Interest rates down but my payment has gone up

Tpaz

Hi There

I just recieved a letter from Halifax saying the interest rate has been cut and that I will have a new monthly payment of £320.57

BUT

I have a fixed mortgage so this shouldn't move should it ? on top of that it's £5 MORE than my current payment

whats going on ?

I'm at work so I can't call them so my wife has and apparently if the interest rate changes they recalculate the payments and it might go up ?? if the rate goes down how can that be ??

£5 might not seems like much, but it's an extra £1000 over the course of my mortgage.

tinalives

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cattie

I think you might find that the new payment they are stating will relate to how much the mortgage will be when your present deal ends & it will revert to the SVR. I too had the same sort of letter from Halifax yesterday. It stated a higher figure than I presently pay & I am on a discount deal ending soon, but already with a new discount deal in place with them for near enough the same monthly payment I'm on now. Read the letter again & I think you'll find it is quoting the SVR & not the fixed rate you're currently on.

Scott

Cattie - your letter sounds like it's fallen through the cracks (i.e. it's been issued automatically because you are approaching the end of your term). It happens quite regularly when there are thousands of the same letter being produced. It's a tiresome task and attention to detail sometimes slips a little, since dealing with a phone call over it is often easier.

Tapz - Have you missed any payments? Had any cause for the balance of your mortgage to be above the level it should have been (i.e. large fees, early repayment charges added when switching products, etc)?. This would cause your payment to increase if they recalculated the payments, which must have been triggered by the rate change.

Give them a bell and ask why the payment has increased, or get your wife to have them issue you a letter explaining it clearly if you are too busy at work.

jimmy215

Hi Tpaz

I had this exact same problem with Halifax a couple of years ago. I rang them up and found out they had added a £175 valuation fee onto my mortgage which was suseptable to interest rate changes, whereas the fixed mortgage I had taken out was (obviously) not. So within a couple of months, when interest rates increased, my monthly payment on my fixed mortgage had gone up very slightly! I couldn't really complain, as I thought I had gotten away with not having to pay my valuation fee at all! :-)

All I did was pop into the Halifax, pay off the £175 by switch (or whatever it is now!) and my mortagage payment came back down to almost what Halifax had originally quoted to me.

Hope this helps

Regards
James

mab

Hi Tpaz

I had this happen a couple of years ago and, on ringing the Coventry B. S., found that they had not taken into account that month's payment as it had not yet gone through the system. They had added it on to the balance. They did recalculate it for me and the payment went down.

Tpaz

Thanks guys for the responses

I haven't missed any payments or anything like that (I'm very religious in my checking that it comes out)

I've read the letter and it refers to incidental charges to your mortgage account (like jimmy215's valuation) but it says that the payment goes up if the interest rate goes up...but the interest rate went down

Anyhow, If I get home in time tonight I'll be ringing them (or in the morning) I'll let you know how it goes

Thanks

Tpaz