Widow, 90, slapped with £177k repayment on £22k mortgage as Barclays DEFENDS 690 per cent mark up
Huge sum means frail pensioner may never be able to downsize from large family home
A FRAIL 90-year-old widow has been slapped with a £177,750 bill to pay off her Barclays mortgage - which was worth just £22,500 when it was taken out in 1989.
The astronomical sum will be due if she decides to downsize from her three-bedroom home - with Barclays set to make a 690 per cent profit if she does.
The pensioner, known only as Mrs T, is living alone after losing her beloved husband last year,
The elderly widow lives in a large semi-detached family home, and it is now unlikely she will ever be able to downsize.
Mr and Mrs T were one of thousands of couple who took on a "shared appreciation mortgage" in the 1980s.
No interest is charged on the mortgage but the lenders gets a percentage of any future increase in value of the home.
Shared appreciation mortgages are no longer available, but tens of thousands of homeowners are still tethered to them.
Mr and Mrs T signed away a 69 per cent share of any increase in value of their family home.
When the loan was taken out the couple's house was valued at £95,000 but it is now worth £320,000.
Barclays' share of the uplift stands at roughly £155,250, which when added to the loan value of £22,500 is £177,750.
Barclays has insisted the contract stands because the product was not mis-sold.
They added borrowers had to get independent legal advice before taking the mortgage out.
What is a shared appreciation mortgage and how do they work?
Shared appreciation mortgages were introduced in the 1980s and tens of thousands of couples are still paying them off.
Bank of Scotland and Barclays both offered homeowners the choice of releasing a cash sum worth up to 25 per cent of the value of their home interest-free. However, there was a catch, as when the house was sold the loan would have to be repaid, plus 75 per cent of any increase in the property's value.
Banks claim they were totally unaware house prices would soar so dramatically.
Since Mr and Mrs T took out their mortgage in 1989 house prices have risen by 232 per cent - hence the reason Mrs T will have to pay such a massive figure if she wants to move out.
In relation to Mrs T's case they said: "Barclays took extensive legal advice and counsel relating to all aspects of the shared appreciation mortgage scheme, including the contents of the brochure and promoting it.
He said: "My blood ran cold when I found out.
"I can't deny they signed the contract but I know that my mum had no idea what she was signing, and my dad would be horrified if he'd lived to see my mum forced to pay this amount of money.
He added: "I'm really worried that she isn't going to be left with enough to live on when she sells. She's going to have to downsize at some point but the cash left over once she's paid off Barclays isn't going to buy her another home mortgage-free. She's 90 - if Barclays hold her to this, it's just horrifying."
"My parents had no idea what they were signing with Barclays - they told me at the time they'd taken a bit out of the house just to have some cash, but not to worry as there'd be plenty left over for me and my sister."
Mrs T's late husband was a decorated war hero for his service on Russian convoys in WWII.
He worked as a warehouse operator for the Radio Times, and had his pension raided by Robert Maxwell.
The media tycoon took millions from his own companies' pension funds.
Mr T's son added: "My dad was worried about money because he'd lost his pension to Robert Maxwell and it was in his local Barclays branch that one of the clerks told him about the loan - he would never have known about it had the guy not put the idea in his head.
"And even worse, my parents didn't even spend the money they took out - they just wanted if there for peace of mind."