Query to people overpaying on a Halifax fixed rate deal

moominyak

Locoblade wrote: »

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?

Oh yes, I'm sure!

I think Noz has cracked it, they basically leave it alone until a change to their SVR triggers a revamp of the whole thing. I could get them to reassess my regular payments, but tbh I'm happy for them to stay as they are, at least I'll be OPing a tiny bit without really trying then!!

Noz

Locoblade wrote: »

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?

The rate of the SVR has changed and if you look on your mortgage statement you will always see the Standard Variable Rate listed as an interest rate, e.g.:

FRAXXX
HVR001

The HVR is an interest rate on the mortgage account, however for most people it is inactive as they have no balance on it.

If your whole mortgage is on the fixed rate and you pay only your contractual payment every month then no change in your payments will occur.

However if you have overpaying, the recalculation caused by the change to the HVR will see you monthly payment reduce.

moominyak

Thanks Noz for a very concise explanation

So I can stop waiting for the letter to arrive with a new repayment amount every time I make an OP then! :rolleyes:

beecher

I had a look at my old statements - the ones which I was told weren't credited were called 'bank credit' while the ones which were are called 'part repayment'. If you do a part repayment it definitely doesn't wait for a change in the SVR so I'd advise you to do those instead.

Noz

beecher wrote: »

I had a look at my old statements - the ones which I was told weren't credited were called 'bank credit' while the ones which were are called 'part repayment'. If you do a part repayment it definitely doesn't wait for a change in the SVR so I'd advise you to do those instead.

Part-repayments denote where either the payment or term were recalculated for any reason.

Typically standing orders, are denoted bank credits so monthly overpayments wouldn't usually see a recalculation.

Locoblade

Ah ok, so although the change in SVR triggers the payment change, the reduction is actually all related to the overpayments. That makes a lot more sense

moominyak

beecher wrote: »

If you do a part repayment it definitely doesn't wait for a change in the SVR so I'd advise you to do those instead.

If I'm ever able to make a substantial OP then I'll perhaps ensure it gets treated as a 'part repayment'... but for the odds n sods that I'm OPing just now, I'm happy to leave everything as it is.

Thanks for all the replies everybody, good night

mau408

I do not understand why they said they would charge you to reduce the term. We have had a halifax mortgage for the last 4 years on a fixed rate. If we have made an overpayment and at the same time asked for a reduction in term then the £10 fee has been waived.
So I would recommend next time you make an overpayment and want to reduce your term - ask for a reduction in the term and if they say the are going to charge the £10 fee ask them to phone up the central mortgage offices to confirm you have to pay a fee.

This is another way to maintain a higher monthly payment.

Good luck.

Waldir

Hi

I have another possible explanation, as it happened to me:

At the start of your mortgage, if you didn't pay the initial mortgage fees but decided to "add them to your mortgage", they get added at the SVR, even on a fixed rate mortgage.

Any change in the SVR affects this part of the mortgage, and slightly changes the amount to repay each month.


PS: it wasn't described in the mortgage t&cs, and I was able to retroactively pay these initial fees.

moominyak

mau408 wrote: »

We have had a halifax mortgage for the last 4 years on a fixed rate. If we have made an overpayment and at the same time asked for a reduction in term then the £10 fee has been waived.
So I would recommend next time you make an overpayment and want to reduce your term - ask for a reduction in the term and if they say the are going to charge the £10 fee ask them to phone up the central mortgage offices to confirm you have to pay a fee.

Thanks for that - tbh I'm not bothered about the term at the moment as I won't be able to reduce it by anything worthwhile, I'd rather just keep everything as it is and then perhaps look at a reduction in the term when I next remortgage (I'm on a new fixed rate now until Oct 2011). I think they said there would be a charge to reduce the term when I was trying to arrange a one-off OP over the phone (which it turns out I couldn't). I'll definitely find out about charges when (if!) I get to the stage of wanting to shorten the term though, so thank you