Equity Transfer Process (Divorce)

dmt14

Following a recent divorce I started the equity transfer process today to remove my ex from the mortgage.

The current mortgage product is an offset with a reserve. The rate (for both) is 0.48% above base rate. Barclays are telling me that the process essentially needs to be an “internal re-mortgage”…..and they are telling me that offset with reserve accounts are no longer available. In order to pay the financial settlement to my ex I have used the mortgage reserve rather than re-mortgaging (since this was the cheapest way with the low interest rate). Barclays have today said that I cannot keep the mortgage product as it is and remove my ex-spouse (but need a new product(s)).

They have given me two options. (1) Keep an offset mortgage product for the entire amount (roughly £100k mortgage and £100k from the reserve) but with the c£200k at a new rate. (2) Keep the £100k mortgage on the 0.48% tracker and move the £100k reserve to a new mortgage account which will have a higher rate. I’m waiting to hear from them as to what these new interest rates would be.

Now I certainly don’t think this is fair (although don’t have original Ts&Cs to hand) but can they do this? If reserve accounts are no longer available due to the Mortgage Market Review a while back then I don’t mind losing the reserve, but I think I should be allowed to maintain the total £200k borrowing on the original terms (i.e. 0.48% over base). I appreciate what might seem fair isn’t always the reality but I’d welcome any thoughts on how to approach this. The divorce has been amicable and I want to sort this quickly to enable my ex to continue with the purchase of their new property (plus in the settlement I agreed to have this all resolved within 56 days)…..I’m not sure how long an appeals process with Barclays may take, and indeed any likelihood of success.

If I’m being cynical it does feel like they are taking an opportunity to move me to a product that will generate them more interest revenue.

Thank you.

dmt14

I’ve just heard back from Barclays re the rates they’re offering me. They are also wanting to charge me an application fee (up to £2k). Does this seem reasonable? In my view they are forcing me to move to a new product so the fee seems unreasonable. Thanks.