Halifax Mortgage Sub-Accounts increased recently?

Goldiegirl

It must be really frustrating trying to get an answer.

There used to be people with the long term experience and knowledge who would have been able to get to the bottom of all this ...... but in the redundancies 3 - 4 years ago, all that experience took early retirement.

That's why I'm sitting here with my feet up with my cup of coffee, instead of sorting out all the queries this account migration has caused.

They do seem to have made a pig's ear of it all

It's not much help to you, but I feel your pain

towns

Have you had any further joy on this?

Thanks!

Notjustamum_2

None of the Halifax staff seem to know what is going on with these sub accounts. As of statement arriving in March, my sub account 1 was £54000 on an interest only basis with 4 months to pay; sub account 2 was £250 on repayments basis with 4 months to pay; sub account 3 was £10 on an interest only basis with 9 years to pay; sub account 4 was £23K ish on a repayment basis with 9 years to pay. My I instant issue was with that stray £10. Why would I "borrow " £10 on an intst only basis and pay interest on it for the last 10 years? It took me until the end of June to get an answer which was basically "we have no idea so we've cleared the outstanding £10 from your account", of course they didn't repay the (admittedly paltry) interest I've been paying on it for 10 years. In the process of checking all this we also discovered that we had been overpaying by £190 per month since we came off a fixed rate deal about 5 years ago. Our payment should have increased but not by that amount. I know that it means the outstanding amount has gone down a bit quicker but there have been times when that £190 would have made a big difference to our monthly living (especially since my husband was our sole provider until early this year when we decided the children were old enough for me to go back to work).

Anyway we now want to clear not only the interest only part that should have been paid off in July but the whole mortgage with the additional proceeds of our endowment policy. Halifax simply aren't playing - they keep telling me they can't give me a redemption figure. They have even tried tell asking me that if. Took my endowment out in 1988 (which I did) then it won't be enoug to clear the original 54k let alone the rest (which it is with a lot left over). We just want to pay this awful organisation off and be mortgage free but they just don't want to lose our nice juicy interest payments. Might have to get the ombudsman involved.

I other words - avoid the Halifax at all costs

Notjustamum_2

I do apologise for the typos in that last post. iPad auto correct really does make senseless changes sometimes.....

towns

Anyone else had any joy?! They still can't explain it!!

tp1234

I spoke to Halifax a little while ago about this and like other people sub account 02 is the outstanding balance and is correct (as far as I can see) and sub account 98 is just under £245 at 0%which is the mortgage account fee.

I queried why this hadn't reduced by anything despite having the mortgage for over a year and was told the following... When they moved on the the Lloyds system they couldn't work out how much people had paid from this sub account 98 at 0% so started everybody at £245 0% again minusing from the overall balance. This worked in my favour as my payment dropped by 2p despite not having made any OPs this is because my £245 had perhaps dropped to £240ish so had £5 or so taken from my balance and put at 0%..... Did other people see the same small drop in mortgage payments? (I'm fixed rate btw)

I was happy enough with that explanation as is saved me 2p per month and with roughly 39years left on the mortgage has saved me tenner!!

I have started making OPs and have looked at accounts bit closer and can see same problem as other people with sub account 01 (initial mortgage fee) which was £999 so should now be less than that as haven't missed any payments etc. However it's showing at £1280 ish my overall balance is correct (I think) so I don't feel like anything has been added but not sure where it has come from?

I shall be calling Halifax over the weekend but like other I expect I'll be told that i'll get a call in 10 days.

I hope I have helped clear up sub account 98 for some people!

karvala

I think some the confusion here arises from several sources: (1) Some people (such as the OP) certainly appear to have been incorrectly charged; (2) Halifax staff have absolutely no clue how mortgage payments are calculated, and are not interested in helping customers at all; (3) When the switch to the Lloyds systems was made, they actually changed the way the account fee is handled but didn't bother to tell anyone.

Basically, if you have a standard repayment mortgage, you'll have three sub-accounts:-

01 - This contains any product fee you owe. Interest IS payable on this.
02 - This is the main loan advance (i.e. the amount you actually wanted to borrow). Interest is obviously payable on this as well.
98 - This is the account fee. There should be 0% interest on this.

Under the old Halifax system, sub account 98 (the account fee) was only payable at the END of the mortgage, so right down to your last month you would still owe £245 (or whatever your account fee was) on this sub account. The other two sub accounts were cheerfully lumped together and interest calculated on them together.

When they moved to the Lloyds systems, they did the following:-

(1) Sub accounts 01 and 02 were properly split; previously they calculated them together but only showed them separately. Now they calculate them separately. That doesn't make any difference in practice, but it's likely that in cases where a product fee (sub account 01) is incorrect, it is as a result of this.

