Halifax won't let us move off the variable rate

kcseb

Dear all

We have an interest-only mortgage with Halifax on our residential property. Took it out 12 years ago and as house prices have moved up a lot since then, LTV is under 60% now. Realistically we'll sell and downsize in 3-5 few years.

Anyway according to the T&Cs, we can stay on their SVR for another 8 years, until the end of the term as interest-only. However they're refusing to let us move to a fixed-rate product, which would save us heaps of money: they're not happy with our repayment vehicle (which is debatable, especially as we have a lot of cash savings that they're not accounting) and are saying we have to go onto a repayment mortgage for the fixed rate.

This makes absolutely no sense: the repayment vehicle should be irrelevant since we can stay on the SVR as interest-only anyway, according to their T&Cs. And surely if they're worried about affordability or repayment, going onto a lower fixed-rate would HELP the issue? It's mind-boggling.

Does their reasoning stack up, and under MMR are they in the right?

Best

K

lee111s

Why not remortgage to another lender?

A broker will know where best to place your applications.

kcseb

Thanks for this. We are stuck with Halifax, particularly due to age of people on the mortgage (also hence why we'll downsize soon).

The principle of it I find mind-boggling: you can stay on interest-only on the higher SVR till the end of the term, but not move to a lower (read: safer, more affordable) fixed rate.

ACG

There is nothing under MMR changes that would impact upon whether they should offer you a new deal or not.

They do not have to offer you a new deal, their only commitment to you when you took out the deal was that at the end of the tie in period you would be put on the SVR.

You cant force them to offer you a fixed rate, so you have the choice go on to repayment and get a fixed rate on stay on i/o on the SVR. It doesnt sound like affordability has even been discussed as a potential issue.

kcseb

Thanks AGC. Affordability has been discussed, and proved that we can afford it. It's the repayment vehicle that they're disputing (equity in other assets).

FYI MMR is relevant, as per the below from the FCA website re MMR. Also see the bit in red which should be in our favour right?

- Lenders are still allowed to grant interest-only loans, but only where there is a credible strategy for repaying the capital.

- There are transitional provisions in the MMR that allow lenders to provide a new mortgage or deal to customers with existing loans who may not meet the new MMR requirements for the loan.

I still cannot understand how an argument of 'we're worried you can't repay so stay on the much higher SVR' is a logic or consistent one.

ACG

But you do meet the new mmr rules, you can afford the mortgage now and on repayment.

Annisele

I think ACG is right, and MMR isn't relevant. Halifax is allowed to offer you a new deal - but apparently it doesn't want to unless you switch to repayment.

Staff in some lenders seem to be using "new MMR rules" as an answer to everything - the catch-all excuse used to be data protection, but now it seems to be MMR.

I can see why you're annoyed, but ultimately you can't force Halifax to lend to you on the terms you want (i.e. fixed deal plus interest only).

Thrugelmir

kcseb wrote: »

Thanks AGC. Affordability has been discussed, and proved that we can afford it. It's the repayment vehicle that they're disputing (equity in other assets).

What type of investments?

kcseb

Thrugelmir wrote: »

What type of investments?

Hey - it's equity in other property

Funny_old_game

They will use 80% of the equity in any UK based properties that is not your primary residence and that these properties are in the names of the people on your mortgage

ie £20000 equity in a BTL, they will use £16000. If your mortgage I'd £16000 or less you can stay on int only.

kingstreet

Have you tried to do it online?

If you do it over the phone, or via a branch it's part of an advised process.

Online is execution only.

However, I don't know if IO borrowers have the online option. Try it.