Have Halifax miscalculated my Mortgage and what should I do after the fixed rate ends

97browng

Hi All,

I bought a house last year on a 2 year fixed rate mortgage and I just had my first annual summary. I had a look through and it does not make full sense to me.

Basically my yearly statement shows the balance I have paid and at the end of the year it shows the interest to be added to the account.

However if I work out what I have paid in total to my balance due at the end of last month it does not work out.

I assume this could be because the balance due is showing what I would have to pay if I decided to pay it off today (not including early repayment charge) and includes the last 3 months interest. Does this sound likely?

However my other question is what should I do at the end of my fixed rate (this is some time away). Assuming everything stays the same my rate will fall from 4.69 to the variable rate of 3.99. This works out at about a £50 per month saving.

Now my mortgage is very long (39 years) and I want to reduce that so would it be best to remortgage my account to get a lower rate and reduce the years or would it be best to just overpay by £50 per month (I am allowed to do this as part of my current deal).

As I have only just paid the first 2 years most of that will be interest so if I remortgage again I assume i will be paying off the interest first so these 2 years will have been wasted. If you add to that fees etc... then it could cost a lot. However I have worked out that with the current deals I could reduce the term by 10 years easily and pay no more that I currently do.

I think that assuming interest rates stay the same I will probably stay where I am and just over pay and then look in a few years look to move and reduce the term of the mortgage.

Anyway your help and advice would be appreciated

dimbo61

Who knows what the SVR ( standard variable rate ) will be in 12 months time.
If you can overpay then do so as you have such a long term (39 Years) that you will pay little if anything off in the first 2 years.
If the SVR is 3.99% at the end of the year I would look at a long term fix of say 5 years to give you security and overpay that if possible

Joe_Bloggs

@97browng
Can you view your Halifax mortgage online ? If there are confusing legal terms then state them online or ask in a local Halifax branch for explanation.

You pay interest on the money you are borrowing. It is the term over which you are borrowing that sets the ratio of interest payment to capital repayment such that you will owe nothing at the end of the term.

J_B.

97browng

Hi both,

Thanks for the reply. If the variable is still on 3.99 in 12 month I think I will just overpay about £50 per month to start with. If rates go up then it might be time to fix into something a little longer.

I do have online banking but I never got sent the password. I rang them today to get set up and was put on hold to 3 different people. After 30 minutes I just had to hang up.

Thanks for everyone's help my questions have been answered.

Joe_Bloggs

Since you can't prove to Halifax who you are online it would not surprise me that other clerical errors are also occurring. Escalate this situation to an a complaint and it will be sorted in a smooth and professional manner by a complaints handler. Act calm and never lose your temper. In the end misunderstandings will be resolved.
J_B.