Halifax 20% Overpayment Promotion

hshen

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'm not sure how the maths will play out. I'm on a 2 years 'fixed' rate above base rate. My guess is they want to lock me in for x number of years to made a minimum profit out of me first.

Unless their cost of funding has dropped, which I doubt it.
My money is still on buffer against future default for people with low equity in their homes. Perfectly timed to 'cash' people's saving in before the job cuts start.

VT82

Oh I didn't realise it applied to fixed rate mortgages too. I guess in that case, they are happy to reduce balances which are loss leading, or are scarcely paying more than the rate needed to attract new retail savings balances of an equivalent term - once they've already got your arrangement fee in their pocket. It will definitely also be to do with encouraging a reduction in LTVs to improve capital ratios as you point out. And I guess they also want to reduce balances which will revert to their old SVR if that still applies.

Hope it works out to be a good deal for you and take it if it is :beer:

catieeb06

The 20% promotion applies to tracker interest rate mortgages only.

Fixed is still the standard 10% and SVR is whatever you want to overpay.