Halifax - Consent to let

Desusual

I have a 25 year mortgage with 5 years to run on a house which I have previously had a consent to let on from Halifax. The house value is £140K and mortgage borrowed £45K currently on variable rate.

They have contacted me and said that in order to continue the Consent to let I must move to A: 5.49% Fixed 3 years with £999 fee B: 5.19% tracker 3 years with £599 fee C: Penalty If I do nothing is they will add 1% to current variable rate so charge 4.5% and consider my letting unauthorized.

I am confused because the penalty seems more attractive to me than the actual deal offered. I do like to fix, but not for £1000 on a £45K mortgage with 5 years to run. The harshest aspect from Halifax was that because of the non authorization, they say they will never put me onto another deal and it may affect my ability to borrow elsewhere for residential mortgages.

So effectively they are pushing a 20 year customer away who has never defaulted ever, into the hands of competitors when more competitive arrangement fees arrive.

I asked about a buy to let deal, but they said they don't do those any more.

Have I missed something here? Is this a great deal they are offering? Is the reputation threat serious?

Thrugelmir

Consent to Let is only ever intended to be a temporary arrangement. So HBOS considers that you are now running a business and is revising its lending terms accordingly.

I would take the threat to your reputation seriously. As all major financial institutions do share credit data on black marked customers.

In due course the penalty rate of +1% could be increased further.

Lenders such as HBOS are contracting the size of their lending books so losing some customers isn't an issue to them.

holly_hobby

There have been several recent threads of the same subject - Lloyds Banking Group (whom HBOS now form part of) have much more robust lending models, and wish to reduce the exposure they have inherited from the HBOS book. (indeed one poster had been on CTL with Halifax for 11 yrs !!)

Anyhoo I digress, if you do accept the penalty (which on the face of it seems attractive - and as Thurls. states may be increased at will), it means that you are in breach of your contractual mortgage T&Cs - which in respect of the lender, also means that they may instruct redemption (repayment of the lending) whenever they wish with little notice or consideration.

In my opinion, to proceed on this basis would certainly leave you balancing on quick sand.

Of course the decision is yours to make.

Hope this helps

Holly

Desusual

Thank you . I will take your advice and play ball. I just think that the letter from Halifax was poorly drafted and lead me to believe that they despised me personally. If they had just said that these events were a natural progression in our relationship I would not have got so excited.

I have to say for a 20 year customer I feel very uncomfortable with the experience I have had , involving multiple phone calls. I,ve had more fun with HMRC.

:beer:

brit1234

Its like with electricity providers, best to shop round to find the best deal. As the others have said consent to let is temporary, renting a property full time is a business and you should have a commercial mortgage through buy to let rather than residential. The costs are higher due to higher risk of renting.

SILLYMOO

Hi, Im currently with the Halifax on a residential mortgage. My house is for sale but not selling despite below market value pricing!!! My current mortgage deal ran out in December and im on the same deal but not tied in, with no 'get out' fees. I want to move away and am wondering if i get consent to let can i get a further residential mortgage?? Also will i get ridiculous fees for the consent to let?? Anyone help???:o

Thrugelmir

SILLYMOO wrote: »

Also will i get ridiculous fees for the consent to let??

Doesn't the fact that your property isn't selling tell you something?

CTL shouldn't be viewed as an easy option. Property does take time to sell. Its not a liquid asset. The downside risks are sizable. For both borrower and lenders alike.