halifax mortgage change?

james3333

hi all,
i have just had a letter from halifax, saying they have chnged their systems and as a result my FIXED monthly amount is going down by £9.40 per month?
anyone know why?
i make regular overpayments but why would this alter the repayment amount?
thanks

ithink

They have recalculated your monthly payment based on the overpayments you have made. Basically as you have overpaid if they didnt recalculated they would collect too much over the remiaing term. The new monthly payment will ensure your mortgage is repaid down to nil (should you just make the new MP and not anymore overpayments!)

One other thing... A fixed interest rate does not mean a fixed monthly payment. Mortgage payments can still be recalculated at an 'event' even if your interest rate doesnt change.

james3333

mmm... but lowering the monthly payment by £9.40 per month is saying to me that the overpayments havent been doing what i want them to do which is to reduce the term of the mortgage??!!

opinions4u

james3333 wrote: »

mmm... but lowering the monthly payment by £9.40 per month is saying to me that the overpayments havent been doing what i want them to do which is to reduce the term of the mortgage??!!

So accept the payment change and set up a standing order for £9.40 a month (or more) to achieve your objective.

james3333

..but for how long have my overpayments, effectively been doing nothing!...my goal is to pay less interest and lower the term ?

opinions4u

james3333 wrote: »

..but for how long have my overpayments, effectively been doing nothing!...my goal is to pay less interest and lower the term ?

Your debt's been reducing.

Interest is calculated daily.

So you've been charged less interest.

james3333

mmm...bit confusing this.....
just cant work out why the payment is now lower then if it has been reducing the balance and its calculated on a daily basis ( sorry for being a bit dim, just dont get it)
.......??!

opinions4u

just cant work out why the payment is now lower then if it has been reducing the balance and its calculated on a daily basis

Because they've moved the management of the account from a Halifax computer system to a Lloyds one. And rebased the monthly payment at the same time.

kingstreet

When you started to make overpayments, did you contact the lender to tell them what you wanted, lower monthly payments, or a reduced term?

james3333

[QUOTE=_And_rebased_the_monthly_payment_at_the_same_time._ [/QUOTE]
afraid i dont get how a change of computer system can lower a fixed reypayment?

kingstreet wrote: »

When you started to make overpayments, did you contact the lender to tell them what you wanted, lower monthly payments, or a reduced term?

yes, i stated i wanted to shorten the term and pay less interest ( cant really see the point of reducing the monthly amout!!??)

kingstreet

I guess some people simply want to pay less.

I know the Halifax system is being changed at the moment. The old A/ roll numbers are being phased-out and being replaced with new LBG numbers.

As has been suggested, if your monthly payment is dropping, simply increase the overpayment you are making to benefit fully from the reduction in term you wish to achieve.