Halifax Not Reducing Term With Overpayment

chanz4

I paid 10% online today, no calls or anything yes they will change payments around july down, however I'm still paying less interest as the capital has now gone down no issue

BikingBud

Hoenir said:

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. 

It doesn't take 90 -120 mins of pressure selling to ensure that the client is still able to meet the payments that were tested, including stress test to a significant figure above current typical interest rates, when the loan was taken out. 

Others will obviously support the efforts of Halifax to ensure that their profits are not impacted too much but many other mortgage providers do not do this.

@Hoenir please can you provide the source reference that instructs this "obligation" 

Hoenir

BikingBud said:

Hoenir said:

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. 

It doesn't take 90 -120 mins of pressure selling to ensure that the client is still able to meet the payments that were tested, including stress test to a significant figure above current typical interest rates, when the loan was taken out. 

Lenders didn't asked to be placed with the burden of duty of care / irresponsible lending etc.  At every opportunity and the whiff of compensation the hounds will start chasing and the bandwagons rolling. 

BikingBud

If they do not want the burden of duty of care then move out of the financial services industry!

But who said anything about irresponsible lending. The loan has already been agreed and is in effect. It has been agreed and stress tested based upon interest at start of loan and with interest a significant jump over that starting rate. Is there the slightest risk that Halifax will recall the loan?

Customers wish to overpay and retain their payments in line with the original mortgage agreement so as to maximise the interest savings they can achieve but the Halifax appear to have dreamt up this oppressive action to "dissuade" those customers.
 
What compensation do you see being claimed other than that to cover the excessive interest that is being forced out of customers!

@Hoenir Can you share the  basis of the obligation or is it just something you mention to put those with legitimate complaints back into their boxes?

The only bandwagon that needs to start rolling is to address why this conduct by the Halifax is considered acceptable. I see far more justification to claim here than I do for car finance interest rate issues.

the_discussion

Hoenir said:

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. 

What regulatory purposes are you referencing exactly? 

A one-off overpayment to reduce the term of mortgage does not involve taking on any additional obligations (in fact it reduces them), so there are no regulations that apply. Other mortgage lenders make this process very straightforward. 

And in what way do you think I am creating a conspiracy theory? All I have done is relayed what happened to us (albeit with some perhaps rather emotive language borne of frustration).

To be clear, at several stages we asked Halifax about the ability to make an overpayment to reduce the term of the mortgage. We received assurances this was "easy", "straightforward" and was "just a phone call". Then, when we go ahead with the overpayment, we are passed from person to person over the phone for about 20 minutes or so, then eventually passed onto a mortgage advisor (salesperson), who told us we had to have a 90 minute meeting or they would not be able to use our overpayment to reduce our term. There was no mention of this requirement beforehand.

The main point of the meeting appeared to be to try to get us to purchase life insurance / critical illness cover from Halifax. The sales tactics used to push this were aggressive and the 'advisor' we dealt with did everything within their power to make the meeting as long and painful as possible. 

From my experience of the process, I cannot believe that anything about this was done for regulatory purposes. These are clear underhand tactics to stop mortgage terms being reduced, which would negatively impact the bank's income stream (and positively impact mine!).

We are on a fixed term mortgage for a few more years, but as soon as we are able to do so, we shall be moving to a different provider.

fozzie55

Just to re-emphasise what happened to us (still bitter ). When we took out our mortgage with Halifax, we specifically asked that any overpayments we made would reduce the term, not the monthly payments. We wanted to finish the mortgage before retirement, paying the same monthly payments. They said of course our term would be reduced. This never happened, they wanted to recalculate our monthly payment down and keep the term the same unless we had this re-mortgage application meeting!

Hoenir

BikingBud said:

If they do not want the burden of duty of care then move out of the financial services industry!

The world changed after the GFC and the subsequent Mortgage Market Review.  We live in a world where people expect compensation by default. As a consequence lenders changed their internal policies. 

If you don't like Financial Services Industry. Don't borrow. Just use cash that you've saved. 

BikingBud

Hoenir said:

BikingBud said:

If they do not want the burden of duty of care then move out of the financial services industry!

The world changed after the GFC and the subsequent Mortgage Market Review.  We live in a world where people expect compensation by default. As a consequence lenders changed their internal policies. 

If you don't like Financial Services Industry. Don't borrow. Just use cash that you've saved. 

Interesting that you have selected the simple throw away comment rather than trying to comment upon the regulatory obligation. People do not want compensation, people want to be treated fairly and with openness and consistency without having to perpetually fight the banker!

As you haven't been able to respond to:

@Hoenir Can you share the  basis of the obligation or is it just something you mention to put those with legitimate complaints back into their boxes?

I can only surmise you were not able to find anything or felt that your did not need to!

Perhaps you should consider the following:

The Duty requires firms to act to deliver good outcomes for retail customers. Firms must act in
good faith towards customers, avoid causing them foreseeable harm, and enable and support
them to pursue their financial objectives. Firms should consider the diverse needs of their
customers – including those with characteristics of vulnerability 

and

A key part of the Duty is that firms are able to define, monitor, evidence and stand behind the
outcomes their customers are experiencing (chapter 10). This monitoring must enable firms to
identify where customers, or groups of customers, are experiencing poor outcomes, and where
this is the case firms must take appropriate action to rectify the situation.

An outcome that is not in the customer's interest is not applying the overpayment to bring about a reduction in the loan term, in fact forcing them to pay more interest.

You may wish to review the whole document rather than than just the covering letter: fg22-5.pdf

Hoenir

And the relevance to the opening post is? 

BikingBud

Hoenir said:

And the relevance to the opening post is? 

The link seems quite obvious, the OP has a complaint about how they have been treated by Halifax. 

Initially you tried to slam the OP asserting there were no grounds for complaint, and more recently you characterised the legitimate objections raised by customers as "conspiracy theories".

Recent direction from the FCA requires that financial firms ensure the outcomes are in the customers' best interest.  It would appear that Halifax are not operating in the customers' best interest, one might reasonably deduce that is why they have back pedalled when customers have been clear, robust and persistent in their position. Did you read that FCA direction by the way?

It seems that in the absence of a demonstrable lenders obligation and despite a number of customers having been subject to the 90 minute hard sell but getting the outcome they intended, you now want to try and divert rather than provide any evidence.

Do you work for Halifax?