Mortgage payments reduced (Halifax)

BikingBud

Yup, Halifax wanting their cake and eating it!

Only those with Halifax mortgages can say for sure but the pattern does appear to be growing. 

Phoenix72 said:

Sapindus said:

Phoenix72 said:

How dare Halifax adjust the payments so that the mortgage ends on the contractually agreed due date, agreed by both parties.

I could pay off 99% of it and then spend the next 15 years paying pennies in interest, if it mattered that much to "keep to the contractually agreed date". I don't think I have to.  I'm out of my fixed rate, there is no penalty for paying it all off early.  When I sell my house, it will be paid off.  If I won the lottery, I could pay it off, in fact Halifax themselves run a  prize draw where one person each month gets their mortgage paid off. They can't force me to still have a mortgage just to keep to a contractually agreed date.
  

Yes, you could do that but the fact remains you took out a mortgage for x number of years that is due to end on a specific date. All they are doing is adjusting payment so that date is met. Don't think anybody mentioned forcing you to do anything.

The mortgage was likely taken over 15/20/25 or even 30 years. If it was SVR, under those terms you are free to overpay and settle at any time. Others may be split into specific sub agreements of a fixed interest rate for a fixed period. They come with clauses, especially overpayment limits of 10%. Some providers allow the end date to be recalculated, some providers especially Halifax claim recalculation is required to ensure affordability. Yet that affordability check and the more stringent stress test was completed at the point of agreement.

There are a number of previous discussions, one can be found here 

Surprises me that on a money saving site that there is not greater support for consumers being pressured by large institutions. 

BarelySentientAI

BikingBud said:

Yup, Halifax wanting their cake and eating it!

Only those with Halifax mortgages can say for sure but the pattern does appear to be growing. 

Phoenix72 said:

Sapindus said:

Phoenix72 said:

How dare Halifax adjust the payments so that the mortgage ends on the contractually agreed due date, agreed by both parties.

I could pay off 99% of it and then spend the next 15 years paying pennies in interest, if it mattered that much to "keep to the contractually agreed date". I don't think I have to.  I'm out of my fixed rate, there is no penalty for paying it all off early.  When I sell my house, it will be paid off.  If I won the lottery, I could pay it off, in fact Halifax themselves run a  prize draw where one person each month gets their mortgage paid off. They can't force me to still have a mortgage just to keep to a contractually agreed date.
  

Yes, you could do that but the fact remains you took out a mortgage for x number of years that is due to end on a specific date. All they are doing is adjusting payment so that date is met. Don't think anybody mentioned forcing you to do anything.

The mortgage was likely taken over 15/20/25 or even 30 years. If it was SVR, under those terms you are free to overpay and settle at any time. Others may be split into specific sub agreements of a fixed interest rate for a fixed period. They come with clauses, especially overpayment limits of 10%. Some providers allow the end date to be recalculated, some providers especially Halifax claim recalculation is required to ensure affordability. Yet that affordability check and the more stringent stress test was completed at the point of agreement.

There are a number of previous discussions, one can be found here 

Surprises me that on a money saving site that there is not greater support for consumers being pressured by large institutions. 

Being held to a contract is not "being pressured".

Advising people to rely on loopholes or goodwill to avoid being held to a contract is not a sensible approach on a money saving site - as it causes problems when the loopholes are closed or (as in this case) the goodwill is not available.

Far better to support people understanding what their contracts say and how best to manage within that framework. 

BikingBud

No loopholes or goodwill, you will recall in earlier discussion mortgage holders were "required" to attend a chat with an advisor, and after that discussion the customer was allowed to adjust the end date.

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.
 

fozzie55 said: 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.

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.

There are differing approaches from different lenders but it does appear Halifax are quite willing to make it difficult for borrowers. That does not mean it is all contractually acceptable and I encourage all borrowers to take their lender to task, as @whitecircle did, if they pressure them to reduce payments rather than reducing the term and saving more. 

In fact Halifax now state on their site:

Before making overpayments, talk to your lender to understand if any early repayment charges apply. If you want your overpayments to have the effect of reducing your mortgage term, rather than reducing your monthly payment, you need to talk to your lender.

If you’ve got a Halifax mortgage, overpayments won’t automatically reduce your mortgage term or your monthly mortgage payment, but could save you money by reducing the amount of interest charged. When the next monthly payment recalculation happens, for example at an interest rate change, the monthly payment will be calculated using the existing remaining term of the mortgage. If you want to reduce your term you'll need to speak to one of our Mortgage and Protection Advisers to discuss your options.

Again this is a money saving site, don't tell people it cannot happen! 

Provide them with a route, perfectly legitimate and in line with the T&Cs of the lender, whereby they can save money rather than feeding the profit lines of the lenders.

Niv

Thankfully this is a lot more straight forward with nationwide. My 10% overpayment allowance figure is calculated on the original sum borrowed not the balance.

BarelySentientAI

BikingBud said:

Again this is a money saving site, don't tell people it cannot happen! 

Provide them with a route, perfectly legitimate and in line with the T&Cs of the lender, whereby they can save money rather than feeding the profit lines of the lenders.

Who said it cannot happen?

What we said was "follow the T&Cs".  Don't demand something, don't expect something contrary to the T&Cs, don't rely on "other lenders do it so you should", don't think that just because it was done before it will be done again.

Follow the T&Cs for your lender and deal.

BikingBud

Not that it cannot happen but deriding people for querying why a perfectly sound approach, allowed by the T&Cs, to minimise the customer's cost:

Phoenix72 said:

Sapindus said:

Phoenix72 said:

How dare Halifax adjust the payments so that the mortgage ends on the contractually agreed due date, agreed by both parties.

I could pay off 99% of it and then spend the next 15 years paying pennies in interest, if it mattered that much to "keep to the contractually agreed date". I don't think I have to.  I'm out of my fixed rate, there is no penalty for paying it all off early.  When I sell my house, it will be paid off.  If I won the lottery, I could pay it off, in fact Halifax themselves run a  prize draw where one person each month gets their mortgage paid off. They can't force me to still have a mortgage just to keep to a contractually agreed date.
  

Yes, you could do that but the fact remains you took out a mortgage for x number of years that is due to end on a specific date. All they are doing is adjusting payment so that date is met. Don't think anybody mentioned forcing you to do anything.

A message that appears to say "that's what you signed up for so suck it up sweet cheeks," Where is the mutuality and equity in that when clearly there are options to treat overpayments in different way, a way that is more beneficial to the customer rather than supporting the lenders.

Perhaps the first response might have been more focussed and directed the OP to the links on the Halifax site advising how they can overpay and get most benefit for themselves. Thereby highlighting how the OP's lender do in fact allow overpayment to be used to reduce the term. 

Sapindus

I'm glad it started a discussion.  I was just a bit peeved - the comment about Halifax "having their cake and eating it" sums it up nicely.  

Their mortgage overpayment calculator said something like "you could save £x in interest and pay your mortgage off £x years earlier" but in fact the graph just showed the balance going down to zero and then carrying on, a mortgage of nothing.  So term technically not reduced.  And yes I could probably ring them up and wrangle them into not reducing my payments, but the point is many people would not twig what was going on and so Halifax get their cake from the unwary.

Thanks - end of conversation for me.

Hoenir

Sapindus said:

I'm glad it started a discussion.  I was just a bit peeved - the comment about Halifax "having their cake and eating it" sums it up nicely.  

Doesn't seem to have resolved the miscomprehension though.  Although the facts have been clearly stated.