Halifax refuses to move mortgage

Halifax has refused to move our existing mortgage now that we are moving to a cheaper house.

This would bring the borrowing down from £127,111 to £80,000. Yet now the bank will take only my teacher’s and state pension into account and not our much higher rental income.

Additionally, as the mortgage was renegotiated only some eight months ago, I am concerned that it will try to charge an early repayment fee, even though it is the bank that has opted out of the arrangement and not us.

Can you help us out please? JOHN GUY, BIRMINGHAM

By the time I received your letter you had indeed been billed for a hefty repayment charge.

Halifax had said the maximum it would consider lending was £54,000. This would be for six years on an interest-only basis. This factored in just the pension income as the bank said it had noticed that your self-employment income, which is derived from eight student rental properties, had been falling.

In fact this is because you have been refurbishing the properties. The rental income has actually been going up.

Halifax had written to you stating emphatically that “there is no further appeal and the mortgage underwriters’ decision is final”. All your arguments had been to no avail.

When I spoke to Halifax it referred to the problems it had had in the past over lending to people who fell into arrears and could not pay their loan back. I observed that you struck me as being borrowing minnows and had always paid on time. It seemed strange that, given your income and other properties, it wouldn’t do as you were asking.

Halifax now said it would be prepared to lend to you after all. By then though you had found an alternative lender who has provided the mortgage you wanted at a lower interest rate.

Halifax has waived the £5,053 early redemption fee and given you £300 for goodwill. £308 remained owing for electricity.

It now acknowledges that it would have been better to deduct the refund from the money owed. After a lot of discussion with me it has reduced this bill to £108. It has apologised for the inconvenience caused.

You say you are paying around 50pc less to your new provider than you were paying Scottish Power.