Halifax Refusing Cheap Deals To Home Movers

Mortgage holders that are currently with the Halifax who then move house are being forced into more expensive mortgages, potentially costing them hundreds of pounds each month.

Thousands of home owners are currently taking advantage of the Halifax’s low standard variable rate of 3.5%. But now the lender is forcing these people to switch to more expensive fixed or tracker deals if they decide to move home. The next best deal on offer, assuming home owners have a minimum 15% deposit to carry forward but also want the security of a fixed monthly payment, is a 2-year fixed mortgage charging 6.39%. This also carries a £995 set-up fee.

This change of mortgage rate alone on a typical £150,000 mortgage would add £250 per month onto mortgage repayments, even by just borrowing the same amount. If these home movers have seen their property value fall in price over the last couple of years and have been left with a minimal deposit, they might have no choice about moving lenders and may be stuck where they are.

HSBC also offers a standard variable rate of 3.94%, but again home owners taking out a mortgage after 2006 cannot transfer the deal to their new home.

The standard variable rate mortgage is usually a no-frills mortgage about 2 percentage points above fixed and tracker rate mortgages and the lenders have in the past wanted to get people off the fixed and tracker rates that were inducements to borrow money and onto the variable rate, where they made their money.

But as the base rate sank to 0.5% the standard variable rate also reduced, so lenders are becoming keener for people to move onto other mortgage products where there is more money to be made.

Until around two or three years ago, remaining on the standard variable rate was the payback to the banks after a favorable introductory rate and any borrower with sense moved off as soon as the handcuffs allowed them to find a better deal. But now many variable rate mortgage products charge so little it makes sense to keep them, at least for the short term.

Borrowers at Nationwide and Cheltnham and Gloucester do have a better solution to fall back on. Along with a very low standard rate of 2.5%, they are allowed to take this mortgage with them to a new property, as long as any increase in borrowing is funded under a new mortgage deal. But at least the existing debt is not charged more.

3rd February 2010

2010
February
26th House Prices Falling Again
11th Bank of England Spreads A Forecast Of Gloom
6th Bank of England Stops Printing Money
January
20th The pound has reached a 4 month high against the Euro
20th UK Banks Might Face Insurance Levy
13th Credit Card Intest Rates Up
11th 6% Have Paid Mortgage With Plastic
8th Bank May Be Forced To Raise Interest Rates
7th Interest Rates Frozen
6th Iceland Cold On Payback
4th Virgin Money Might Attempt To Buy ’Good’ Northern Rock
2009
December
30th Land Registry Shows 0.9% House Price Increase
22nd OFT Throw In The Towel
21st OFT To Abandon Bank Charges Case?
18th OFT To Announce Next Bank Charges Step
16th Halifax Customers Vote With Their Feet Over Bank Charges
November
25th OFT Loses Bank Charges Battle
25th More Families Investing In Safes
23rd The End Of The Cheque
October
12th First Time Buyers Suffer Compared To Existing Mortgage Holders
September
30th Is The 90% Mortgage Making A Comeback?
29th Summer Mortgage Increases Halted
23rd Summer Jump In Mortgage Lending
18th Mortgage Lending Down
16th Inflation at 5 year low
16th More Premium Bond Winners
10th Interest Rates Held
6th Buyers Beware Of Stamp Duty Freeze
2nd Negative Net Borowing
June
13th Less mortgages for first time buyers
January
8th Record Low For Base Rates
2008
December
5th Base Rate Chopped, More Expected
1st RBS Pledge on Arrears
1st Base Rate To 2%?
1st Mortgage Lending Crashes
November
28th House Prices Fall 10%
21st Home Sales Rise
21st 1.3m Homeowners Stuck
12th Tracker Rates Rising
6th Lowest Rates In 53 Years
5th Pressure for 1% Cut
October
20th Libor Rate Falls
14th No Change For Libor Rate
8th Bank Of England Shock Rate Cut
2nd Pressure For Rate Cut
September
30th 10% of Mortgage Deals Axed
30th Libor Rate Jumps
29th Lloyds Latest To Raise Its Rates
29th Mortgage Lending Drops 98%
26th More Banks Raise Cost Of Borrowing
26th Rate Cut On The Horizon
25th HSBC Charges First Time Buyers More
23rd Rate Cut Was On The Horizon
22nd Banking Chaos Could Increase Mortgages
18th Lloyds To Take Over HBOS
15th More Housing Rescue Fears
11th Barratt Insures House Prices
9th Estate Agents Sell 1 Home Per Week
8th Rate Cuts Could Come...