Halifax error in mortgage offer

Moneysaver30

My partner and I have recently taken out a first time buyers mortgage with Halifax, a 2 year fixed rate deal after this we would then revert back to their Standard Variable Rate.

We received a letter this week from Halifax stating that the following information in our mortgage offer was incorrect:
1) The APR (overall I think)
2) Overall cost of the mortgage,
3) Our future monthly payment (after the 2 year period)
4) The increase in our monthly payment should interest rates increase by 1%

They do appear to have made an error which has resulted in our monthly payments after the 2 year period being low and our overall cost being only £126,000 on a £112,500 mortgage. I think the error is all linked into the interest rate after the 2 year period.

They said they would amend their error and they enclosed a £150 cheque in apology. The changes will result in our overall cost being around £188,000 which is probably correct.

I was wondering if we had grounds to argue that our payments should stay the same as agreed on in our original offer? Which presumeably both the bank and ourselves have agreed on. The fact that they have sent us a cheque shows that we may have the upper hand in this matter?

Any opinions welcome.

Thrugelmir

Moneysaver30 wrote: »

I was wondering if we had grounds to argue that our payments should stay the same as agreed on in our original offer?

Do you have the money to employ a good solicitor?

kingstreet

As they can, at their sole discretion, withdraw a mortgage offer at any time and for any reason, I suggest discretion may be the better part of valour.

You got £150 for free. Make the most of it.

Moneysaver30

Thrugelmir - We would consider employing a solicitor if we thought we had grounds to argue. It would be worth it considering the potential saving to be made.

Kingstreet - Do we not enter a contract/agreement of some sort with halifax upon taking out the mortgage, which should make the conditions mandatory? And why would they send us a cheque if they could just change it at their discretion?

Thrugelmir

Moneysaver30 wrote: »

Thrugelmir - We would consider employing a solicitor if we thought we had grounds to argue. It would be worth it considering the potential saving to be made.

With regards to your follow on interest rate what does your mortgage offer actually say?

Moneysaver30

Thrugelmir wrote: »

With regards to your follow on interest rate what does your mortgage offer actually say?

The offer says that "Your loan reverts to Halifax Homeowver Variable Rate, currently 3.990% after 28/02/2013 until the end of the term. Halifax Homeowver Variable Rate is the base rate which applies to this mortgage.

However in the what you will need to pay section of our offer after the 2 years there will be "336 payments at a variable rate, currently 3.500% = £326.03".

Rather than the £510 it should be under their corrected rate.

I'm not sure if this means that they have forgotten to add on the halifax homeowners rate of 3.99% to the 3.50% standard variable rate.

hope this makes sense.

erdd2

Contract requires offer, acceptance and at least 2 parties. Halifax have admitted making an error and offered compo....you have the option to contest their error and pursue original offer stands...can be lengthy and costly with no guarantee of outcome....if you cash their cheque you are accepting new conditions

Moneysaver30

erdd2 wrote: »

Contract requires offer, acceptance and at least 2 parties. Halifax have admitted making an error and offered compo....you have the option to contest their error and pursue original offer stands...can be lengthy and costly with no guarantee of outcome....if you cash their cheque you are accepting new conditions

I just think it is strange of the bank to offer compensation when they could easily have gotten away with just a letter. It makes me think that they don't want the matter challenged.

Presumeably what kingstreet is referring to is a clause included in the smallprint which allows them to change the offer at any time, i'll have to look through the t&c's in detail I suppose.

Thrugelmir

Moneysaver30 wrote: »

The offer says that "Your loan reverts to Halifax Homeowver Variable Rate, currently 3.990% after 28/02/2013 until the end of the term. Halifax Homeowver Variable Rate is the base rate which applies to this mortgage.

Then you'll be contractually tied into this rate. Whatever it is at the time.

The compensation is due to the misleading figures quoted.

erdd2

Moneysaver30 wrote: »

I just think it is strange of the bank to offer compensation when they could easily have gotten away with just a letter. It makes me think that they don't want the matter challenged.

My sentiments exactly......it appears to be a "buy off"

Thrugelmir

Moneysaver30 wrote: »

I just think it is strange of the bank to offer compensation when they could easily have gotten away with just a letter. It makes me think that they don't want the matter challenged.

It costs lenders around £500 on average to have a complaint reviewed by the FOS, whether they are at fault or not. So cheaper just to pay ex-gratia compensation than waste money and more importantly time.