MORTGAGE FINISHED TODAY BUT WHAT HAPPENS TO MORTGAGE RESERVE BALANCE?

talkmagic007

February 2021 my mortgage finished.
But there is a mortgage reserve balance of 30K to be paid.
Ive yet to ring Barclays as I'm one of these people that like to have as much info before they start telling me what to do.
Ive looked at personal loans calculator and can see that turning that into a personal loan is @ 7.5% over a 10 year period.

Has anyone had similar experiences on paying of the mortgage reserve

I haven't got 30K to repay it off.
Im 62 yrs old, on invalid benefit due to spinal problems (just letting you guys have all the info about me :-)

Thanking any ones advice in advance

getmore4less

Unless you had an offset mortgage that borrowing was at the very poor variable rate 3.59%. 

AS you will know it is a requirement of the mortgage to have also paid off the reserve as that forms part of the secured lending.

They had been sending regular letters about mine for years so it should not be a surprise.

Not sure how flexible they are on extending the term but something that should have been discussed before now.

I doubt the charge will be removed without coming to an agreement or you refinancing.

MWT

Generally there is no flexibility on extending the existence of the reserve account as it is just an approved overdraft on the mortgage account which has now ended.

So it needs to be paid now, and that could be by way of a new mortgage or some other form of loan, but keep in mind that there will be affordability tests on those loans.

Equity release is another possibility of course but that has its own criteria and suitability requirements as well.

I'm surprised that Barclays haven't been chasing this already though?

talkmagic007

Only received a letter from Barclays 4 days a go, saying "Mortgage has ended, thanks for the business, and how are  you going to pay the reserve balance?"

Petriix

A £30k mortgage over 15 years would be under £200 per month at current rates. There are a range of lenders who lend into retirement. You should speak to a broker ASAP.

getmore4less

Barclays have been all over their reserve borrowers for quite a few years in many cased removing or lowering the limit.

Be very surprised if that was your first letter for this mortgage I am a 2022 finish and have multiple letters back to at least 2016 if not before.

MWT

talkmagic007 said:

Only received a letter from Barclays 4 days a go, saying "Mortgage has ended, thanks for the business, and how are  you going to pay the reserve balance?"

They will have included reminders over recent years, along with other communications, that the reserve balance was payable at the end of the mortgage, so they are expecting you to pay now, not begin working out how to pay...

I'd strongly suggest talking to a mortgage broker to work out what your options are for a new mortgage and you need to do that straight away.

You may get a little grace from Barclays, but the interest rate may change as well as you are now probably outside their original terms.

If not a mortgage, have you spoken to anyone about a loan yet?

Rudi1990

My mum is also with Barclays and has the same type of mortgage, her mortgage is due to end in 2023 and she has already had several letters from Barclays and has plenty of time to consider her options going forward.

getmore4less

Rudi1990 said:

My mum is also with Barclays and has the same type of mortgage, her mortgage is due to end in 2023 and she has already had several letters from Barclays and has plenty of time to consider her options going forward.

If she is using the reserve and it is not an offset mortgage the interest rate  it is not the mortgage rate unless that has also lapsed to the current follow on SVR(3.59%)