Barclays Offset mortgage customers – TAKE HEED!

Hi new to this but found this forum after searching on Woolwich offset mortgage. I have had this for years but never used the reserve have just seen a property I'm thinking of buying and went in to branch to find out how to access the reserve. They asked if I had received a letter which I don't think I have and on checking my May statement the reserve is still listed. I'm planning on moving the balance of my current account and writing myself a cheque for most of the reserve - should I be expecting any problems from this?

For my account the changes came about on 19th May so you may already have lost the reserve.
It's not really your money anyway as it's part of the mortgage borrowing but if you are on a low fixed rate it's cheap money if you need it. Mine was at about 1% above base so it was worth it.

Hi yes the rate is 1.45% so worth using it rather than arranging other borrowing! I hope the chance hasn't gone but knowing my luck......

The answer to these problems is to pull out all the cheap loan facilities you can from these Barclays facilities and use as suggested the account as a feeder account and keep ALL the cheap loan monies in an institution nothing to do with Barclays........................do NOT trust Barclays!!!!
Nobody should trust what a bank advises them............................period!
As the money is so cheap you would probably be in a cost neutral position.
It is always useful to have a facility irrespective of whether you intend to use it.
AQs it is so cheap it is worth using it all and sticking in a savings account nothing to do with Barclays.
The idea is you are in control of liquidity previously offered to you; so take it as you won't be offered it in future if it is removed from you now.

God, how I wished I'd found this site a couple of weeks ago. I have an offset mortgage, and after 10 years of diligently paying off the mortgage, I used all the accrued reserve against a new property in December last year. I finally got the letter (though not for a while since they sent it to the wrong address) and I have to confess I assumed that they meant the reserve limit would no longer go up, as it had done every month, as the mortgage went down. What it turned out they meant was that from the day in question, my overdraft, now about £80K (effectively a second mortgage) would be frozen at that amount. So, the £20K or so cushion I had to accommodate Tax bills, home improvements, other large ad hoc expenditures, was no longer available. Worse than that, from that day, everything I spent was effectively unauthorised borrowing, which meant that they bounced a cheque for £13, returned a Life Insurance policy payment of £19, and charged me fees for several other small items. There is simply no way I could have avoided these, in the few days until my salary was paid in. I can't bear to think the mess I would have been in if the day in question had fallen after payday. I would be in unauthorised overdraft mode for the rest of my life.

Not only have I always overpaid my mortgage, but they scrutinised my financial situation in the weeks before the draw down in order to let me have another mortgage. They know I am not at risk.

The woman on the phone who was rude and uncompromising stated that I would have to rely on a further advance, ie I swap my largely unused cushion of £20K on which I pay no interest because I don't use it, and 1.25% when I do, for a loan on which I would pay a rate of 5% whether I use it or not. She calls this "responsible lending". This is sophisticated, duplicitous lending, but responsible it certainly isn't.

Am kicking myself that I didn't investigate their letter more but it's not at all clear, doesn't give examples of the impact, and is plainly intended to catch us out, raise charges, reduce availability of these low rate loans, but without exciting the press in the way the Irish banks have.

I am intending to complain and complain to this untrustworthy bank. Anyone want to join me?

It is easy to understand why anyone with a cheap loan facility should use it as it will be removed from you.
The reason is the same as why credit card limits are reduced or shut down.
Every credit limit of whatever type has to be facilitated by the banks.
The banks have to borrow the money on the money markets to enable the facility to be used.
Banks can drastically reduce their exposure to having to source funds for borrowers', credit limits by reducing or removing unused facilities irrespective of whether the borrower might be planning to use the facility at some later stage.
Therefore my advice remains the same; borrow all your cheap loan facilities from wherever they come from and stick them in a savings account nothing to do with the bank you have borrowed from.
This then gives you access to the cheap loan facilities; the cost of retaining the facilities will be just about cost neutral; but I would suggest it is worth paying a interest charge just to keep the facilities available.
Credit gives you buying power which in this game is what is required and yet is so hard to obtain.
Don't throw your loan facilities way because you haven't used them; cos if you don't use them to the max the banks will remove those facilities from you.

