I think we’re going to go bankrupt…desperate family of 4

amnblog

lojo1000 said:

I agree with the last post. If you're at 83% LTV and assuming you've not missed any payments then you cannot have been in this mortgage long? 

It looks as if Halifax failed to responsibly assess your ability to repay the mortgage under stressed conditions; some might say, normal conditions. (And to be honest, I would not be surprised to see a class action lawsuit against mortgage providers who issued mortgages based on the expectations rates would never move over 5%).

I would be asking Halifax for their affordability assessment calculation done at the time of selling the mortgage to you. Quote Data Privacy laws if they initially say they cannot provide that. That will get them thinking through the issue and if they have made a mistake somewhere, perhaps them taking a closer look might reveal something which can help.

Not sure where you got this idea from.

Lenders are heavily restricted on how they assess affordability, particularly since 2012.

Halifax offers include text like this:

Your income may change. Please consider whether you will still be able to afford your

monthly repayment instalments if your income falls.

The interest rate on this loan can change. This means the amount of your instalments

could increase or decrease. For example, if the interest rate rose to 9.74% your payments

could increase to £1,907.81. The increased amount is made up of the following parts set

out in the 'Main features of the loan' section;

The 'you lent us too much card' would have to be a long shot.

ReadySteadyPop

amnblog said:

lojo1000 said:

I agree with the last post. If you're at 83% LTV and assuming you've not missed any payments then you cannot have been in this mortgage long? 

It looks as if Halifax failed to responsibly assess your ability to repay the mortgage under stressed conditions; some might say, normal conditions. (And to be honest, I would not be surprised to see a class action lawsuit against mortgage providers who issued mortgages based on the expectations rates would never move over 5%).

I would be asking Halifax for their affordability assessment calculation done at the time of selling the mortgage to you. Quote Data Privacy laws if they initially say they cannot provide that. That will get them thinking through the issue and if they have made a mistake somewhere, perhaps them taking a closer look might reveal something which can help.

Not sure where you got this idea from.

Lenders are heavily restricted on how they assess affordability, particularly since 2012.

Halifax offers include text like this:

Your income may change. Please consider whether you will still be able to afford your

monthly repayment instalments if your income falls.

The interest rate on this loan can change. This means the amount of your instalments

could increase or decrease. For example, if the interest rate rose to 9.74% your payments

could increase to £1,907.81. The increased amount is made up of the following parts set

out in the 'Main features of the loan' section;

The 'you lent us too much card' would have to be a long shot.

Non starter really, the lender will always wriggle away and keep themselves in the clear.

lojo1000

amnblog said:

lojo1000 said:

I agree with the last post. If you're at 83% LTV and assuming you've not missed any payments then you cannot have been in this mortgage long? 

It looks as if Halifax failed to responsibly assess your ability to repay the mortgage under stressed conditions; some might say, normal conditions. (And to be honest, I would not be surprised to see a class action lawsuit against mortgage providers who issued mortgages based on the expectations rates would never move over 5%).

I would be asking Halifax for their affordability assessment calculation done at the time of selling the mortgage to you. Quote Data Privacy laws if they initially say they cannot provide that. That will get them thinking through the issue and if they have made a mistake somewhere, perhaps them taking a closer look might reveal something which can help.

Not sure where you got this idea from.

Lenders are heavily restricted on how they assess affordability, particularly since 2012.

Halifax offers include text like this:

Your income may change. Please consider whether you will still be able to afford your

monthly repayment instalments if your income falls.

The interest rate on this loan can change. This means the amount of your instalments

could increase or decrease. For example, if the interest rate rose to 9.74% your payments

could increase to £1,907.81. The increased amount is made up of the following parts set

out in the 'Main features of the loan' section;

The 'you lent us too much card' would have to be a long shot.

"A non-starter".........other than the fact that this is exactly what has happened. The OP has not mentioned any deterioration in their financial income and yet an increase in the mortgage rate has placed them in financial difficulties wrt repaying the mortgage.

So what was in Halifax's calculations when they stress-tested the higher mortgage rate? There is a mistake somewhere if the OP's income has not gone down.

Exodi

berosej said:
our fixed rate is coming to an end on 31 March and we are now being told the lowest repayments we can get on a new deal with be £2150. A £1000 increase per month. We’re at around an 83% LTV.

You say you're being quoted £2,150 for your new deal, which is a £1,000 increase per month on your old deal, ergo your current mortgage payment is £1,150. I couldn't make the Maths work for anything less, it seems reasonable to conclude that you are on a 40 year term. This returns a current interest rate of approx 1.58%.

