Query to people overpaying on a Halifax fixed rate deal

moominyak

Hi all,

Some months ago my minimum payment came down slightly, I thought this was because of the overpayments I'd made.

However, having re-read the letter, it seems that it was really because the Hfx's SVR had come down, therefore my payments also came down even though I was on a Fixed rate Or perhaps it was just coincidence that my OP triggered a change just as the SVR changed too?

I've been OP'ing since then but haven't had news of any further changes to my minimum payment. However, I've just (1st Aug) started a new product with them so perhaps the OPs I made between the change and the 1st Aug were taken account of in my new regular payment and I'll need to OP another £500 before I see another change?

Does anybody out there know what the Hfx's policy is, eg. does it take a cumulative or single OP of £500+ to trigger the minimum payment to reduce?

As far as I know my term has stayed the same, I'm sure they've said they'd charge me to reduce the term so I haven't gone down that route yet.

Maybe I just need to psych myself up and ring them... but I always seem to get different answers from different staff when I try that! :rolleyes:

Sorry for going on so long and TIA if you have the answer!

beecher

I overpaid on my Halifax mortgage a few times 2 or 3 years ago and found out that the money hadn't been credited and was just sitting there. During my mortgage review I was advised to save up the money and to do larger overpayments, but also to make sure that the banking staff note it down as a 'capital repayment' in order for it to come off the capital. I did so and phoned the helpline for confirmation - they told me they'd put a note on the system stating that the money was to come off the capital as sometimes the cashiers didn't process it correctly. A couple of weeks later I received a letter confirming my overpayment and reducing my amount payable slightly.

I would still phone to make sure that your money has been credited, and also check your annual statement as it'll say capital repayment beside the credit.

Good luck.

moominyak

The money's definitely coming off my balance as I can see it online (and I have a saddo spreadsheet so I can keep track of the interest etc).

Just had my annual statement, it didn't say 'capital repayment' by the OPs but they were definitely in the right column! I think it either said 'transfer' (when I'd moved it straight from my Hfx a/c) or 'bank credit' (when they'd been made from a non-Hfx a/c).

Thanks for that though

Locoblade

If you're on a fixed rate, how is that in any way affected by the SVR?

Jonbvn

beecher wrote: »

but also to make sure that the banking staff note it down as a 'capital repayment' in order for it to come off the capital. I did so and phoned the helpline for confirmation - they told me they'd put a note on the system stating that the money was to come off the capital as sometimes the cashiers didn't process it correctly.

If you have a standard repayment mortgage then overpayments will always reduce the capital. In such a case you can do one of two things:

1. Either: Reduce the term of the mortgage keeping the standard monthly.
2. Or reduce the monthly payments, keeping the mortgage term the same.

In our case, we like to reduce the standard repayment amount, but keep our actual monthly payment amount unchanged (well above the standard payment). This allows us to drop down to the lower standard repayment amount in case of any unforeseen problems.

moominyak

Locoblade wrote: »

If you're on a fixed rate, how is that in any way affected by the SVR?

:rotfl: That's what I thought!! I've no idea!

I rang them the other day to change my regular payment (ie. to increase it so I was OP'ing) and the lady I spoke to said they could amend my payment but if there's a change to their SVR then my payments would revert down to whatever they should be (ie. the minimum monthly payment) - ???

And it was after the above conversation that I found the earlier letter about my reg payment coming down which made mention of the SVR - as I say, perhaps it was just a coincidence, or perhaps the two things are completely unrelated and they just put that on the letter to confuse me (which it did!).

I suspect that there's a £500 "trigger" which would prompt a change to my minimum monthly payment - alas, a regular OP of £500 is beyond me so I'll just have to wait and see in a few months' time!!

moominyak

Jonbvn wrote: »

If you have a standard repayment mortgage then overpayments will always reduce the capital. In such a case you can do one of two things:

1. Either: Reduce the term of the mortgage keeping the standard monthly.
2. Or reduce the monthly payments, keeping the mortgage term the same.

In our case, we like to reduce the standard repayment amount, but keep our actual monthly payment amount unchanged (well above the standard payment). This allows us to drop down to the lower standard repayment amount in case of any unforeseen problems.

My sentiments exactly. My money is definitely coming off the balance so I'm not worried, I'm just curious as to why my minimum payment hasn't come down again - as I said, I think it's probably due to the new remortgae product just starting, together with pretty low OPs not being enough to trigger a new repayment amount (alas!).

Noz

Whenever there is a change to the Halifax's SVR, this triggers a recalculation of every single mortgage account.

Obviously if you overpay, this will see your monthly contractual payment reduce. As stated you can ask your payment to be reassessed after each overpayment if required.

Locoblade

Are you sure they are still charging you on your agreed fixed rate and some admin error hasnt dropped you onto SVR for some reason?

Fixed rate is, as the name suggests, a mortgage where the rate is fixed!
Overpayment can change the amount paid per month but surely not rate changes.

Locoblade

Noz wrote: »

Whenever there is a change to the Halifax's SVR, this triggers a recalculation of every single mortgage account.

How does that work though, the rate hasnt changed for the fixed mortgage so the monthly repayment calculation should be the same whenever they do it?

moominyak

Noz wrote: »

Whenever there is a change to the Halifax's SVR, this triggers a recalculation of every single mortgage account.

Obviously if you overpay, this will see your monthly contractual payment reduce. As stated you can ask your payment to be reassessed after each overpayment if required.

Ahaaaa.... so if I just OP things will stay as they are - they don't recalculate the payment automatically? But obviously the interest will be lower so more of my regular payment will come off the capital, which is all good.

And then when there's a change to the SVR the mortgage as a whole is reassessed and recalculated, and that's when the monthly payment will change (IF there have been overpayments made)

I think I get it now, thanks for that Noz :T

Begs the question... what happens if there's no change to the SVR, therefore my repayments and term stay as they are and I OP as well - will they owe me in 33 years' time?

I'm just kidding!! Of course I'll be looking to reduce the term before 33 years is up (bloomin' well hope so anyway)