Interest only mortgage rate ending.

moffat2000 · 11 April 2017 at 12:51PM

Hello everyone.

My 2 year fix with the Halifax is up at the end of the month. Before contacting them regarding a quote for a new deal I wanted some advice or thoughts from the forum.
My mortgage is interest only which is obviously a rarity in today's market. I have a savings plan in place, though it has fallen behind a fair bit.
Here's the question. Do we think Halifax is likely to try and get me onto a full repayment mortgage, or do we think they'll still offer part of all of the mortgage at interest only? If I could get a 50/50 split capital and interest it would take less of the sting out of my monthly budget. Do we think Halifax would offer such a thing?
Obviously I could just phone them and ask, or just sit on the SVR at interest only and overpay but I thought I'd put the question out there in case anyone has had a similar situation.
Thanks all.

kingstreet · 11 April 2017 at 12:57PM

Do you still have an A/- roll number or were you migrated to the 10/- system?

If you have the latter, you should be able to do an online product transfer without advice. Use the savings to overpay your mortgage so you have less to pay when the mortgage expires.

If you can't do this and invoke the advice process they will offer you a new product only if you agree to convert all or part to capital & interest repayment according to their affordability calculations.

moffat2000 · 11 April 2017 at 1:05PM

Thanks for the quick reply.
2 years ago I did the fix online without advise. This time round I can't because of I'm on interest only. So I guess they are cracking down so to speak. I would happily take a 50/50 split capital and interest only if it was offered. I should just take a deep breath and give them a call. &#55357;&#56883;

kingstreet · 11 April 2017 at 1:12PM

That doesn't make sense. Halifax told us no-one on IO should be able to do an execution-only product transfer as they wouldn't be migrated to the 10/- system until they had been "advised" about repayment methods.

If you were IO two years ago and had a A/- roll number, you should have needed human intervention.

Have you gone onto IO in that period?

moffat2000 · 11 April 2017 at 1:29PM

Took the mortgage out in Jan 2011 at IO. Had a 2 year fix, then left it on SVR until April 2015. I then fixed it for two years online. The only interaction I had was printing off a few forms to sign and sending them back.
My mortgage was an A/ but looking at my account now the reference is a 14 digit number starting with 10.

kingstreet · 11 April 2017 at 2:23PM

moffat2000 wrote: »

My mortgage was an A/ but looking at my account now the reference is a 14 digit number starting with 10.

So you should be able to do another online PT.

Have you tried?

If it asks for a roll number instead of an account number, take the two zeros off the end and key it as 10/12345678-9/ If that doesn't work, try adding a zero between the dash and the nine, so it would look like this 10/12345678-09.

See how you get on. It's worth a try if you could do it once before...

moffat2000 · 11 April 2017 at 5:40PM

Thanks for the advice. I tried to go through the online process like last time but, alas, I just keep getting a page telling me it's not possible to process online and to go to a branch or phone in.
It's a shame, it was so straightforward two years ago.

chris2304_2 · 11 April 2017 at 5:58PM

I've just been through this and it's a right royal PITA !

My 2 year fixed rate is up for renewal. The mortgage is interest only. I'm totally happy to keep the arrangement as it is and as the OP tried to do, I tried to switch online. Now, this is where the fun and games begin. If any part of your loan is interest only you can only do so via an advised process either in branch or over the phone.

Sooooo. After being on the phone for over TWO HOURS we get to the point where it is deemed my mortgage is unaffordable (according to Halifax) and doesn't meet current criteria blah blah etc etc... (I knew this at the outset and could have saved considerable time !) and the only thing they can do is switch me over to a 1.7% two year fix, interest only. Good, as that is exactly what I wanted.

Now, a couple of thoughts I had. They seemed very keen to try and establish a budget for making repayments even though I explicitly said that I was happy with my current arrangements and I'm not sure what the outcome would have been if I had been in a position to make overpayments, even against my wishes.

FCA Transitional arrangements say they don't have to make any affordability checks on an existing mortgage if you're not borrowing more or changing the term so Halifax are out of order in my view insisting on the TWO HOUR torture !

My property is worth much more than the mortgage amount and I'm planning on downsizing when my daughter leaves home. Seems sensible too me but not to Halifax. "Can't use sale of mortgaged property to repay" Cobblers !

Just one more thought. Even if you are a mortgage prisoner you cannot be treated differently to any other borrower according to the FCA, so if other customers (that do fit current criteria) are allowed product transfers then so are the prisoners. It goes against every principle in the FCA handbook to turn around to a borrower and leave them on the SVR when cheaper product transfers are available.

kingstreet · 11 April 2017 at 6:04PM

They seemed keen to reach a budget then they would ask you to change to part-repayment part interest-only and grant you the product transfer.

The transitional rules you refer to were the October 2012 rules introduced by the FSA not the FCA and were superceded by MMR and EMCD.

The only way such cases are being resolved is by individual action between borrower, lender and FOS.

chris2304_2 · 11 April 2017 at 6:09PM

Hi Kingstreet

What I was interested in was ........... say I WAS in a position to switch to repayment, could they insist I do so ? My contract at inception was interest only. And if I refused to do so would the SVR be the only option, because if it was, that is blatantly ripping people off.

kingstreet · 11 April 2017 at 6:16PM

They can't insist you change to repayment, but they can refuse to allow a product transfer if you don't.

Then we end up with the recent Bank Of Scotland case where the borrower was compensated for not being able to effect a product transfer.

I'm sure this is fluid and subject to change and no-one really knows how it will end at this time.

Interest only mortgage rate ending.

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