Halifax Mortgage 22 November 2006 at 8:44AM in Mortgage-free wannabe 2 replies 811 views

hondacivic

Hi

I have a query about my Halifax mortgage. I have a 10 year fixed rate deal with 7.5 years to run. I am overpaying the mortgage each month.

The question I have is that whenever there is a rate change that goes higher, the monthly payment of the mortgage goes down. I have spoken to Halifax and they tell me, the only product I have is the mortgage, and no other added fee's.

Please could someone explain to me about this.

thanks in advance

James

cazmanian_minx

I think what's happening is this:

1. You overpay your mortgage each month, paying off capital.
2. Bank of England puts interest rates up.
3. Halifax computer automatically recalculates everyone's new payments.
4. When it gets to your account, you have less capital to pay off over the remaining term of your mortgage than it's expecting (because of the overpayments) so your payments go down instead of up.

If you want them to stop doing this, you could always ask them if they can use the overpayments to shorten the term of your mortgage rather than reduce the monthly required payments.

james3333

i overpay my halifax mortgage... i specifically told them i wanted to pay off the capital and reduce the term rather than have cheaper monthly installments... i have 86k mortgage, so my monthly payments are nearly all interest!!!!