to not have understood this about my offset mortgage?

[onesteptwostep]

Well over a decade ago I took out a 25year offset mortgage with my ExP. This was when offsets were a new product and there were only a couple of lenders offering them. It was all done online/ by phone, seemed v new and innovative etc.

We then needed to increase our borrowing to pay for works to the house. With the offset we could use our 'reserve', and basically borrow more money (I think up to about 30k more, though as you pay more off the sum increased).

Anyway basically as the mortgage amount went down, our linked current account went into debt (because of the increased borrowing). My Exp then ran up further huge debts on the account, which led to us splitting up. It ended up we owed about 80k on the mortgage, and were overdrawn about the same amount.

When we split, I was told to freeze the current account to stop him spending from it. I had to open a new account for my wages etc, and then had a standing order to pay the mortgage.

I work hard and am lucky to earn a good salary. By last year, I'd got the mortgage down to a few £100. So I contacted the provider, and said was it ok basically not to pay it (I remembered someone telling me it was better to have a small mortgage balance) and put the same amount into the linked current account, to reduce that? Yes, that was fine, as I owed less than 1 months repayment they wouldn't worry about it, as could see money still going in etc. So I've carried on, and now I owe about £65k only. So far, so good.

Years ago, as well as the mortgage and the current account, my Exp and I also used to have saving accounts linked to our mortgage...these and the current account are meant to reduce interest etc. I'd forgotten about this, but as I have some other savings with a different bank,thought I might find out if I could move it and link to my mortgage. So I gave them a call.

The call didn't quite go as expected. Firstly no one understood about these saving pots (they suggested I go to my branch. Problem is I've never had a designated branch and on the phone they therefore couldn't tell me which one to go to) but worse still I was told I was classed as a bad debtor, and I have 18 months to repay everything I owe

This is because of overpaying the mortgage. I remember exp and I getting yearly letters saying effectively well done, if you carry on you will pay your mortgage off in another X years...etc.

Apparently every time we overpaid we were compulsorily reducing our term. I don't think this was ever made clear. Maybe I'm thick?

But I also don't get why I've never had any letters re the term for at least the last 5 years (the last letter they sent me on their system was in 2009!) or why when I called last year it wasn't mentioned?

Their attitude was well you know now, you should have known already, hard luck. Oh and make sure you pay up your £65k!

So is it all my fault for being stupid?

We have one of these type of mortgages, but not - thankfully - with Woolwich/Barclays.
I am confused about how the debt arose on the current account. Any additional borrowing we have taken has been added t the debt on the mortgage account. We have been over paying for a number of years as we have a) an Endowment policy to repay part of the mortgage which will nt pay out as much as originally anticipated b) interest rates have dropped since we took the mortgage out so we carried on making repayments at the higher amount and c) we have increased payments to the mortgage account by an amount decided by us when we have taken extra borrowing. In spite of all this, the actual date we need to pay the mortgage by remains unchanged ie it coincides with DHs 65th birthday. The only thing that changes as the years pass is the 'limit' of extra funds that we could borrow - as the time available to repay it obviously reduces as time passes.

We get 1/4ly statements showing the balance and informing us how much we have saved by offsetting - as we also have a savings account linked in with the current a/c and mortgage. Any credit balances on current/savings account offset the interest on the mortgage. We have a separate overdraft limit on the current account which we don't use but that is charged at a different interest rate to the mortgage if we used it. We also get an annual letter telling us what the available borrowing limit has been reduced to.

OP clearly the Woolwich/Barclays product is more complex than the one we have. You need to dig out all the original agreement forms, any statements you have plus request copy statements that are missing and take all of this to an IFA as others have suggested. Failing that, you could write to Paul Lewis who does the Moneybox programme for the BBC - he may be able to shed some light on the Barclays/Woolwich product for you and may even take up your case if he feels they are being unreasonable.

I have the same mortgage. I think as an offset, the term does not carry the same meaning as a repayment mortgage. For repayment mortgage, when you overpay, you can choose to use that money to reduce the term of the mortgage so you paid it off earlier.

