Halifax reducing monthly payments on a mortgage

thewarmcoconut

Hello,

Not sure if anyone else is experiencing this but I regularly overpay every year on my mortgage with Halifax. This year they have decided because I have overpaid they are going to decrease my mortgage payments so that my mortgage will still last the same amount of time. I am on a fixed rate mortgage and I feel like them doing this defeats the whole purpose of overpaying every year. 

I contacted them asking them not to reduce it and they said it is company policy to do this ever year now and if I want I can change my payment back but I will be charged an over payment fee as I have reached the 10% limit already. 

Is there anything I can do about this? They only gave me a months notice but they said they sent a letter out in December explaining the changes but it doesn't seem right to me. I agreed to pay a certain amount over a certain period and they think it is ok to lower this when ever they want but I can't raise it when ever I want. I feel like it makes more sense to do their adjustments when my fixed term ends.

Sorry about the rant it is just really frustrating as the only way to change it back seems to be a mortgage review and without a job I can't change back to the original amount even though I know I can afford it.

la531983

Ask them to reduce the term.  Failing that, shove the difference into an ISA and pay it off in bulk once the current restriction ends.

thewarmcoconut

I have the money to pay off the mortgage once the term comes to end next year, I was just wondering if it worth taking this to an ombudsman as I never asked for the reduction in monthly payments and I can't reduce the term because I can't prove my income at the moment. 

For me it doesn't make much difference as the balance is so low but for others it would mean that they are paying a lot more of interest in the long term and they say its in the customers interest but it is not.

Bargainhunter30

I'd ask to speak to someone else for a second opinion to ensure thos is correct and if so take it to someone more senior.

400ixl

thewarmcoconut said:

I have the money to pay off the mortgage once the term comes to end next year, I was just wondering if it worth taking this to an ombudsman as I never asked for the reduction in monthly payments and I can't reduce the term because I can't prove my income at the moment. 

For me it doesn't make much difference as the balance is so low but for others it would mean that they are paying a lot more of interest in the long term and they say its in the customers interest but it is not.

You have entered into a fixed term contract, if you over pay, they cannot change the length of the term so they have to change the payment amount in order to continue with the terms of the contract.

There is nothing to take to the ombudsman as the terms of the contract you willingly agreed to are being adhered to.

You may have some complaint against your mortgage broker (if you used one) if you described that you wanted to overpay and have the term reduced and not the payment amount and they didn't explain what you were buying from them.

It is a simple case of not reading / understanding what the terms of the contract are. Unfortunately it happens more often than it should, which could say the contract should be clearer or people should be more observant.

Edi81

Just keep Overpaying! It’s really no big deal. 

thewarmcoconut

400ixl said:

thewarmcoconut said:

I have the money to pay off the mortgage once the term comes to end next year, I was just wondering if it worth taking this to an ombudsman as I never asked for the reduction in monthly payments and I can't reduce the term because I can't prove my income at the moment. 

For me it doesn't make much difference as the balance is so low but for others it would mean that they are paying a lot more of interest in the long term and they say its in the customers interest but it is not.

You have entered into a fixed term contract, if you over pay, they cannot change the length of the term so they have to change the payment amount in order to continue with the terms of the contract.

There is nothing to take to the ombudsman as the terms of the contract you willingly agreed to are being adhered to.

You may have some complaint against your mortgage broker (if you used one) if you described that you wanted to overpay and have the term reduced and not the payment amount and they didn't explain what you were buying from them.

It is a simple case of not reading / understanding what the terms of the contract are. Unfortunately it happens more often than it should, which could say the contract should be clearer or people should be more observant.

The thing is it wasn't in my contract it was brought in midway and I never agreed to it, I got the mortgage through Halifax and have spoken with a Halifax mortgage advisor and she said they are getting a lot of complaints about this at the minute and advised me to go to the ombudsman. She recorded the conversation we had so hopefully I can use that as evidence with the ombudsman.

thewarmcoconut

Hello,

Just a quick update, I did end up going to the ombudsman on the advice from the Halifax mortgage advisor. The ombudsman said it was going to be an easy case as they have done plenty like this. I have received an official apology and just waiting on a settlement figure.