Using Excel, it looks like Halifax is offering you a rate of approx 5.84% (which returns a monthly payment of £2,250 over 37 years, assuming you keep the term the same). The rate can be improved a bit, I think at most you could save 1% on this, but it's not going to come close to your original payment. Extending the term to 40 years reduces the payment to about £2200. Shaving 1% off the interest rate brings the payment down to £1929. In my experience, reducing the LTV to below 60% made a fairly negligible difference.

Altior

lojo1000 said:

amnblog said:

lojo1000 said:

I agree with the last post. If you're at 83% LTV and assuming you've not missed any payments then you cannot have been in this mortgage long? 

It looks as if Halifax failed to responsibly assess your ability to repay the mortgage under stressed conditions; some might say, normal conditions. (And to be honest, I would not be surprised to see a class action lawsuit against mortgage providers who issued mortgages based on the expectations rates would never move over 5%).

I would be asking Halifax for their affordability assessment calculation done at the time of selling the mortgage to you. Quote Data Privacy laws if they initially say they cannot provide that. That will get them thinking through the issue and if they have made a mistake somewhere, perhaps them taking a closer look might reveal something which can help.

Not sure where you got this idea from.

Lenders are heavily restricted on how they assess affordability, particularly since 2012.

Halifax offers include text like this:

Your income may change. Please consider whether you will still be able to afford your

monthly repayment instalments if your income falls.

The interest rate on this loan can change. This means the amount of your instalments

could increase or decrease. For example, if the interest rate rose to 9.74% your payments

could increase to £1,907.81. The increased amount is made up of the following parts set

out in the 'Main features of the loan' section;

The 'you lent us too much card' would have to be a long shot.

"A non-starter".........other than the fact that this is exactly what has happened. The OP has not mentioned any deterioration in their financial income and yet an increase in the mortgage rate has placed them in financial difficulties wrt repaying the mortgage.

So what was in Halifax's calculations when they stress-tested the higher mortgage rate? There is a mistake somewhere if the OP's income has not gone down.

The OP has evidently overstretched themselves if a return to more typical lending rates has put them under the threat of bankruptcy (with no loss of income). Nothing I have read on this thread so far suggests the lender has any liability for the situation. 

lojo1000

OP:

I expect you have had a good look by now at the Financial Ombudsman website, but for other who face a similar issue here is an excerpt. It sounds to me like your bank should be bending over backwards to ensure they put you on an affordable payment plan.

MWT

lojo1000 said:

OP:

I expect you have had a good look by now at the Financial Ombudsman website, but for other who face a similar issue here is an excerpt. It sounds to me like your bank should be bending over backwards to ensure they put you on an affordable payment plan.

Nothing in that section is going to change the reality of the interest rate being higher, those options just allow for a little breathing space to decide what to do next...

There is no obligation on the bank to make the mortgage payments 'affordable', the changes last year ensured people can fix a future rate a few months out, or can extend their mortgage term to reduce monthly payments, it also has the option to go 'interest-only' for a short time, but that will result in the payments being higher when the period ends, so not really the best choice unless you are selling...

MWT

lojo1000 said:

"A non-starter".........other than the fact that this is exactly what has happened. The OP has not mentioned any deterioration in their financial income and yet an increase in the mortgage rate has placed them in financial difficulties wrt repaying the mortgage.

So what was in Halifax's calculations when they stress-tested the higher mortgage rate? There is a mistake somewhere if the OP's income has not gone down.

The OP already explained where things have gone wrong, and none of that could be said to be the fault of the lender...

berosej said:

we have a mortgage of £409k, after some additional borrowing to complete a two storey extension. Due to delays from illness, planning and a bad experience with a builder, we are not finished. Nowhere near.

we had expected to be finished by now and have the house revalued which (due to the area we live in) would be a significant increase. The house was a two bedroom, and will be four with three baths once done.

This looks like the best advice for the OP so far...

amnblog said:

Sounds like you are under 2% on the current rate. The new rate which is likely to be high 4%'s minimum is clearly going to lead to a much higher monthly payment.

3 things you can do

1. Speak to a broker as you will probably find they can access a wider rate of Halifax rates than you will find direct. Much better for larger mortgages.

2.Try to get a re-valuation from Halifax based on the extra floor space. A valuation over £550,000 will pull close to half a percent off your rate (again, best sorted via a Broker)

3. Consider carefully taking a six month interest only arrangement under the Mortgage Charter