(2) Sub account 98 is now paid monthly, so from March 2013 onwards you should see payments being made towards this sub account. That is also the reason this sub account appeared to show the full balance immediately after the change - it actually WAS at the full balance at that point because the old Halifax systems didn't put your payments towards it, as a matter of policy.

It should be noted that the change to the handling of sub account 98 is actually AGAINST customer's best interests, and will cost everyone some money in the longer term. Previously, Halifax adopted best practice (albeit with incredibly shoddy reporting) of putting payments towards accounts which attracted interest, thereby reducing the balance and amount of future interest that needs to be paid. Now, Lloyds are using some of your monthly payment to pay off a 0% account instead of an interest-attracting account, with the result that the other account balances will be slightly higher and attract fractionally more interest next month.

On a month-to-month basis that won't be a big amount, but over the lifetime of a typical sized mortgage that could easily be £500 or more. That they have made this change without customers consent or even telling them is disgraceful, and in my opinion open to legal challenge.

I hope that clarifies the situation for some people. If you think you've been overcharged by the Halifax, particularly in respect to mysterious increases in sub account 01 (the product fee account), I would suggest:-

(1) Check the combined balance of sub accounts 01 and 02. If these together match the pre-change balance on sub account 02 (minus any payments, plus any interest of course), then you haven't been overcharged, they just screwed up which accounts they sent stuff to.

(2) If the combined balance doesn't match, then make an official complaint asap, and take it to the ombudsman as soon as possible. It's only by mass action that these pirates will be held to account.

michelleion

karvala wrote: »

I think some the confusion here arises from several sources: (1) Some people (such as the OP) certainly appear to have been incorrectly charged; (2) Halifax staff have absolutely no clue how mortgage payments are calculated, and are not interested in helping customers at all; (3) When the switch to the Lloyds systems was made, they actually changed the way the account fee is handled but didn't bother to tell anyone.

Basically, if you have a standard repayment mortgage, you'll have three sub-accounts:-

01 - This contains any product fee you owe. Interest IS payable on this.
02 - This is the main loan advance (i.e. the amount you actually wanted to borrow). Interest is obviously payable on this as well.
98 - This is the account fee. There should be 0% interest on this.

Under the old Halifax system, sub account 98 (the account fee) was only payable at the END of the mortgage, so right down to your last month you would still owe £245 (or whatever your account fee was) on this sub account. The other two sub accounts were cheerfully lumped together and interest calculated on them together.

When they moved to the Lloyds systems, they did the following:-

(1) Sub accounts 01 and 02 were properly split; previously they calculated them together but only showed them separately. Now they calculate them separately. That doesn't make any difference in practice, but it's likely that in cases where a product fee (sub account 01) is incorrect, it is as a result of this.

(2) Sub account 98 is now paid monthly, so from March 2013 onwards you should see payments being made towards this sub account. That is also the reason this sub account appeared to show the full balance immediately after the change - it actually WAS at the full balance at that point because the old Halifax systems didn't put your payments towards it, as a matter of policy.

It should be noted that the change to the handling of sub account 98 is actually AGAINST customer's best interests, and will cost everyone some money in the longer term. Previously, Halifax adopted best practice (albeit with incredibly shoddy reporting) of putting payments towards accounts which attracted interest, thereby reducing the balance and amount of future interest that needs to be paid. Now, Lloyds are using some of your monthly payment to pay off a 0% account instead of an interest-attracting account, with the result that the other account balances will be slightly higher and attract fractionally more interest next month.

On a month-to-month basis that won't be a big amount, but over the lifetime of a typical sized mortgage that could easily be £500 or more. That they have made this change without customers consent or even telling them is disgraceful, and in my opinion open to legal challenge.

I hope that clarifies the situation for some people. If you think you've been overcharged by the Halifax, particularly in respect to mysterious increases in sub account 01 (the product fee account), I would suggest:-

(1) Check the combined balance of sub accounts 01 and 02. If these together match the pre-change balance on sub account 02 (minus any payments, plus any interest of course), then you haven't been overcharged, they just screwed up which accounts they sent stuff to.

(2) If the combined balance doesn't match, then make an official complaint asap, and take it to the ombudsman as soon as possible. It's only by mass action that these pirates will be held to account.

I am so happy i have found this forum, and have the exact same thing happen to me, and the above quote is correct!

The halifax are making out that they are doing all their customers a favour by reducing their mortgage payments and also paying off the £245.00 in sub account 98.
which when i added up the interest this 0% fee would cost me in 10 years it was 100% mark up of over £260.00 as they were taking it off what i was paying on my mortgage.

I complained about the letter back in march 2013 and am currently still trying to get a correct balance of what I actually owe.

