Halifax under fire for mortgage switch
Ian Crampton, sales director at Ferndown Ltd, expressed his disappointment with Halifax. He said: “We have been contacted on several occasions by clients complaining that Halifax is converting their mortgage from interest only to repayment after they have cancelled or sold their endowment policies.
“In a couple of cases, this has been done as part of a mortgage review I’ve done with my clients, where we have a plan in place for the mortgage to be redeemed with alternative investments.”
He added his disappointment at the lenders retirement home plan scheme. He said: “ Halifax’s criteria for the range is that the mortgage must be on an interest only basis, up to 75 per cent of the property value, with no investment vehicle needed. Why then, if this is the case, is it so adamant about obtaining confirmation of pension income from a 46 year-old male who wishes to take a 20-year repayment mortgage? Halifax seems to be more concerned in covering its backside with the regulator than acting in a sensible manner and recognising not every mortgage case is black and white.”
Responding, Paul Fincham, senior media relations’ manager at Halifax, said: “The switch from interest only to repayment isn’t automatic and we contact the customer asking them how they plan to repay the mortgage. If there is no response from the client, then in the last instance we would look at changing the term. We follow responsible lending procedures when amending contracts.
“The retirement home plan is slightly different as it is a lifetime mortgage for the retired. It allows people to remortgage or purchase a new home, with the mortgage paid out of the borrowers estate.” He added pension income would only be asked for if the term of the mortgage exceeded the borrowers 70th birthday, or following specific details about the client.