Told Halifax mortgage ‘£29,500 in advance’?

Old-man-still-learning

In October 2023, the headline balance on my Halifax mortgage was around £10,000 with approximately 30 months to completion. 

When discussing my estimated new payments following the forthcoming end of a 1.52% fixed term in January 2024, I was told, twice by two separate advisors, that I was already £29,500 ‘in advance’. 

I am 80 years old, maybe a little slow on the uptake and just accepted this information without understanding it at the time.
My payments have now quadrupled on the new standard variable rate and, as a state pensioner, I am now in some difficulty making the new monthly payments. I have not missed any payments so far and have a perfect record so far.
Since my current balance in July 2024 is now only £9350, I simply do not understand this £29,500 in advance figure!  Maybe the mortgage is already redeemable?
Before I ‘rock the boat’, I thought I would seek your advice!

BarelySentientAI

Your actual balance is near 40k, but you're 30k ahead so the current balance is near 10k.

pramsay13

It sounds as though you have overpaid this £29,500 which has brought your balance to under £10,000.
Check with Halifax but you should be able to take a payment holiday or reduce your payments to a manageable figure.
You should also try and get a new mortgage on a better rate for the remaining term rather than the standard variable rate. 

Old-man-still-learning

No, no. You mis-understand!

My correct balance is now £9350 - as I expected from my actual payments, carefully monitored over the years, nothing to do with this ‘advance’ figure which came out of thin air!

The £29,500 ‘in advance’ figure was clearly on their screens but has never been quoted to me before, either verbally or within any written statement!  I don’t know what it refers to!

la531983

Have you ever made additional payments to the mortgage?

MWT

Old-man-still-learning said:

The £29,500 ‘in advance’ figure was clearly on their screens but has never been quoted to me before, either verbally or within any written statement!  I don’t know what it refers to!

Just a quick sanity check, what was your old monthly mortgage payment and what is the new monthly payment now?

BarelySentientAI

Old-man-still-learning said:

No, no. You mis-understand!

My correct balance is now £9350 - as I expected from my actual payments, carefully monitored over the years, nothing to do with this ‘advance’ figure which came out of thin air!

The £29,500 ‘in advance’ figure was clearly on their screens but has never been quoted to me before, either verbally or within any written statement!  I don’t know what it refers to!

We're telling you what it usually refers to.

It is normally used by lenders as a way of summarising overpayments made over the life of the mortgage, even if they have already been accounted for when calculating the "correct balance".

Assuming that nothing very strange has happened, and they are using standard terms:

As you rightly say, the "correct balance" should be based on the actual payments.  The "in advance" is based on the originally scheduled payments  They're telling you that you have actually paid £29,500 more than they expected you to have paid at this point in time based on the original mortgage offer.  You actually have £9350 left to pay, but they thought you would have £38,850 left.

Halifax are one of the worst that I've found at explaining things clearly though.

MWT

Old-man-still-learning said:

My payments have now quadrupled on the new standard variable rate and, as a state pensioner, I am now in some difficulty making the new monthly payments. I have not missed any payments so far and have a perfect record so far.

This is why I asked about the actual mortgage payments now and before, as this close to the end of your mortgage term even a large increase in interest should not have a major impact on the monthly payments as the outstanding balance is low.

In this case I would have expected your monthly payment increase to be less than £60...

Old-man-still-learning

Additional payments - only minor ones, nothing approaching £29,500!

In December 2021, my previous interest only Halifax mortgage was expiring with a balance of approximately £17,500 left to pay.

I negotiated a new 5 year mortgage at that stage with an initial 2-year fixed at 1.57%.

My new payment at that time on the fixed rate was £302.54 pm. 

I took advantage of the ‘Charter’ arrangements in October/November 2023 to pay interest only for 6 months. That is when I last spoke with Halifax and was told, simply in passing, about the ‘£29,500 existing payment in advance’.  I must have been dozy at the time, did make a note but didn’t query it. I am 80 after all!

My official fixed rate ended in January 2024, reverting to Standard Variable.

My payments since the Charter finished are now £379.57 pm.

So where has this being ‘£29,500 in advance’ suddenly come from??  I’m baffled!

I personally think that an accounting error has probably crept in.

I’m going to write to Halifax (I want there to be a written record of their response) and suggest that, with such a large overpayment being in evidence, perhaps the mortgage should be redeemed and any excess be paid into my current account, just to see what happens! I wish Martin could advise me in person!

MWT

So the difference between the monthly payment @ 1.57% and the monthly payment now on the SVR is £379.57 - £302.54 = £77.03.

The difference between that and the £60 I predicted is due to taking the interest-only holiday which means you didn't make any payment against the outstanding capital for that period.

... so why did you say your 'payments have now quadrupled..' ?

No idea where this mysterious £29k figure has come from, but nothing in what you have told us suggests you could possibly have that amount available, so ask questions by all means, but don't start spending it yet as it most likely does not exist.

Time2Go_25

No need for you to rock the boat, but clearly the obvious and in fact only people who can clarify this is the Halifax.