Woolwich Mortgage Reserve Withdrawal

ferraris

We took our fixed rate mortgage out with the Woolwich, which then became Barclays, about 6 years ago. It came with a Mortgage Reserve which was an approved overdraft calculated as the difference between the value of the house and the outstanding mortgage balance so the facility increased as the mortgage balance reduces.

It was listed as an additional feature of the mortgage and it was something we used once before to buy a car and tide us over until we'd got the funds together to repay it.

Barclays have written to us to say they are withdrawing it because they are "responsibile lenders". It was something I could see us using again so are they within their rights to withdraw something that was part of the original offer (listed in the Key Facts document)?

If nothing else it could be an opportunity to move to a lower rate deal because they'd materially changed the terms, but again i'm not sure this would apply and the mortgage conditions aren't clear.

bigadaj

Contractually they should be only able to change terms with your agreement, however their justification might be that it is also in your interest.

As you say I would be tempted to use this as leverage to get a better deal, if you don't try you don't get.

shaniannie

We got that letter yesterday too, although we've never actually used the reserve.

They don't say that they're taking it away altogether, what they're saying is:

"From 19 May 2013 your Mortgage Reserve Limit will no longer increase as your mortgage balance decreases".

SR1

I got the letter too but already knew as I am hoping to move and have applied to port my mortgage. I have to pay back any overdraft outstanding on redemption. Yet in another letter it says I can re apply for the overdraft after porting.