How does a Mortgage Reserve work?
A Mortgage Reserve is a secured overdraft facility on a Mortgage Current Account, where you borrow against the equity in your home. The Mortgage Current Account operates like a normal current account. You receive a chequebook, debit card and will also be able to set up standing orders and Direct Debits.
Mortgage Reserves are no longer available for new mortgage applications, although a number of existing customers will have a Mortgage Reserve as a part of their Mortgage Current Account. This Reserve must be repaid by the end of the mortgage term. A charge over your property will have been required as security.
For Woolwich flexible mortgages, interest is charged on a Mortgage Current Account at the Bank of England Base Rate + 4.49%, except for Offset mortgages, where interest is charged at the Offset mortgage rate. For Offset mortgages only, interest due on a Mortgage Current Account is charged to the Main Mortgage account (for interest calculation purposes).
All borrowing on a Mortgage Reserve is on an interest-only basis. You can make payments to reduce the capital amount outstanding on your Mortgage Reserve at any time.
Find out more about Mortgage Reserve.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP YOUR REPAYMENTS ON YOUR MORTGAGE.