Morgage Company Bullying me into converting from low interest tracker.

seftonbarn

Please please please please please please Martin Lewis read this.

About 18 years ago, with the help of a finincial advisor I took out a 25 year endowment mortgage with a high street mortgage lender.

Having been a victim of a mis-sold endowment (but missing the boat on the claim) the endowment will be short of about £50K when it comes to repay the mortgage.

About 5 years ago, I went to my local branch to see if I could save anymoney on my mortgage. They explained a number of alternative “products” as they called them and by good fortune rather than good judgement I elected to opt for a base rate tracker interest only mortgage. (base rate + about 0.25%).

Soon after this interest rates tumbled and I have been enjoying paying a very small mortgage ever since.

Recently said b&%$£"d mortgage company wrote to me asking me to provide evidence of my intended repayment method at the end of the mortgage period. I replied with thefollowing:

A cash ISA worth £15K
An endowment policy currently worth £30K and maturing in 7 years at Mortgage end date.
Another endowment maturing next year and currently worth £25K.
An HM forces early departure payment due next year at £65K.

Total is absolute minimum £135K. Outstanding mortgage is £100K.

In response said mortgage company (b&%£”*%s) explained that: savings can’t be counted and pensions can’t be counted if they are worth less than amillion or the lump sum is less than £250K. They offered a number of options but it was very clear that they wanted to transfer me from my interest only tracker mortgage to a repayment mortgage on a considerably higher interest rate.

This make me feel very, very bitter.

In good faith I took the mortgage and endowment policy out with them. I have now had to make other savings arrangements and also had to accept that the majority of my 32 years served RN pension lump sumwill have to be used to pay off my mortgage endowment shortfall. But even thisis not enough; they are clearly trying to bully me into paying another£200-£300 a month in interest for the final few years of the mortgage because they don’t accept what is clearly a very realistic indeed cast iron secure repayment plan.

How dare they arrrrrrrrrghhhhh!!!!!

Dave_Ham

They cannot enforce a move, you can run as is until the end of the agreed term.

Great slice of luck on the tracker, stick to your guns....

kingstreet

If you do have to change to repayment, there's absolutely no reason why your rate has to change.

dunstonh

Switching from interest only to repayment has no impact on the mortgage rate or deal you are on. So, they cant force you to move.

seftonbarn

But if they can force me to convert to a repayment doesn't that mean that I will have to pay £100K off in capital on a monthly basis between now and morgage end? Why should I have to do that rather than allowing my money to accrue interest at a greater rate. Especially when I have money set aside and bags full of collateral in my property, which I might add, has been a suffiecient form of security to said mortgage lender up to now.

Dave_Ham

I still do not believe they can enforce the change to repayment.

kingstreet

TBH I can't answer.

If Halifax is writing to borrowers and publishing a list of acceptable repayment methods for interest-only borrowing, it must have some way of enforcing a change if it will not accept certain plans.

Whether (or not) the FOS agrees may be a different matter...

What about changing to part and part? Remain on interest-only for the bits for which you have acceptable evidence and change to repayment for what you don't.

seftonbarn

Apart from the fact there is sufficient collateral in my property my gripe is that they appear to be able to write of almost any form of suggested repayment plan. How can savings be unacceptable? How can a government assurred pension lump sump worth £64K not be valid unless it is valued at more than £250K?

Dave_Ham

Under their current criteria you would not qualify for interest only. It is their criteria and they can pick and choose what they will accept.

Your issue is they did not request this when you signed up, I personally (and just my opinion) do not believe they can enforce current criteria unless you try to raise more money or move property.

Have they actually told you that you have to have a repayment?

Thrugelmir

seftonbarn wrote: »

Why should I have to do that rather than allowing my money to accrue interest at a greater rate.

Correspondingly the bank is losing money on your business.

So easy to understand the situation from both sides.

seftonbarn

Have they actually told you that you have to have a repayment?[/QUOTE]

What they have said is that I have a number of choices:
1. convert to repayment
2. invest savings in their approved stocks and shares ISAs, unit trusts etc (which infuriates me even more beacuase I now have a no risk solution and (having been bitten by a useless endowment before) don't want to risk anything.
3. Make a lump sump payment and take out a repayment for the balance.

But they have not listed as an option is a "stay as you are".