Halifax Overpayments - how do you calculate the maximum amount?

SuzieSue

My friend has a fixed rate interest-only mortgage with the Halifax and wants to make some overpayments.

The terms of the mortgage say:

In any 12 month rolling period you may repay up to 10% of the amount outstanding on your mortgage product(s) without having to pay an early repayment charge.


Every time we ring and ask what they mean by "10% of the amount outstanding" we are told different things. Some of their staff tell us that the amount outstanding is the amount outstanding when the 5 year fix was taken out and others tell us that it needs to be calculated every time you make a repayment so that it reduces during the term of the mortgage.

Does anyone know which is correct?

Thanks

Wutang_2

SuzieSue wrote: »

Every time we ring and ask what they mean by "10% of the amount outstanding" we are told different things.

honestly?:money:

opinions4u

The rolling year starts when you make the first overpayment (i.e. any previous overpayment was more than 12 months ago).

The 10% is based on the balance outstanding on that product at the time of the first overpayment in the rolling year.

You might find that staff don't realise this and allow you to base it on 10% of the sum originally on that product.

SuzieSue

Wutang wrote: »

honestly?:money:

Yes, that is why I am asking on here.

He has gone over the limit if it is based on a reducing balance which is why he doesn't want to take it any further with them (the penalty is several thousand pounds).

We have rung at least 3 times. The first person was so wrong about everything he said that we gave up and rang again. The second person seemed much more knowledgeable and told us it was based on the initial loan amount, so he was relieved about that.

Then he rang again last week just to check how close he was to the maximum and initally the person said that it was based on the reducing balance and when we said what the 2nd person had said he said, yes, they were "probably" right. So he is really worried that he has gone over the maximum.

SuzieSue

opinions4u wrote: »

The rolling year starts when you make the first overpayment (i.e. any previous overpayment was more than 12 months ago).

The 10% is based on the balance outstanding on that product at the time of the first overpayment in the rolling year.

You might find that staff don't realise this and allow you to base it on 10% of the sum originally on that product.

Thanks, but if you have a repayment mortgage, it will be very difficult to calculate the balance outstanding.

Yes, it looks like their staff are telling people that it is 10% of the original sum.

opinions4u

SuzieSue wrote: »

Thanks, but if you have a repayment mortgage, it will be very difficult to calculate the balance outstanding.

It takes them about 5 seconds to look it up.

Yes, it looks like their staff are telling people that it is 10% of the original sum.

Take a note of the name, time and date of the call. Pay the part repayment based on the information given.

Most likely no penalty will be charged.

If it is, your subsequent complaint will be upheld.

catieeb06

From what I remember when I worked in their servicing call centre which was 2 years ago so I apologise if the information is now out of date- we had to look at when the amount on the product was last recalculated because when you make overpayments the processing team are meant to then alter the computer systems to show how much outstanding has been allocated to what product, but sometimes they don't.

You then make a 10% overpayment of that amount. Obviously your friend needs to deduct what he's already overpaid from that amount.

It's a bit complicated and like I say, may have changed since I last worked for them.

jennifernil

We used to have a Halifax mortgage that allowed a max 10% capital repayment every year without penalty.

Each year we repaid as a lump sum the maximum additional amount allowed , it was based on the amount outstanding on the day we repaid, so it reduced each year.

We always repaid on roughly the same date every year, never less than 12 months after the previous repayment.

Then we requested a reduced monthly payment, keeping the term the same.

We also had the option to keep the repayment the same and reduce the term.