TMB (Halifax) - Interest-only swapped to repayment

Hucairz

Hi Folks,

Around 2000 I took out a self-cert interest-only mortgage with TMB (a division of Halifax).

I increased the mortgage around 2005 to pay for an extension.

Around 2008 my finances improved so I asked TMB to convert to paying the mortgage as a repayment mortgage - they just said yes and upped my monthly payment accordingly. This was all done over the phone and I never signed anything, or got a new contract.

The year before last, I was made redundant, and got in touch with TMB to reduce my payment. They agreed over the phone, and I started making interest only payments again.

Coming up to the one year anniversary of this reduction they advised that they wanted me to swap back to interest plus repayments. My financial situation is such that I could not afford to do so.

In the first twelve months they counted the interest only payments
as my FCP - but now they are counting the FCP as the interest + repayment amount - and thus showing arrears on the mortgage.

To try to keep them happy I have increased my payment to £150 above the interest only value, but they are still pressing me to revert to full interest and repayment payments even though:

- The mortgage was originally interest only
- The property is valued at 240,000 and the mortgage is only 120,000.

Is this usual? Can TMB force me to make the repayment amount payments even though the original mortgage agreement was interest-only?

Thrugelmir

When on the repayment basis, and you switched back to interest only. Highly likely that the switch back was only temporary. In that the TMB did not issue revised contractual terms and conditions.

Suggest you read the correspondence that was sent at the time. As possible you may have glossed over this fact. Considering it immaterial at the time.

The follow on question is how you intend repaying the mortgage debt if you cannot afford the capital repayments at the current time. As it will become a taller and taller order.

Hucairz

Thanks for your replt:

TMB never issued revised Terms and Condtions - both when I swapped from Interest to repayment and also when going back to interest only. Just a letter confirming payment arrangements both times.

I plan to downsize and use the equity in the property to pay the remaining mortgage. At the moment the house is worth near twice the outstanding mortgage.

Iwant2boptimistic

Hucairz wrote: »

Thanks for your replt:

TMB never issued revised Terms and Condtions - both when I swapped from Interest to repayment and also when going back to interest only. Just a letter confirming payment arrangements both times.

I plan to downsize and use the equity in the property to pay the remaining mortgage. At the moment the house is worth near twice the outstanding mortgage.

Please don't take this the wrong way as I do hope you can sort this out. However for others reading this forum your experience is one which raises an important point as I've noticed it's a common question on these boards about shall I overpay or shall I go onto repayment etc. One of the reasons why I haven't changed to a repayment mortgage and pay the capital and interest is because it becomes contractual. I would rather keep it on interest only and overpay although I do appreciate that one you have to be very disciplined and actually overpay and secondly your mortgage may not have allowed overpayments. Best wishes. Xx