Mortgage rate change...should this really mean a new mortgage application?

KevinM

Hi,

I am a little confused after my chat with the Halifax earlier today...

I have a mortgage already with them, and I was on a fixed rate 2yr deal...there are 8 years left on the mortgage, but I got a letter a few days ago telling me that my fixed rate (1.99%) was coming to and end in a few weeks, and that I would automatically go onto a variable rate of 4.24%

So, I phoned them up just to get another fixed term deal put in place, as the 4.24 variable rate was going to increase my mortgage payments by £300...

Basically, I was told that I have to go through a complete application process again (even though I have a mortgage) to see my affordability etc...They want to see payslips, expenditure, savings details etc...

I did all of this 2 years ago when I took the mortgage out with them...all I want is a fixed term deal on my current mortgage, but they said that rules have changed, and any request for a rate change now must go through an application, as though applying for a new mortgage...

I did point out the irony to them that if they say I cannot afford a mortgage with them at 1.99%, then how can they be happy for me to go onto their 4.24% rate?

Is this how mortgage rate changes go now? I never had to do any of this for previous end of deal rate changes for mortgages already in place...I simply telephoned them, and they told me what rates/durations were available and I chose one.

It seems a very odd way of doing things, but the lady said it was to protect them, and me...

Any thoughts?

Thanks...

getmore4less

Don't they offer a on line product switch.?

Halifax are not a good long term lender you may be better leaving them anyway.

KevinM

I don't know if things have changed, but if I go online to look, the system (for existing mortgage customers) says this:

"You can switch your new deal online, in branch or over the phone. Whichever way you apply, the same deals will be available"

So, it would seem that whatever way I approach it, whether on the phone or online, it involves a new application...

Very weird...

kingstreet

Is there something unusual here, such as lending into retirement, or interest-only?

Do you have a 10/-- account number or roll number or do you still have a A/-- number?

KevinM

Yes, I have a 10... mortgage account number, but it is an interest only mortgage...

Does that make a difference?

kingstreet

KevinM wrote: »

Yes, I have a 10... mortgage account number, but it is an interest only mortgage...

Does that make a difference?

Yep. Interest-only lending is carefully monitored so you can expect similar at every renewal.

KevinM

So, out of interest, if the Halifax deem that I cannot afford my mortgage (as it stands as an interest only mortgage) can they theoretically take it off me?

kingstreet

KevinM wrote: »

So, out of interest, if the Halifax deem that I cannot afford my mortgage (as it stands as an interest only mortgage) can they theoretically take it off me?

No. If they can see you cannot afford it, they will still allow you the product transfer.

If it appears affordable, they may make the product transfer conditional on some/all of the mortgage being converted to repayment.

The latter is from a few years ago and may have changed.

KevinM

Thanks...I can afford it, but sometimes a customer's version of Can Afford, and a mortgage company's Affordability criteria are substantially different...

Anyway, I have gone through the application, and was told I should hear back sometime next week...

What a palaver...

Thanks