Update.

Phoned up wanting a row about refused direct debit and sandwich - unfortunately response was "Sorry, our mistake, charge deducted"

Bu**er. - shouting's so much fun!

To be fair they were contrite and immediately put it right and I'm impressed (but I'm going to keep the cheap money somewhere out of their reach).

Barclays have acted disgustingly over this one. There are probably thousands of their loyal customers out there that haven't yet realised that they've been stabbed in the back by their bank. I took out my Woolwich offset 11 years ago, but then 're-mortgaged' 7 years ago in order to release extra equity and buy a 2nd property. I had many many conversations with Barclay's mortgage advisors at the time about different products. They advised me to take out another flexible offset mortgage and guaranteed that I'd always be able to borrow back up to the original limit via the overdraft facility. So for 7 years that's just what I've done, effectively treating the mortgage like an interest only mortgage, whilst building up enough equity in other properties to eventually pay Barclays off in 13 years time. Over the past few months I've transferred funds into the offset current account in order to leave enough of an overdraft facility to pay several mortgages plus tax bills etc. I received no letter of warning that Barclays intended to change anything. At the end of May I went to pay almost £20k in bills, only to find that my facility had been reduced down to my existing borrowing... so Barclays had effectively 'stolen' the money that I'd transferred in. I spent several hours on the phone to the Barclays mortgage team, and to the 'Reserve Team' that you get transferred to if you argue enough. The result though was point blank refusal to return my available funds to their previous level or to re-enable the mechanism that increased the overdraft facility each month. All were sympathetic, and nobody countered any of my arguments. They all just towed the line that they aren't allowed to act against a 'policy decision', even though several did apparently try to convince their managers to allow them to do so.

I'm not sure what to do now, though I will continue to complain to Barclays, and to the FCA, if that's the right body. I've been a Barclays customer for 30 years. I don't feel like I deserve to have my family home, my business, my credit rating, my children's futures and much more ripped from beneath me like this!

So far, all Barclays have agreed to do was to send me a copy of my original mortgage terms, so that I could see they had acted within the small print. After more than a week, an envelope arrived with a complements slip saying 'please find enclosed a copy of your mortgage terms'.... but there was nothing in the envelope except the slip! Perhaps that's Barclays way of telling me that they think they have a blank cheque to do whatever they like :/

New BTL offset mortgage accounts are still available ... albeit currently from only one lender (which has quite stringent criteria!), however for those that qualify and want to 'earn' over 5% 'interest' on their savings pots, and (importantly) who can manage this specific mortgage/savings strategy in the way it should be, then I suggest speak to a Broker and check your eligibility and take advantage whilst you can.

Products like this aren't suitable for all and this particular product is aimed at the 'small portfolio' landlord, but for landlords who can use a strategy like this, rather than keeping rental income and maintenance in low interest bearing bank accounts, this is still a winner.

Offset mortgages have their fans and detractors but surely it's good that they're still available (even if in limited supply) to offer choice in the BTL mortgage marketplace.

an update on this thread -
Barclays are still at it. I have received notice that they are absorbing the excess on my mortgage reserve account, when I phoned up to ask what would happen if I drew down the funds in the intervening period I was told - on the date the change is due to take place, they would add up all funds in my offset accounts and reduce the reserve by that amount!
In other words any money leaving my accounts after this date will be unauthorised borrowing (no doubt incurring fees) and that the reserve would be "regularly reviewed" - in other words every time I put money in to an offset account with Barclays they will reduce the mortgage reserve by the amount in my offset accounts (effectively stealing money from my offset accounts to repay their mortgage).
I phoned up and explained to my Barclays personal manager that this is forcing barclays clients to move all their funds to alternative banks and stop banking with them. She came back to me with a "yes but there is nothing we can do about it - you can always apply for a new Mortgage".
I have been a barclays customer for nearly 40 years (never even late on a payment in all that time)!
Barclays clearly has no trust for, and does not want a good relationship with even its best clients.
I would advise anyone with a Barclays/Woolwich offset Mortgage with reserve facility to withdraw all your funds and do your banking with another organisation not linked to Barclays.
This is not banking - it is utter madness!