Halifax Not Reducing Term With Overpayment

WhiteCircle

fozzie55 said:

Little_bit_taller said:

Little_bit_taller said:

Did you let them know you wanted to reduce the term before making the overpayments? It has to be registered on your account overwise it will just reduce your monthly payment although for you this doesn't seem to be happening either.

I am finding that more lenders are bringing the overpayment functionality into their banking apps. I have my mortgage with Santander and they have just updated this functionality and you can chose to reduce term or reduce monthly payment amount.

You said you let them know that you wanted to reduce the term at application stage but have you done it anytime since? I ask because I have checked multiple times with my lender, Santander, just to check for my sanity! I do this so calls are recorded should anything go wrong but so far so good although I am sure I had to correct them at one point because they had it as reduce the monthly payment.

As our payments didn't change in the second year I just presumed everything was ok. It was only in December, starting our 3rd year of the mortgage, that they reduced the monthly payment. The person on the phone at Halifax said it was due to all banks changing their mortgages last August with the cost of living crisis and Government / Bank of England intervention. He said they have had a lot of complaints.

I'm chilled about it now, my overpayments have still reduced the mortgage and I will pay it off before the original end date.

We just reduced our mortgage term by 2 years with an overpayment to Halifax. However, it wasn't simple. It involved a 90-minute online meeting with one of their Mortgage and Protection Advisors. To schedule this 'interview' (Halifax called it that) I had to call:0345 8503705.

As we have a joint mortgage, we both had to be present throughout the call. We had to supply details of our income and outgoings etc. and hear a sales pitch on their Life and Critical Illness insurance. Afterwards, all we had to do was accept their 'proposal' online and each upload our most recent payslip. Hope this info helps.

BikingBud

WhiteCircle said:

fozzie55 said:

Little_bit_taller said:

Little_bit_taller said:

Did you let them know you wanted to reduce the term before making the overpayments? It has to be registered on your account overwise it will just reduce your monthly payment although for you this doesn't seem to be happening either.

I am finding that more lenders are bringing the overpayment functionality into their banking apps. I have my mortgage with Santander and they have just updated this functionality and you can chose to reduce term or reduce monthly payment amount.

You said you let them know that you wanted to reduce the term at application stage but have you done it anytime since? I ask because I have checked multiple times with my lender, Santander, just to check for my sanity! I do this so calls are recorded should anything go wrong but so far so good although I am sure I had to correct them at one point because they had it as reduce the monthly payment.

As our payments didn't change in the second year I just presumed everything was ok. It was only in December, starting our 3rd year of the mortgage, that they reduced the monthly payment. The person on the phone at Halifax said it was due to all banks changing their mortgages last August with the cost of living crisis and Government / Bank of England intervention. He said they have had a lot of complaints.

I'm chilled about it now, my overpayments have still reduced the mortgage and I will pay it off before the original end date.

We just reduced our mortgage term by 2 years with an overpayment to Halifax. However, it wasn't simple. It involved a 90-minute online meeting with one of their Mortgage and Protection Advisors. To schedule this 'interview' (Halifax called it that) I had to call:0345 8503705.

As we have a joint mortgage, we both had to be present throughout the call. We had to supply details of our income and outgoings etc. and hear a sales pitch on their Life and Critical Illness insurance. Afterwards, all we had to do was accept their 'proposal' online and each upload our most recent payslip. Hope this info helps.

So you have to sit through their sales pitch?

Did you ask them to compare the potential for increase in payment to the already assessed and approved figure for the stress test, mine goes up to 9.0%, in their mortgage proposal and ask them why that was no longer valid?

None of this happens when you change jobs, or buy a car, or go on holiday so why is it deemed necessary when you decide to take a chunk, that may have come from many sources, off your mortgage?

hallers

The same thing happened with me, they are looking to maintain the full term of the mortgage (30 years) despite the fixed agreement (5years).
Depending on the % rate you took the fixed period at you may be better putting the reduction amount into a savings account and earn more interested than you’d be saving by putting into the mortgage at a lower rate! 

CC1234GG

WhiteCircle said:

We just reduced our mortgage term by 2 years with an overpayment to Halifax. However, it wasn't simple. It involved a 90-minute online meeting with one of their Mortgage and Protection Advisors. To schedule this 'interview' (Halifax called it that) I had to call:0345 8503705.

As we have a joint mortgage, we both had to be present throughout the call. We had to supply details of our income and outgoings etc. and hear a sales pitch on their Life and Critical Illness insurance. Afterwards, all we had to do was accept their 'proposal' online and each upload our most recent payslip. Hope this info helps.

We have just encountered the same problem.  We paid a lump-sum overpayment in January to cover the maximum 10% for 2024.  A few days ago we received our annual statement telling us our monthly payment was being reduced.  We have overpayed up to the maximum in the past two years (we are now on year 3 of a 5 year fixed term) and this has not happened.  When we called they said we could not increase the monthly payment back to the original amount as that would in effect be an overpayment, which would take us over the 10% overpayment allowance and incur a penalty.   I calculated that, on a lower monthly payment, we will be paying approx 2.5k less across the year than we'd previously been allowed to (when you combine the reduced monthly amount with with the initial overpayment, compared to the higher original monthly amount).   We made our lump sum overpayment on the basis that we planned to clear a certain amount in the mortgage in 2024, and Halifax have reduced the amount we can pay this year unilaterally.

