Halifax Overpayment - £10 fee?

beecher

I was told that I'd have to pay £10 to reduce the term on my Halifax mortgage unless I did so during a remortgage. Though I have to say I've been told so many different things when it comes to overpayments, that who knows. I can't afford to make any right now, but when I did they reduced the amount paid and I just upped the overpayment by the same amount.

KTF

From the Halifax website:

[FONT=Arial, Helvetica]Changing the term of a mortgage[/FONT]
[FONT=Arial, Helvetica]With our agreement, you can change the term of your current mortgage. The amount of your monthly mortgage payment will be amended as you will be paying your mortgage off over either a longer or shorter period. A £10 administration fee is payable for this service.[/FONT]
[FONT=Arial, Helvetica]To discuss this call 08456 03 03 52. Lines are open 8am to 8pm Monday to Friday, and 9am to 4pm on Saturdays.[/FONT]
[FONT=Arial, Helvetica]Paying a lump sum off / extra money towards a mortgage[/FONT]
[FONT=Arial, Helvetica]You can do this, but if your mortgage is subject to an early repayment charge you may have to pay some of that charge according to the amount you are paying off.[/FONT]
[FONT=Arial, Helvetica]You can pay up to 10% off the amount of your mortgage that is subject to an early repayment charge during any rolling 12 month period without incurring the early repayment charge.[/FONT]
[FONT=Arial, Helvetica]If you want to make an extra lump sum payment, your monthly mortgage payments will be lowered to repay the reduced overall balance on your mortgage over the same remaining term. However if you want to remain paying the same monthly amount then we can recalculate the remaining term.[/FONT]
[FONT=Arial, Helvetica]For more details, call 08456 03 03 52. Lines are open 8am to 8pm Monday to Friday, and 9am to 4pm on Saturdays.[/FONT]
[FONT=Arial, Helvetica]

[/FONT]
[FONT=Arial, Helvetica]From: http://www.halifax.co.uk/mortgages/Existingmortenquiries.asp[/FONT]
[FONT=Arial, Helvetica]It looks like your overpayment is being classed as a 'lump sum' payment which is resulting in the term being reduced which triggers the £10 fee. Not sure why that isnt applying to me though and their online banking is pretty poor as it doesnt show each month in detail.[/FONT]
[FONT=Arial, Helvetica]Did the £10 charge get confirmed in a letter?
[/FONT]

Ian_Griffiths_Halifax

fpa. If you have a 2 year Fixed Rate and you've already had the opportunity to overpay, then I assume that you have less than 18 months left before your deal comes to an end.

You need to consider whether or not the £10 monthly charge times X months is going to save you more interest than you would incur if you don't overpay. Give us a figure of how much you are overpaying by and your interest rate and we may be able to help with the decision.

If you aren't going to save more than the cost, then I would put the overpayment into another account until you are free to make another overpayment, or simply pay the whole of the savings off the mortgage when remortgaging at the end of the 2 year deal.

Noz

KTF wrote: »

From the Halifax website:
[/size][/font]
[FONT=Arial, Helvetica]From: http://www.halifax.co.uk/mortgages/Existingmortenquiries.asp[/FONT]
[FONT=Arial, Helvetica]It looks like your overpayment is being classed as a 'lump sum' payment which is resulting in the term being reduced which triggers the £10 fee. Not sure why that isnt applying to me though and their online banking is pretty poor as it doesnt show each month in detail.[/FONT]
[FONT=Arial, Helvetica]Did the £10 charge get confirmed in a letter?
[/FONT]

As I suggested, your term isn't being reduced with each standing order

fpa_2

Sure, I don't have the exact figures handy but it's a 5.29% fixed for 2 years repayment mortgage for ~£167k. My monthly payment was so far ~£1003, I have overpaid ~£14k this year (in one go) and they want to reduce the monthly payment to ~£900.

I was planning to make another (single) overpayment after 1 year, again close to the maximum 10% allowance.

BTW, they said that they will send me a letter about the £10 fee.

money_maker_3

Hi, just so you know the regular over payments made by standing order don't accrue the £10 fee as they are not ''official'' over payments. Yes they come off your balance and yes you save interest on that amount straight away, but they show as advance payments instead of over payments. These advance payments are used in the event of an underpayment on a monthly direct debit. These are reset to £0 every 12 months or earlier if you do a product review at some stage during the year.

This looks more complicated than it is, I'm not very good at explaining things !!!! And I do it for a living !!

KTF

Is it acting like the Nationwide overpayments so you can draw on them when required rather than being gone for good as soon as the payment is made?

I know that the overall balance is reducing but Halifax online banking is a bit rubbish when it comes to mortgages as it doesnt give you month by month detail so I can see if its being classed as one large payment (or not).

I have just checked my old bank statements and the amount that Halifax take out each month is decreasing slightly rather than staying the same similar to when I had a mortgage with Nationwide.

Edit 1: This is not what I expected as I thought the monthly amount would remain the same and the overpayment go on top. Does this mean that in order for it to stay the same I would have to pay the £10 fee each time I made an overpayment or do I need to phone them up and query this?

Edit 2: Just got off the phone to them. Apparently every time the interest rate changes the 'system' applies the change to every single account (even if it is fixed) and they dont have a process to correct it automatically so you have to phone up and get the payment reset back to the original level. Didnt exactly make a lot of sense as I am on a fixed rate till 2012 but there you go and the guy has changed it back to the original payment.

Every time the rate is adjusted you will have to phone them up and request that the monthly payment is reset.