For offset, you need to finish paying at the end of the term but there are lots of flexibility until that happens. I imagine in the bank's position you owe them £65k with your house as collateral no matter which account it shows up on.

Your term reduced because time has passed instead of however much you paid I think?

Apologise in advance if I have misunderstood the situation.....

This sounds v complex.

All I can help you with is to say we have an offset mortgage and when we took it out, we were asked whether we wanted overpayments to reduce the term of the mortgage, or to keep the term the same and reduce the monthly payments. Is it possible you ticked the wrong box there?

But we've never been overdrawn on the linked current a/c, I'm not sure how that would even be possible..?

If you're in NI I can recommend a good financial adviser but I guess you're England?

I have re read the post and indeed my previous post were not relevant. Sorry! The only reason I can imagine is that there maybe a limit on how much you can have left in your mortgage at certain times during the 25 year term and 65k is too much to be owing soon?

The situation is clearly more complicated than I can comprehend and I feel for you OP. Hope you can find a good IFA to help.

The issue of the term changing due to overpayments certainly isn't universal to all mortgages. We have a mortgage with HSBC, not a flexible one though. We have just made an overpayment and when I asked about the term, it remains the same, though we will be able to pay it off quicker, the official term of the agreement doesn't change.

It sounds like you need to remortgage, but first you will need to sort out getting your ex off everything.

Seek advice as soon as you can.
Not surprised when you rang up the staff didn't know what you were on about, not their fault.(if they were like my old work)
I worked for a different bank and only a specialised group dealt with the offset mortgages.
Even people who had the collections number we'd have to find a someone free or arrange a call back as we had no access to their accounts or any training.
Some didn't even know about offset because they didn't have anything to do with them.
Were you never told when you took out the mortgage about making over payments?
not sure about barclays mortgages, but did they say you could only make a certain number of overpayments a year before it reduced your term?
Not sure why the guy you spoke to last year would say anything to you.
Tbf i'd get out your contract/any paperwork you have as i'm certain this will be in here.
( not that i dont have sympathy i would be bricking it if i were in your shoes)
Why did ypu never request a statement?
Is your exhusband going to be able to pay anything as you are both linked to the mortgage and account.

I've already paid off about £15k on the current account, I am paying this by having switched what I was paying off the mortgage from the mortgage account to the current account.

I knew the term had reduced. I'm happy for it to have reduced, just not to 2 years remaining (that will take us to approx 15 years and 2 months from when we took out the mortgage).

The last letter received 8 years ago said if we continued to overpay, we'd pay off our debt about 5-6 years early (after about 19-20 years) But that would still be another 5 years or more from now. And I assumed they were including the current account/ reserve in that. I'd never had anything saying it would be less time than that. When we took put the mortgage we were told we could pay as much or little as we wanted each month, take payment holidays etc. Although that subsequently turned out to be incorrect and we were then told we had to pay the minimum every month and should just run up a debt on the current account.

This is why I couldn't just spend the last few years paying off the current account, because I had to keep paying the £850 minimum on the mortgage. Like I said above, I could have split it. But from what I was told on the phone I might still only have had the same amount of term remaining due to the overpayment I'd already made!

Ex and I own as tenants in common. We've agreed a sum I will pay him, but at the time we split I couldn't afford to remortgage for a sum big enough to cover that and what I owed. If I remortgage now, I can,however that is subject to his agreement and I doubt he will agree. I know he won't pay anything in the current situation (my house, my problem).

I'm sorry this is all so crap for you. Have you managed to speak to someone else about this yet? Like, an IFA/solicitor?

I don't know anything about this but could the mortgage be increased again as you have been overpaying, and use that to pay the current account off?

I think you need to see a solicitor as well as an independent financial advisor.

As a layperson, I do not understand any of this. I like to think I'm of average intelligence so no, you're not thick (or that means I am and I don't like that thought!).

You should contact the FCA. They are very helpful and will help you navigate your lender's complaints procedure. I think you have a strong case - it doesn't sound as though the terms of the product were made clear enough to you. Good luck.