Halifax interest increases even on fixed rate??

mikeparr1978

Hi brand new to the site!

I have recently received a letter from the halifax informing me that me mortgage is increasing due to the rise in their base rate. The problem is that i am on a fixed rate mortgage!
I contacted them to ask why the increase had been added to my mortgage to be told " the letter is a bit misleading and not very well worded, but the reason for your increase is that we have just reviewed our mortgages and found that you had not been paying the product fee amount since your mortgage had been taken out."
I have all the paperwork mortgage agreement etc and it clearly states that this is all added on to the loan and my monthly payments are xxx, for the FIXED TERM. I was then told "o actually its a higher lender fee" of which there is not a single line in my whole mortgage agreement which mentions a higher lender fee!!? I was then told, "no there wont be its usually in the terms and conditions booklet???
Has anyone else had a similar problem, i cannot see how this can be right or surely any company could just do what they want and put your FIXED RATE mortgage up at any point making up fees that knowone has ever mentioned in the past??

Gary123456790

Hi,

Sounds like you need to look at your original mortgage paperwork such as the KFI document. These would clearly show all charges and how they are to be paid.

They cant add on charges later that arent in these documents unless you agree to something new.

Request copies of the documents from the lender if you dont have them. There may be a small charge for this.

Gary.

kingstreet

What are the entries in section 4 of the KFI and your offer?

Does the total mortgage amount include any product fee? Did you ask to add such a fee to the loan?

It's possible if you didn't ask for the fee to be added, but then didn't pay it, that the fee is being charged at SVR and not at the rate you fixed at.

Halifax allow either option because if you fix the fee, you pay an ERP to get rid of it early, whereas if you simply allow it to be added after the event, SVR means you can pay it back penalty-free.

louisea64

I have just spoken to Halifax about this very same thing. I too, fixed my mortgage for 5 years and added the product fee to the mortgage. My mortgage has now increased. What was the point in paying £1,000 to fix it for 5 years when they can increase at their will.

The reason I was told is due to the fact that my direct debit goes out on 1st of the month but that some days it doesn't go out on 1st but could be 2nd or 3rd - meaning that the interest payments are different.

Yes, I've paid to keep a fixed rate but as they haven't changed interest rates for 3 years - I'm being penalised.:mad:

Means it's a bit of a mockery to pay for a fixed mortgage really.

I'll double check the smallprint on my paperwork regarding any increases and then it will be time to write a complaint letter I think!

Louise

kingstreet

Louise - is the product fee included in the fixed amount shown in section 4 of the KFI or offer?

As in, you got £100,000 mortgage and the box says £100,999 at xyz fixed rate?

opinions4u

A few years ago, Halifax mortgages fixed the amount borrowed.

If other fees were added to the mortgage these were charged at the SVR. I don't think this has changed, although the post above suggests a clearer choice now exists.

The payment at the outset assumed the customer would pay these additional fees in full. So didn't take in to account product fees etc.

At interest rate change time, typically the SVR, tracker or expiry of fixed rate, the whole payment would be reviewed.

If you borrowed £100k and added a £999 fee to the mortgage the monthly payment would be based on a £100k debt.

The £999 would sit there being charged interest at the SVR but no capital or interest payments were reducing it.

Now that there has been a rate change your £999 (or whatever the fees totalled) get included in the overall monthly payment calculation. So your new monthly payment is higher as you have to repay the product fee at some stage.

Louise, how much has your payment increased by? What is your fixed rate and how many years remain on the overall mortgage?

kingstreet

opinions4u wrote: »

I don't think this has changed, although the post above suggests a clearer choice now exists fixed rate and how many years remain on the overall mortgage?

If you opt to add the fee at application stage, it's included in the fix and shows in the KFI as an addition to the mortgage amount. You can tell the difference because the amount is different and it shows the MAF as interest free in the other box.

Eg for my last Halifax mortgage, a £90k application;-

Part 1 - £245 - MAF001 - a fixed rate of nil until the end of the term

Part 2 - £90,999 - FRV451 - a fixed rate of 3.39% which ends on 31/08/2013

Total £91,244.

By including the fee in the fix, it falls into the ERP if you want to pay it back early.

However, if you don't add it at application stage but then fail to pay it off at completion, it attracts interest at Halifax Homeowner variable rate (for newer cases) until repaid. It can be paid-off penalty free.

Thinking back, o4u - it works the way the additional security premium used to work. Halifax would add it, but charge it at SVR rather than at the product rate.

I'm assuming this is why fixed rate holders' payments are changing, but until someone comes back with the KFI figures and the amount of the increase we're a bit in the dark. I don't believe this hogwash about payment dates and bank holidays. If you pay by DD, the lender takes its payment when it wants it and it has already worked the interest for that period in advance.

opinions4u

I don't believe this hogwash about payment dates and bank holidays. If you pay by DD, the lender takes its payment when it wants it and it has already worked the interest for that period in advance.

if it was a change of a few pence I could buy it. But it sounds like tosh shared around by call centre staff who don't have a decent Q&A sheet to explain the reasons.

For what it's worth, I have faith that the Halifax system will be calculating things correctly. It's the explanations that are poor. Both written and verbal.

louisea64

Ive dug out all my mortgage papers and this is what i have found out.

My mortgage was taken out in June 2009 on a fixed rate of 4.620% for 5 years. In the KFI it states the amount of mortgage borrowed and a mortgage fee that is at 0% for length of loan. However I
also had a product fee of £995 that was also added to the loan.

From the paperwork I can now see that they state when a rate changes they will recalculate my payment to include "all unpaid fees together with any interest charged on the fees".

So I'm now guessing that the day my dd went out wasn't really the right answer to give me by the Halifax rep - he should have said it was interest on the product fee.

Well at least I now know and understand. Thank you for pointing me in the right direction. Roll on 2014 when my payments will reduce - as long as the base rate stays or drops below 3.99%!

Thrugelmir

louisea64 wrote: »

Roll on 2014 when my payments will reduce - as long as the base rate stays or drops below 3.99%!

Halifax have allowed themselves the room to raise SVR another .25% even if base rate fails to increase.

opinions4u

louisea64 wrote: »

Ive dug out all my mortgage papers and this is what i have found out.

My mortgage was taken out in June 2009 on a fixed rate of 4.620% for 5 years. In the KFI it states the amount of mortgage borrowed and a mortgage fee that is at 0% for length of loan. However I
also had a product fee of £995 that was also added to the loan.

From the paperwork I can now see that they state when a rate changes they will recalculate my payment to include "all unpaid fees together with any interest charged on the fees".

So I'm now guessing that the day my dd went out wasn't really the right answer to give me by the Halifax rep - he should have said it was interest on the product fee.

Well at least I now know and understand. Thank you for pointing me in the right direction. Roll on 2014 when my payments will reduce - as long as the base rate stays or drops below 3.99%!

Louise, you don't get it do you?

When this forum comes up with a theory that explains the problem, you're not meant to go away and check the paperwork to verify the information given.

You're meant to post straight back with words like SCAM or RIP OFF or blame the posters giving you the information for all the ills of the world!

:cool:;)