Can Halifax change the terms of mortgage like this?

[camaleon]

We bought a house, then we moved. According to the terms fo the agreement we had 2 years with fixed interest rate and penalty for paying more than 10% of the total sum. Because we moved, we rented the place (much less than the mortgate but it helps with the loss).

The house is worth half the money we boought it for (or less, we are trying to sell for half of it unsucessfully). When we rented we told Halifax and we signed a consent to lease.

They say now that this consent has expired and we have to get a new 'product' which means more interest and a penalty for repayments. This has happened just after we have managed to pay a big lump sum.

Can they change the terms of the mortgage like this? I am lost.

Only if the mortgage deed says they can. You'll have to check all the small print.

Thank you collaborate....

Also check if the consent to lease has an expiry date.

thanks nocake. Will get appointment and check all with them before signing new contract and finding out new surprises later on.

I'd check your original mortgage conditions if I were you, rather than asking the lender what they were.

Very good advice from Collaborate.

No advice, but at your house being worth less than half what you paid for it. Are you in the UK? I take it you bought at the peak price period.

Halifax will definitely have this covered in your mortgage deed and could have changed your rate right from when you moved out of the property- you have been fortunate to have not had it increased before now.

Regardless of what they may or may not be able to do legally, make sure you explore all other options. Look at other lenders, see what they can offer you, and see how much it would cost you in different realistic scenarios.

Even if you have to pay a penalty to redeem with Halifax you may be better off than under the new deal they are offering you, so make sure you check all your options. Also see if you can negotiate with Halifax, they have a lot of leeway normally in what they can offer existing clients.

Fantastic advice. Yes, my property costs half of what it did in 2007 (and yes in the UK, in NI). The worst decision ever and a proper pain. I have an appointment tomorrow and I will explore other lenders too.

I hope you got this sorted out. It's a real eye-opener that property can fall in value so quickly. I've no idea what my house is worth - not that I'm planning to sell - but probably less than I think.

Thanks AgentProvocateur. It is scandalous. They can only provide advice on 'consent to let' on the phone. You cannot see a proper human being and see the figures explain to you.
If they change the terms of the contract is called 'change of policy' and it is Ok. If I do not accept buying the new product and signing a contract that suggest it was me who wanted to buy it, it is called 'breach of contract'. The rates they are giving me are terrible (5.7% when the Central Bank has just confirmed again 1%). And if I want to repay more than 10% they will charge me a 3% for the privilege (I was out of that penalty already, but the 'new' product imposes it again)

With the help of a relative I may be able to repay (I do not owe so much anymore). Every other mortgage provider would offer me a better rate, but I am wondering how to go again making some kind of complain/legal procedure against them. The treatment and the lack of information has been incredible.

omg at NI - it was the elephants graveyard of financial dealings a few years back! How dreadful for you. The financial ombudsman was great with me, but to make a complaint you must have exhausted all negotiations with the lender and basically had the door slammed on you.