Halifax Mortgage Overpayment

ruby28

Hi

I am hoping for some advice with reference to the above, I took out a interest only mortgage in July 08, it was fixed at 5.69% for 5 years (not good in the current climate). The mortgages states

"As a concession, in any one year you may repay up to 10% of the amount outstanding on your special rate product without having to pay an early repayment charge. We reserve the right to change or withdraw this concession."

With this in mind I paid off 10% of the mortgage in April 09, now I am the second year of my five year mortgage I wanted tp pay another 10% off my mortgage. I tried to do this today and the mortgage company refused to take payment as I paid 10% in April this year. They informed me that could not make another payment until April 2010!

I don't think this is correct as far as I am concerned I am in the 2nd year of my mortgage so I should be able to pay another 10%. Any advice welcome.

Thanks
Jo

dartilov

I believe they are right as your payment date in Apr 09 will formulate the year ie 12 months from then, hence them saying April 10.

Thanks

Andy

Comyface

Yes, sorry, what Andy said.

I think a few customers must have thought the same as you though, as Halifax have now changed the wording of that concession to something along the lines of 'in a rolling twelve month period' rather than 'year'. But the rule itself is still the same.

BTW, did the branch inform you that you could still make your overpayment but would incur partial ERCs? Sounds a bit wierd if they just point-blank refused to take your money!

CvPiper

I am also with Halifax, can someone confirm on the ERC, which on my fixed rate over 5 years it states 5% 1st year 4% 2nd year etc, but it is unclear and sort of says the ERC is a % of the original loan, not the o/s amount I am paying off, have I interpreted that correctly?

MarkyMarkD

I do not accept what Andy says. The wording "in any one year" can't just mean what Halifax choose it means. If they are unclear, then it means whatever YOU choose it means. That is simple contract law - if a term is unclear, it means what the weaker party to the contract reasonably interprets it to mean. (Paraphrasing the law, but it's something like that).

I think the OP's interpretation is quite reasonable and indeed far more straightforward than Halifax's.

ruby28

Thanks for the replies, not what I was hoping though. I tried to pay over phone today, will try branch tomorrow to see if what ERC they will charge for the 10%, although I may still argue the charge as I cannot see why the first 9 months cannot be accounted for in the 12 month period.

CvPiper, the ERC is from when the mortgage was taken out, which is why I found it odd that the overpayments were applicable to any 12 month period.

ruby28

Thanks MMD, that's exactly what I thought, gives me some more confidence to argue my point.

DJ_Mike

OK, I can't speak for Halifax directly, but banks that work on the 10% repayment system seem to be fairly alike, so...

Abbey let me overpay 10% of my mortgage balance in any one calendar year - that's the year from 1st January to 31st December. The 10% I'm allowed to pay off is calculated against what the balance was on the 1st January.

So if my balance was £100,000 on 1st January 2009, I'd be allowed to pay off £10,000 extra during the year 2009.

The fact that you made the payment in what you consider to be the "second year" of your mortgage is neither here nor there - usually (and I know for a fact that this is the case with Abbey), the years of your mortgage always roll over on the 1st January. This is also because special incentive periods (fixed rates, etc.) aren't necessarily for an exact number of years - my deal with Abbey lasts until October 2013. At the time I got the agreement, this would have been 50 months; now that I'm getting the mortgage for real, it just so happens that it's 4 years exactly. This doesn't change the fact, however, that my "overpayment allowance" will still reset every 1st January.

[STRIKE]So I'm afraid you will probably need to wait until the 1st January to repay any more of your mortgage - and make sure you check the capital balance outstanding as of the 1st January as well, so you don't risk going over it and incurring any charges! [/STRIKE]

Edit: A quick read of the Halifax website tells me that they operate on a "rolling period" basis - this means you can overpay 10% of the balance in the 12 months from the date when you first made an overpayment - so not the 1st January as Abbey do. However, since you made a full 10% overpayment in April this year, you will have to wait until April 2010 until you can overpay 10% on the balance then.

MarkyMarkD

But KFIs don't work like that. If they don't define something clearly in the KFI, it isn't binding. That is why Halifax's tracker rate floors are not binding on customers - they mentioned them in small print outside the KFI, but not within the KFI.

I simply do not believe that the FOS will uphold a Halifax interpretation of something, which is not clearly defined within the KFI. If they couldn't be bothered to define it properly up front, they can't impose a definition that suits them further down the line.

MarkyMarkD

Of course if you claim you would lose your NCD. What else would happen?

Regarding the validity of the claim, I think the idea that you would not be covered for damage caused by the fire service following the fire is very dubious from Halifax. If it is a consequence of the fire, it should be covered.

Regarding not calling you back, CALL THEM BACK! I presume you have a reference number for the claim?