An 88-year-old widow faces having to repay £165,000 on a bank loan of £16,250 taken out by her late husband in the 1990s.

Beryl Hutchinson said she only became aware of the deal, called a shared appreciation mortgage, after her husband, Barry, died last year.

The interest-free loan was secured against any future increase in the value of couple’s bungalow.

The bank now stands to take 75% of the property’s appreciation if it is sold.

Hutchinson, from Eastwood, Nottinghamshire, and her son Steve, are now concerned she could lose the home which they were considering selling to help pay for care if she needs it in the future.

She believes her husband, a former miner, did not fully understand the implications of the shared appreciation mortgage when he agreed to the terms.

Barclays declined to comment on her situation, but insisted the terms of shared appreciation mortgages were fully explained to all customers before they were agreed.

Hutchinson told BBC’s You and Yours her husband had not discussed the loan, taken to pay for a new car and home improvements, with her at the time and thought only the original £16,250 would finally need to be paid back.

She said: “I was horrified to think a bank could take 75%. We could end up with no house.”

Mr Hutchinson, 85, told his son about the loan as his health deteriorated before his death.

Steve said: “My dad wasn’t unintelligent, but he asked me to look into it before he died. He thought he just had to pay the loan with a bit of interest.

“He was an ex miner, and doing odd jobs. At the time he had no regular income, other than pensions, so he thought he wouldn’t get a proper loan.

“My mum signed all the paperwork as my dad asked her to. She didn’t think about it.

“He signed it thinking he didn’t have to repay the capital until such a time when you sell and they calculate the interest based on a formula using the house’s value.”

Steve added: “I tried talking to Barclays about this this but they’re really unhelpful.

“I got a hypothetical valuation based on what we think the house worth right now and the amount owed to Barclays is £165,000.

“But if the house sells for £250,000, Barclays would take £150,000 and we’d have to repay the original loan.”

He said he investigated legal action to challenge Barclays but was told it could cost up to £25,000.

“We haven’t got that kind of money,” he said.

“We just feel powerless. I don’t know what we will do. Mum is frail and has a flu.

“I’m worried that if she has to go in a care home, we won’t be able to pay for it because of this loan.”

He said he hoped to join a collective legal action with other people affected by shared appreciation mortgages after Barclays previously settled a group litigation, involving 60 customers, out of court.

Only Barclays and Bank of Scotland ever offered such deals.

They are no longer sold but the FT estimated around 15,000 were agreed between 1996 and 1998.

A Barclays spokesperson said: “Before a shared appreciation mortgage was completed and the funds were released, customers were required to seek independent legal advice and confirmation was obtained from the customers’ solicitors that the terms of the legal charge and mortgage conditions had been fully explained to them.

“This was done to ensure customers fully understood the nature of their borrowing. The product literature also encouraged anyone interested in a shared appreciation mortgage to discuss their intended borrowing with their family.”