Remortgaged under higher monthly rate based on older higher figure L&Cs broker

Michael9000

Was remortgaging in November as end of fixed term (31st December)

Went with L&Cs  they got me a fixed rate of 5.56% with current lender halifax based on £33800 mortgage left.  I did say to them that i would pay off £1000 before the end of the fixed term.  (I overpay end of each year).   They assured me that this would then reflect a lower monthly rate for my remortgage.  (Notably i have not received revised paperwork to this effect!)

However new deal just started and its on the higher older rate based on the amount before i did the overpayment.  It says in L&Cs policy that if my situation changes e.g. mortgage amount then they always check for better deal.  

I'm left thinking what was the point of paying off £1000 before my fixed term ends if it altered nothing.  I should have just kept the money....

Is it possible to get out of a fixed term deal within e.g. 28 days of it starting? ie a cooling off period? 

amnblog

Are you saying you expected the £1,000 overpayment to reflect in a lower interest rate?

A 28 day cancellation period is available to the client from the point of completion. In your case, it sounds like 'completion' as far as Halifax is concerned would have been 2nd December for 1st January start.

If this is the case, you cannot exit the new rate without penalty.

Hoenir

Michael9000 said:

 They assured me that this would then reflect a lower monthly rate for my remortgage. 

Has there been a misunderstanding. The lump sum payment would reduce your monthly outgoing. This would save you interest over the remaining term of the mortgage. 

kingstreet

When did you make the overpayment? Has Halifax had a chance to adjust anything yet? An overpayment of £1,000 would probably reduce your monthly payment by less than a tenner.

Please use the term rate to refer to the interest rate charged and what you pay as your monthly payment. That way confusion is minimised.

dunstonh

Went with L&Cs  they got me a fixed rate of 5.56% with current lender halifax based on £33800 mortgage left.  I did say to them that i would pay off £1000 before the end of the fixed term.  (I overpay end of each year).   They assured me that this would then reflect a lower monthly rate for my remortgage.  (Notably i have not received revised paperwork to this effect!)

The £1000 overpayment wont have any impact on the rate unless you were borderline between deals based on LTV.  That would be unusual for product transfers.   It may slightly adjust the monthly payment depending on whether you set your monthly payment to remain the same with overpayments (therefore reducing the term) or lower them (therefore keeping the term)

Also, you didn't remortgage.   You did a product transfer.

However new deal just started and its on the higher older rate based on the amount before i did the overpayment.  It says in L&Cs policy that if my situation changes e.g. mortgage amount then they always check for better deal.  

What exactly is the rate difference?  Are you syaing that you are not getting 5.56%?

I'm left thinking what was the point of paying off £1000 before my fixed term ends if it altered nothing.  I should have just kept the money....

The £1000 payment was reduced your term and the amount of interest you will be charged over the term.  Just as most overpayments do.