Halifax Mortgages Standard Variable Rate announcement
You may be aware that we are writing to some of our Bank of Scotland customers who have a Halifax Mortgage. These are certain customers who were sent a Halifax mortgage offer between 20th September 2004 and 16th September 2007 and still held that mortgage in January 2009. Wording in the mortgage offer document sent during this time might have had the potential to cause confusion.
This was in relation to the summary of the Halifax SVR cap which was included within the mortgage offer document. Therefore we are writing to customers to ensure that they are fully aware of what the SVR cap is and how it relates to their own borrowing.
Customers do not need to take any action. We are committed to ensuring that customers have a clear understanding of how their mortgage works and will proactively contact all customers affected from April 2011. Some affected customers will receive a goodwill payment.
Below is a list of questions and answers we have prepared. If you have a question, that has not been answered here, please check back soon to see further updates.
1. Does this affect me?
If you took your Halifax mortgage out with us after being sent an offer between 20th September 2004 and 16th September 2007, you will have received a mortgage offer which had a summary of the cap.
If you remained on the same mortgage conditions on 1st January 2009, you are affected and will be sent a letter during April. The content of that letter will depend on your individual circumstances.
2. Will I get a goodwill payment and how much will it be?
Unfortunately, we cannot confirm here how individual customers are affected. However, you do not need to take any action at this point. If you are affected, a letter will be sent to you during April. This letter will explain whether or not a payment will be credited to your mortgage, and what the value of that payment will be.
3. How will you decide who gets a goodwill payment?
Payment will be made to customers that were sent a Halifax mortgage offer between 20th September 2004 and 16th September 2007, and have been paying SVR at any point since 1st January 2009 while still on the Halifax Mortgage Conditions 2004 (2nd Edition).
4. What if I want to transfer to a new product now? Will I lose any entitlement I might have to a goodwill payment?
No. If you are entitled to a goodwill payment, you will receive a letter from us during April, and transferring to a new product will make no difference.
5. What about customers who took a Halifax mortgage after being sent an offer between 20th September 2004 and 16th September 2007 but no longer have a Halifax mortgage?
We will be writing to affected customers including those who have since repaid their mortgage account with Halifax.
6. Why did you increase the cap?
The terms and conditions allow us to vary the cap. We changed the cap in October 2008 because of significant increases in the cost to us of borrowing the money we lend to mortgage customers.
Despite this change, the Halifax SVR (currently 3.50%) remains below the level of most other mortgage lenders.
7. If I’m entitled to a goodwill payment but my mortgage is in arrears, will I still get it?
If you are eligible, you will receive a letter in April and this will detail any goodwill payment where appropriate. Any payment will reduce the arrears balance first.
8. What if I want the goodwill payment paid into a different account/by cheque or cash?
If you would like the payment to be made by a different means then please contact us on the number shown within your letter.
9. If I took out my mortgage after being sent an offer between 20th September 2004 and 16th September 2007, why might I no longer be on the same mortgage conditions?
Because if you had a further advance or a product transfer since 16 September 2007, you will have moved on to the current mortgage conditions that do not include the Halifax SVR cap.
10. If I want to overpay a further 10%, does the goodwill payment go towards this amount?
No, you are able to overpay by a further 10% as the goodwill payment is not included as part of this allowance.
11. What guidance can you give on UK tax treatment for UK resident customers receiving an ex gratia payment
The following comments are intended only as a general guide to current UK taxation and what is understood to be current UK HM Revenue & Customs practice, both of which are subject to change at any time, possibly with retroactive effect.
Tax can be complicated and individual circumstances may need to be considered in more detail. Any person who is in any doubt as to his tax position should consult his own professional adviser.
This general guidance applies where:
• The customer is a UK resident individual
• The mortgage was used for the purposes of purchasing a UK residential property that is occupied by the customer.
We expect that an ex-gratia payment received by an individual customer under this programme will not be subject to UK income tax or UK capital gains tax.
We will be updating these Q&As as we understand the questions that our customers are asking. If though, you have questions that are not answered here then please call the number contained within your letter.
If you are affected you will be written to by the end of April and this will contain details of your situation. You do not need to take any action now but if you do have a question then please call 08457 27 37 47, option 1.