would halifax let me off with a penalty for new business?

insanojackson

I currently have a three year fixed rate with Halifax, the tie in period ends in February 2013 (not sure of exact date) The initial loan amount was 83k. I recon the current balance would be something like 78k as i have been paying for 3 years.

However today we have agreed to part ex the current house against a new build. Its due to complete mid January. This would involve upping the mortgage to approx 144k with about 40% deposit. Obviously this would be during a period when i woluld be iable for a penalty.

I cannot get an appointment with my halifax adviser until friday however my question is this.

Would halifax be likely to release me from my current deal approximately a month early without any penalty if we were to start a new mortgage with them for a higher amount? This would mean they have retain more lucrative business in the long run.

The have a 5yr fixed on their website at 3.69% with no fees with 40% min deposit, this seems ideal for me.

kingstreet

No. It's unlikely to go how you have suggested.

What you would need to do is arrange a new mortgage with Halifax for the amount you need. The first part of your new mortgage would see the rate from your current mortgage "ported" over to the new one for the short period it has left.

Any new borrowing would be offered on one of the lender's current products for those moving home.

Once the fix ends in February, you would then roll over onto the follow-on rate, possibly the standard variable rate, or you would have the option of a product transfer to one of the Halifax customer retention products.

Either way, you need to discuss this with them. I've never known them waive an ERP, but you could try and see what they say. At least if they won't, you'll know what happens in those circumstances.

insanojackson

Thanks, so if it ports over then I will have to get the extra amount at a higher rate? Will this only be for a month or so then i will be able to put the whole mortgage into one product?

If this is the cae it should work out ok really as the extra interest will only be paid for 1 or 2 months. Certainly cheaper than paying the exit fee!

poppysarah

insanojackson wrote: »

However today we have agreed to part ex the current house against a new build.

Have you signed anything?

zzzLazyDaisy

insanojackson wrote: »

I currently have a three year fixed rate with Halifax, the tie in period ends in February 2013 (not sure of exact date) The initial loan amount was 83k. I recon the current balance would be something like 78k as i have been paying for 3 years.

However today we have agreed to part ex the current house against a new build. Its due to complete mid January..

If your tie in ends in February, and the new build is due to complete mid January, you may not have anything to worry about as (in my experience) new builds rarely complete on time. Even if the building is completed on time, a couple of weeks is neither here nor there, and if it matters in terms of the mortgage, you can probably agree a completion date for the purchase of the new property to coincide with the expiry of your current mortgage.

What should concern you more is the long delays that you often get on new builds and the effect that can have on a new mortgage, as people have been left with a legal commitment to buy and no mortgage available to do so due to falls in value, change in financial circumstances etc. So you should be very careful not to exchange until the place is actually built and available.

kingstreet

insanojackson wrote: »

Thanks, so if it ports over then I will have to get the extra amount at a higher rate? Will this only be for a month or so then i will be able to put the whole mortgage into one product?

If this is the cae it should work out ok really as the extra interest will only be paid for 1 or 2 months. Certainly cheaper than paying the exit fee!

No. The extra borrowing will be on one of the lender's current offers to those moving home. It may be lower, higher or the same. It will be your choice. This part of the mortgage will remain as it was arranged for the agreed period.

Once the fix ends, that part of the mortgage can go onto one of the lender's customer retention products. You will not be able to equalise them on the same deal until they both fall onto their respective follow-on rates.

As I said, you really need to speak to them directly.

insanojackson

Cheers I am going to speak to them directly on friday as thats the first appointment i could get. I was just after the heads up. My tie in actually ends on 28th Feb 2013 so its about 6 weeks after the predicted completion date.

I just phoned up for a balance on my current mortgage and its about 1000 less than i thought it would be so good news !

zzzLazyDaisy

If it is only 6 weeks after the predicted completion date, you should be able to negotiate a completion date which fits in with your mortgage requirements. In my experience, developers are usually optimistic with their completion dates anyway.