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    • moffat2000
    • By moffat2000 11th Apr 17, 12:51 PM
    • 13Posts
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    moffat2000
    Interest only mortgage rate ending.
    • #1
    • 11th Apr 17, 12:51 PM
    Interest only mortgage rate ending. 11th Apr 17 at 12:51 PM
    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.
Page 1
    • kingstreet
    • By kingstreet 11th Apr 17, 12:57 PM
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    kingstreet
    • #2
    • 11th Apr 17, 12:57 PM
    • #2
    • 11th Apr 17, 12:57 PM
    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.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • moffat2000
    • By moffat2000 11th Apr 17, 1:05 PM
    • 13 Posts
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    moffat2000
    • #3
    • 11th Apr 17, 1:05 PM
    • #3
    • 11th Apr 17, 1:05 PM
    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. ��
    • kingstreet
    • By kingstreet 11th Apr 17, 1:12 PM
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    kingstreet
    • #4
    • 11th Apr 17, 1:12 PM
    • #4
    • 11th Apr 17, 1:12 PM
    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?
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • moffat2000
    • By moffat2000 11th Apr 17, 1:29 PM
    • 13 Posts
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    moffat2000
    • #5
    • 11th Apr 17, 1:29 PM
    • #5
    • 11th Apr 17, 1:29 PM
    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
    • By kingstreet 11th Apr 17, 2:23 PM
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    kingstreet
    • #6
    • 11th Apr 17, 2:23 PM
    • #6
    • 11th Apr 17, 2:23 PM
    My mortgage was an A/ but looking at my account now the reference is a 14 digit number starting with 10.
    Originally posted by moffat2000
    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...
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • moffat2000
    • By moffat2000 11th Apr 17, 5:40 PM
    • 13 Posts
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    moffat2000
    • #7
    • 11th Apr 17, 5:40 PM
    • #7
    • 11th Apr 17, 5:40 PM
    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
    • By chris2304 11th Apr 17, 5:58 PM
    • 4 Posts
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    chris2304
    • #8
    • 11th Apr 17, 5:58 PM
    • #8
    • 11th Apr 17, 5:58 PM
    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
    • By kingstreet 11th Apr 17, 6:04 PM
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    kingstreet
    • #9
    • 11th Apr 17, 6:04 PM
    • #9
    • 11th Apr 17, 6:04 PM
    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.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • chris2304
    • By chris2304 11th Apr 17, 6:09 PM
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    chris2304
    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
    • By kingstreet 11th Apr 17, 6:16 PM
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    kingstreet
    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.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • chris2304
    • By chris2304 11th Apr 17, 6:26 PM
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    chris2304
    Thanks

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

    Seems like complaints waiting to happen ! I certainly would. How can it be justified to keep you on a higher rate if your mortgage is deemed "unaffordable" while lower rates and payments are available.

    It's strange. I've always loved my interest only mortgage as it serves me way better than a repayment (although I realise i'm lucky in that I could sell up tomorrow and repay the loan AND downsize) But Halifax see me as some sort of pariah with a toxic product who needs lecturing every two years it seems now.
    • Thrugelmir
    • By Thrugelmir 11th Apr 17, 6:51 PM
    • 52,932 Posts
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    Thrugelmir
    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 !
    Originally posted by chris2304
    While they don't have. Lenders can. Quoting the FCA at them is therefore pointless.
    “ “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” Sir John Marks Templeton
    • Thrugelmir
    • By Thrugelmir 11th Apr 17, 6:52 PM
    • 52,932 Posts
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    Thrugelmir
    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?
    Originally posted by moffat2000
    Would extending the term make it easier. Only if it's an option of course.
    “ “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” Sir John Marks Templeton
    • glosoli
    • By glosoli 11th Apr 17, 7:56 PM
    • 321 Posts
    • 159 Thanks
    glosoli
    If they make their recommendation for you to switch onto Capital and Interest, wouldn't you just be able to reject their advice and self select your own interest only product and lose the protection of an advised mortgage?
    • chris2304
    • By chris2304 11th Apr 17, 8:47 PM
    • 4 Posts
    • 0 Thanks
    chris2304
    I think that was the question I was asking glosoli which you managed to put much more succinctly !

    Anyone know ?

    Yes, I read that part of the handbook thrugelmir . It seems a bit silly as I've been asked to send in proof of income for a product transfer which (according to Halifax "policy" (not regulation) I can't afford but they are more than willing to leave me on the SVR at nearly double the monthly payment !

    Anyway. I think I'm sorted out on a like for like basis at a better rate so we'll see but I can easily see someone without thier wits about them being talked into something they regret.

    My advice would be not to change anything, loan amount or term and make your disposable income look as SMALL as possible. That way they're less likely to mess you around.
    • kingstreet
    • By kingstreet 12th Apr 17, 8:33 AM
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    • 16,592 Thanks
    kingstreet
    Yes. If it APPEARS you can't afford any part of an interest-only mortgage on repayment, they will permit the PT on interest-only.

    Seems like complaints waiting to happen ! I certainly would. How can it be justified to keep you on a higher rate if your mortgage is deemed "unaffordable" while lower rates and payments are available.
    That's exactly what I'm saying. They appear to want to deal with each case ad-hoc, one by one, rather than having a credible policy to deal with all such cases.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • moffat2000
    • By moffat2000 20th Apr 17, 8:30 PM
    • 13 Posts
    • 2 Thanks
    moffat2000
    Good evening all. I thought I should finish the thread with how I got on.
    I phoned Halifax and spent a slightly torturous 90 minutes with a mortgage advisor. Really nice guy to be fair but I had to got through everything. My income, my wife's income, expenditure, loans, credit card debt, retirement plans (I'm 37!!!), repayment vehicles etc etc.
    In conclusion, my repayment vehicle is no longer acceptable (cash ISA) but they were willing to let that slide as long as I confirmed it was my responsibility to pay of the capital on my property in 23 years time.
    They then offered me a full interest only deal fixed for 2 years. This was because they claim, having done an affordability check, that I can't afford to come off a full interest only deal. I disagree but I am more than willing to take the deal and make overpayments for the next two years, chipping away at the capital.
    I imagine the fact I am at the early stages of my mortgage and only fixing for 2 years has worked in my advantage. Meaning in 2 years I can begin the whole darn process all over again. It does sound like they treat every case individually, as was suggesting in a previous comment, rather than having a blanket rule for IO deals.
    Thanks to everyone who passed on opinion and advice. Much appreciated.
    • Thrugelmir
    • By Thrugelmir 20th Apr 17, 9:21 PM
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    Thrugelmir
    It does sound like they treat every case individually, as was suggesting in a previous comment, rather than having a blanket rule for IO deals.
    Originally posted by moffat2000
    Stating the obvious. Everyone's circumstances differ.
    “ “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” Sir John Marks Templeton
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