Halifax Interest Only mortgage letters

Thrugelmir

Railman wrote: »

Would I be right in assuming that the only change would be the payments each month (which we can easily afford) and that there should be no other changes to the mortgage. ie no fees, increased interest rates or additional penalties? We are currently on the SVR.

Correct.

As an aside. I assume that currently the interest rate on your savings exceeds that you are on paying the mortgage?

Railman

Yes they do, but they are inflation linked so if inflation falls the return falls. At the moment we are gaining by not paying off the mortgage but it's so little that I'm happy to switch to a repayment basis if it'll keep the Halifax happy for a year or so.

My main worry is being forced to take out a completely different mortgage product (plus fees etc..) when we only need the mortgage for 1 more year. But you say that isn't required and that they just change the repayment basis?

Thrugelmir

Railman wrote: »

My main worry is being forced to take out a completely different mortgage product (plus fees etc..) when we only need the mortgage for 1 more year. But you say that isn't required and that they just change the repayment basis?

The mortgage in terms of product remains the same.

Railman

Thanks for your good advise. I always think its best to deal with banks from a position of knowledge.

We won't bother arguing with them about the validity of our repayment plan. Instead we'll let them change us over to a repayment basis when the time comes.

jamesd

Railman wrote: »

As an adjunct, we have decided to sell the property within the next two years and move to a smaller house from which we can retire.

A credible downsizing plan is one of the repayment vehicles considered by the FSA to be acceptable.

Railman

Unfortunately the Halifax disagree with the FSA on this point. Even having a cash deposit equal to the value of the mortgage is unacceptable!

jamesd

Then I suggest that you complain and indicate your intent to refer the matter to the FOS if they don't relent.

Railman

We probably will make a noise. But the general opinion seems to be that the lender is not bound by the FSA and can retrospectively impose new terms by simply stating that they were always there, just not inforced before.

I guess it's the same as the delinking of the SVR from the base rate, and they got away with that one!

Still if all they want is to move us to a repayment basis, at no cost to us, then we'll simply pay them what they want. After all we only need it for one more year.

jamesd

The lender is bound both by FSA rules and the law governing unfair terms in consumer contracts. It can't simply ignore an agreement and consumers have sometimes succeeded in getting changes reversed. The FSA rules don't require it to accept certain repayment vehicles but they do require it to treat customers fairly and it's pretty hard to see how it is doing that in your case.

opinions4u

jamesd wrote: »

The lender is bound both by FSA rules and the law governing unfair terms in consumer contracts. It can't simply ignore an agreement and consumers have sometimes succeeded in getting changes reversed. The FSA rules don't require it to accept certain repayment vehicles but they do require it to treat customers fairly and it's pretty hard to see how it is doing that in your case.

A savings account was never an acceptable repayment vehicle to Halifax.

It seems likely that, while rules existed a few years ago that will be much the same as they are today, nobody every bothered to discuss or check what was "acceptable".

There might be mileage in a complaint, but I can't really see the point as there is no loss made and no gain to be made.