I CAN GUARANTEE EVERYONE WHO IS EFFECTED HAS NOT HAD A CORRECT ANNUAL STATEMENT SINCE THEY TOOK THE MORTGAGE OUT! I have had this confirmed to me by the halifax,

Another interesting conversation i had with the BUSINESS DEVELOPMENT MANAGER, Kristian Palmer.
was that in fact they are aware that the 0% £245.00 service fee, can no way be classed as 0% as they are taking money off your main debt that incurs interest to pay it off!! needless to say that after i pointed out Legal implications and fraud and also mis selling of a service product (which is what the mortgage administration fee is, it provides a service of maintenance on the account) and the fact that they cant even send me an up to date correct statement they cannot full fill the products purpose.
He could not apologise enough and promised a full reconstruction of the whole mortgage since 2008 when it was taken out. within 14 days (still waiting since july) he also said he would wipe off the £245.00 fee from my account. (trying to make out he was doing me a favour)

when I added up all f my annual statements I had £544.00 added to my capital and interest figure since 2008.
I realised that this was made up by the following:

this was mage up of £299.00 (product fee already paid off and not been taken off the mortgage, sub account 1 total in match 2013= £458.00
plus £245.00 mortgage administration fee which should have been separate all along from the main mortgage.
basically not only are the halifax making out they are helping their customers by paying off the £245.00 and robbing them blind, they have also prior to march been charging you interest on it anyway by adding it to your main mortgage.

this is nothing short of robbery and the fact that i thought i was the only one who had the mortgage product fee problem (paying it at the start and them not taking it off) they made out it was a one of error!!!

I have spoken with the ombudsman and to be quite honest I think its a waste of time! it will take months and after taking 2 other complaints to them regarding the same mortgage I feel it will be a waste of my time.
Instead I am going to the national news papers and a solicitor for compensation.
A solicitor has already confirmed to me they have broken the law and we would be entitled to compensation for the terrible customer service and financial detriment they have put me in.

has anyone gone any further with this yet? im starting the process today and wanted some feedback first.
thanks
michelle

ithink

I think a lot of this is people at the Halifax trying to explain things they do not understand.

I got a clear explanation as to how they reworked my mortgage following the move to the new system and what Karvala said back this up...

Basically the following applied.

My account with the Halifax was made up on a main loan and further advance and a service loan or (fees). Ive rounded my figures up to make it a bit easier... £125k main £15k FA and £1200 fees The Mortgage Account Fee(MAF) which i was charged £245 was on an interest free basis but was included in the £1200 but as they couldn't make this interest free on its own they added a product to my mortgage with a 0% rate allocated to £245 of my balance. So in effect even though my service loans was being repaid/reduced including the MAF fee i was still benefiting from a 0% amount of £245. To my benefit!

When they changed systems the fees went to sub account 1, an amount equivalent to the MAF went to sub account 98, my FA went to sub 2 and the main sub 3. Basically reversed it!

So this meant even though i have been reducing down my MAF fee they still gave me an amount equivalent to £245 interest free to save time working out every customers mortgage as Kavala stated. Remember Ive never paid interest on this and wont in the future. Im happy with that!

Any new fees that will be added to the mortgage in the future (if i get any) will be added to the new fees sub account which is number 99.
So they reversed how my mortgage was previously to ensure i continue to pay the same. It was explained as follows.

My fees amount of £1200 included my MAF £245 this went to sub account 1. This has now got a product allocated to it and therefore WILL get interest accrued. Therefore they pulled out £245 from my other debt and added this to sub account 98 with an interest free product attached to it for the full term of my mortgage. Note even though i have the amount of the £245 in sub 1 my main debt has been reduced £245 to create the sub account 98 so i haven't been charged twice and i will still continue to have £245 interest free! Phew that took some explaining...

Hope you are following all this! it took several phone calls and letters to get this information and im quite familiar with mortgages so although this may make sense to me i may be losing a few of you! apologies if so...
Next they then have to take the remaining balance they haven't allocated this being the Main mortgage amount (less the £245) and the further advance £15k these have been allocated into their own sub accounts.

Personally i think its clearer to me now and can see the split and what bit of my payment is going to what.. i like the detail on the internet banking.

chen88

@ithink ...i have the same prob as others on this site and wont be mislead by anyone who tries to explain otherwise - people need to wisen up and pursue this relentlessly ignoring those who have been hood winked by the Halifax and others. I am due an opinion from the ombudsman adjudicator handling my complaint - by the end of this week so will try and keep you guys posted, i plan to take this up though the small claims court (as i don't trust the ombudsman is independent as it wants to be seen/has a hidden agenda - i am a first time user of that service and first time i have ever posted online to complain about an issue). for those who dont want to take court action for breach of contract for various reasons, try your only friend at this time which is the ombudsman service here is their free phone number 0800 0234 567 (which they like to keep hidden - only comes through in some paperwork when dealing with them after registering your complaint)