Posted on 28 August 2011 by Jan
In 2003 elderley relatives took out a Halifax Retirement Mortgage, 40 years interest only. The loan was taken on a house in the UK and they moved to France whilst waiting for the house in UK to sell, unfortunately the property still has not been sold. However, in 2010 they were notified by the Halifax that the mortgage was under review and the cost had increased by 200% so in order to meet the payment they let the property. Subsequently the Halifax charged them £900 to transfer the mortgage and the cost per month went up 400% monthly charge, moving them to a buy to let. They are now experiencing difficulty in paying and want to come back to sell the property. The Halifax say that they have a three year period before they can move the mortgage. Have you any advice?
The Halifax Retirement Mortgage is a scheme whereby the borrower can choose any of their existing new business mortgage rates and for the payment of the interest each month there was no final redemption deadline. The mortgage ran until the property was sold, either on death or earlier. It sounds like your relatives had come to the end of a special mortgage deal and were reverting to the Standard Variable rate in 2010 which led to the review and increase in payments. By choosing to let the property they no longer qualified for the Retirement Homeplan Scheme and where subsequentrly transferred on to a Buy to Let mortgage and it sounds like they also are having to pay the capital and interest back each month.
I doubt that there is a 3 year period before they can sell the property and repay the mortgage, but there is probably a period linked to the BTL mortgage when an Early Repayment Charge is payable. The details of this should be in the mortgage offer your relatives received prior to the transfer and you should check this first. If your relatives were not made aware of the penalties of repaying early then they should complain to Halifax asking for them to be waived. Halifax have 8 weeks in which to respond and if your relatives are still not happy then they can escalate the complaint to the Financial Ombudsman: http://www.financial-ombudsman.org.uk/consumer/complaints.htm
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