Halifax Building insurance-CON???

wardlaw

First port of call

Make an official complaint to the Banks Compliance Department

It does not sound right to me, if they never informed you that you needed to pay the insurance

A Bank or Building Society simply cannot add the premiums to your mortgage over a 20 year period, without seeking your permission, in the first place I have never heard of this before and I speak as an ex Building Siociety Manager and some one who has worked in finance for over 28Years

They need your authorisation for adding it to the loan, as its a compliance issue

Because :-

YOU WILL BE PAYING INTEREST ON ALL THESE PREMIUMS

YOUR MORTGAGE IS IN EFFECT INCREASING ANNUALY BY THESE AMOUNTS


You should be able to claim back all of the interest charged over the last 20 years, which could be substantial

KTF

I didnt even know that you could get your building insurance added to your premium. Why would you want to do that rather than paying for it via a separate policy as the interest (as noted above) will be quite a lot when its combined.

Mr_helpful

Buildings insurance is compulsory but it does not have to be with the halifax. If they dont see any buildings insurance (usually your solicitor handles this when you buy the house) They have the right to insure it as its their house until you have paid for it. I cant see you have a claim against them. You say you claimed against it well its a good job they put it in force isnt it?

MarkyMarkD

I don't understand how your payments would not have covered the insurance. If (and I emphasise IF) it was a repayment mortgage, then it's Halifax's responsibility to set the monthly payments to collect the amount due on the mortgage over the agreed term.

If that was happening, it would work out OK whether or not insurance premiums were being added to the loan.

The only way I can see this happening is if the mortgage was interest only. But even then, with my lender they have a specific interest only amount (equal to the initial advance, in my case) and anything debited to the account over and above that is collected on a repayment basis to ensure that the balance at the end of the mortgage's life is the correct interest only amount.

If they are saying NOW that the payments are so high because they are collecting money for old insurance premiums, why has that logic not worked earlier in the 19 years? Did they only suddenly work out that you had this huge unpaid amount?

It all sounds a bit unlikely to me, to be honest.

dunstonh

Halifax many years ago used to collect the house insurance against the mortgage and pay for it via the mortgage payment.

They were not alone in this and whilst it isnt common nowadays, it was almost standard years ago.

Like MarkyMarkD has said, something about what you are saying, at least in the context you are presenting it doesnt sound right as it isnt the sort of thing that can happen over night and without notice.

MarkyMarkD

I'm used to exactly the arrangement that dunstonh mentions - I'm sure that my first mortgage (which was also from Halifax) had this. But the monthly payments were set to cover both the mortgage repayments and 1/12th of the annual insurance premium.

They didn't set up the insurance premium as a separate sub-account, as seems to be the case for the OP - they wouldn't need to do that.

Lorian

Alas for that 19 years they probably having been charging you over the odds for the insurance too. I recall when I switched from halifax insurance to shopping around (I think I went to directline initially) my premiums about halved in the first year.