Halifax 20% Overpayment Promotion

hshen

Hi,

In my mortgage offer states that I'm allowed 10% overpayment each year for the first 2 years.

I just called Halifax Mortgage department to arrange an overpayment.
And been told by Halifax there is a promotion offer that I can actually overpay up to 20% this annual period without a penalty.
The promotion offer is valid up to 31/03/2011.

Can someone else confirm if this true?

I have a fairly low loan to income ratio, hence the extra 10% might come in handy!

charlieann

I would get them to confirm the 20% in writing before exceeding the 10% limit so they have no comeback on you.

Senior_Paper_Monitor

...... and check exactly what it is 20% of !

hshen

Definitely out of character for the banks to give anything extra away these days!

I'm going to call them again and double check the facts before I do anything.
Write a few names and time of calls down.

The lady I spoke to seems fairly sure about it, and even quoted me a pound figure that I can overpay by. Which is 20% of the outstanding loan amount.

Still better safe than sorry. Going to double confirm with someone else before I do anything.

[Deleted User]

hshen wrote: »

Definitely out of character for the banks to give anything extra away these days!

They're not giving anything away. It's in their interest to get mortgages paid up, or a buffer built up in case you have trouble meeting payments in the future. Having to repossess isn't in their best interests.

opinions4u

if my memory serves me right lloyds and c & g have the same offer

beecher2

From their website:

Normally, the limit on any extra payments you can make each year before the charge applies is 10% of the mortgage balance. However, to enable those customers on a variable rate to take advantage of the current historically low interest rates, the overpayment allowance has been doubled until 31 March 2011. This means if you have a variable rate mortgage subject to an Early Repayment Charge you can pay up to 20% of your mortgage balance before incurring the charge, unless you go on to repay or change the rest of the loan within the next six months. The charge varies, depending on how long you have left on your mortgage deal

http://www.halifax.co.uk/mortgages/existingmortenquiries.asp

hshen

Deleted_User wrote: »

They're not giving anything away. It's in their interest to get mortgages paid up, or a buffer built up in case you have trouble meeting payments in the future. Having to repossess isn't in their best interests.

I think what they would really like to do is have extra buffer for mortgages with < 30% equity. But they can't.

So they come out with this fluffy "why don't you take advantage of this low interest rate" for everyone.

hshen

beecher2 wrote: »

From their website:



http://www.halifax.co.uk/mortgages/existingmortenquiries.asp

Thanks beecher2.
I think it's pretty clear that this is legit and makes perfect sense given the public sector job cuts etc coming up.

VT82

Surely they're offering this because they've got more people than they want to have on cheap variable rates, and they would rather have your overpayments so they can lend it out again at higher rates, with their higher new SVR rate applying afterwards, and to get fee income from new lending? It definitely seems to be in their interest to have people overpay, but fortunately that doesn't stop it being in your interest too.

Also, if someone is on the SVR, they can overpay unlimited amounts at any time, so does this mean it is being offered to Bank Base rate tracker mortgages, in which case it is even more so in their interest to have these balances reduced?

opinions4u

VT82 wrote: »

Surely they're offering this because they've got more people than they want to have on cheap variable rates, and they would rather have your overpayments so they can lend it out again at higher rates, with their higher new SVR rate applying afterwards, and to get fee income from new lending? It definitely seems to be in their interest to have people overpay, but fortunately that doesn't stop it being in your interest too.

Also, if someone is on the SVR, they can overpay unlimited amounts at any time, so does this mean it is being offered to Bank Base rate tracker mortgages, in which case it is even more so in their interest to have these balances reduced?

I think it's fairly obvious.

The bank doesn't want to rely on wholesale funding in the future as that has proved to be a flawed business model. It also has to repay the Government's "Special Liquidity Scheme" by 2012.

If they can reduce their mortgage balances faster, they move closer to achieving both.