We've also been told that the only work around is to have this interview with Halifax.  We were assured that it would not incur another arrangement/application fee, or a change in the agreed interest rate for the rest of the fixed term.  @WhiteCircle I hope this is correct and you weren't charged extra, and your interest rate stayed the same?

CC1234GG

In case anyone would like an update on this, we had an hour and half call but we did get the mortgage term reduced with no change to the "product" (the fixed rate, its remaining term and the interest rate) and no product arrangement fee.  So while we could have done without having to give all our details all over again, it's sorted for now.

BikingBud

I said before it is clear that some lenders are supportive of borrowers wishing to shorten the term within the agreed T&Cs, whilst I feel there are a number of mortgage providers that fear they are losing out and are trying to realign their income curves.

enyfeo

The biggest issues I have with this is that:

The review should not force your rates down. It should be optional.

You should not have to go through a 90 minute affordability setup if you are only wanting to maintain what was already affordable at the time of taking the mortgage.

I had 7 days notice our rate would change as their letter took 21 days to arrive.
They could not schedule me an appointment before the next reduced payment takes place.

WhiteCircle

CC1234GG said:

WhiteCircle said:

We just reduced our mortgage term by 2 years with an overpayment to Halifax. However, it wasn't simple. It involved a 90-minute online meeting with one of their Mortgage and Protection Advisors. To schedule this 'interview' (Halifax called it that) I had to call:0345 8503705.

As we have a joint mortgage, we both had to be present throughout the call. We had to supply details of our income and outgoings etc. and hear a sales pitch on their Life and Critical Illness insurance. Afterwards, all we had to do was accept their 'proposal' online and each upload our most recent payslip. Hope this info helps.

We have just encountered the same problem.  We paid a lump-sum overpayment in January to cover the maximum 10% for 2024.  A few days ago we received our annual statement telling us our monthly payment was being reduced.  We have overpayed up to the maximum in the past two years (we are now on year 3 of a 5 year fixed term) and this has not happened.  When we called they said we could not increase the monthly payment back to the original amount as that would in effect be an overpayment, which would take us over the 10% overpayment allowance and incur a penalty.   I calculated that, on a lower monthly payment, we will be paying approx 2.5k less across the year than we'd previously been allowed to (when you combine the reduced monthly amount with with the initial overpayment, compared to the higher original monthly amount).   We made our lump sum overpayment on the basis that we planned to clear a certain amount in the mortgage in 2024, and Halifax have reduced the amount we can pay this year unilaterally.

We've also been told that the only work around is to have this interview with Halifax.  We were assured that it would not incur another arrangement/application fee, or a change in the agreed interest rate for the rest of the fixed term.  @WhiteCircle I hope this is correct and you weren't charged extra, and your interest rate stayed the same?

We weren't charged extra and our interest rate remained the same.

the_discussion

We had the same problem. Frankly, it is awful. 

From our experience, I would highly recommend folks to stay away from Halifax as a mortgage provider if you wish to make overpayments and have control over how they impact your mortgage.

We had a previous provider - Nationwide - who were excellent. You could do it all online on the app and you selected how the overpayment worked (reduce term or reduce monthly payments). It took seconds.

We switched to Halifax around a year ago. When we joined we checked that it was possible to make overpayments to reduce the term and received assurance that it was indeed straightforward. 

Ahead of making an overpayment, we again clarified online and over the phone, that we would be looking to reduce the term. We were told it's easy. Just phone up after making the payment. 

It is all lies.

Eventually, after a prolonged phone call, we discover that they insist on forcing you through a meeting with a mortgage advisor lasting 90 minutes. They shove unwanted marketing down your throat throughout the whole experience, often using very high pressure tactics to try to get you to commit to new life insurance or critical illness cover etc. They insist on going through all your finances, pay etc even though the amount you pay per month is not changing and you are taking on no additional obligations. The whole process took about 2 hrs of our time, both of us.

And if we want to make future overpayments we will have to do the same thing all over again!

Of course it is deliberately done to protect their income stream.

Honestly, I shall be looking to switch out of our Halifax mortgage at the earliest opportunity. 

Hoenir

the_discussion said:

We had the same problem. Frankly, it is awful. 

From our experience, I would highly recommend folks to stay away from Halifax as a mortgage provider if you wish to make overpayments and have control over how they impact your mortgage.

We had a previous provider - Nationwide - who were excellent. You could do it all online on the app and you selected how the overpayment worked (reduce term or reduce monthly payments). It took seconds.

We switched to Halifax around a year ago. When we joined we checked that it was possible to make overpayments to reduce the term and received assurance that it was indeed straightforward. 

Ahead of making an overpayment, we again clarified online and over the phone, that we would be looking to reduce the term. We were told it's easy. Just phone up after making the payment. 

It is all lies.

Eventually, after a prolonged phone call, we discover that they insist on forcing you through a meeting with a mortgage advisor lasting 90 minutes. They shove unwanted marketing down your throat throughout the whole experience, often using very high pressure tactics to try to get you to commit to new life insurance or critical illness cover etc. They insist on going through all your finances, pay etc even though the amount you pay per month is not changing and you are taking on no additional obligations. The whole process took about 2 hrs of our time, both of us.

And if we want to make future overpayments we will have to do the same thing all over again!

Of course it is deliberately done to protect their income stream.

Honestly, I shall be looking to switch out of our Halifax mortgage at the earliest opportunity. 

Lenders are obliged to go through this process for regulatory purposes. Conspiracy theories born out of frustration help no one.