Can the Halifax change my mortgage terms?

Q In 1993 I took out a 25-year mortgage with the Halifax for ?43,500. Initially it was an endowment mortgage but I changed to repayment around 1996.

From 1995, I was made redundant and as a 'concession', was allowed to make reduced payments. I had help from the DSS with the interest payments from then to earlier this year, and these were supplemented by my own payments.

I resumed self-employment just a few months ago & informed the Halifax that I wished to pay the full amount, to which they replied that I had an accumulated debt of around ?3,500, & because they had capitalised the arrears onto the mortgage had allowed me to continue paying the reduced monthly payments. In fact, I had no idea that the payments were reduced.

What's worse is that, having recently had my partner move in, we made contact with Halifax about remortgaging. Halfway through the conversation, imagine my utter shock to be asked if I was aware I am on a 40-year Retirement Home Mortgage. It transpires that at some point over the last seven or so years and without my prior knowledge or consent whatsoever, the Halifax has apparently changed the terms of my mortgage, in the process, extending it by 15 years.

Worse still ... when I asked what my current balance owing on the mortgage was, I was told that it's ?43,398. My (conservative) estimate of payments made over the last 11 years amount to approx ?20,000 to ?25,000+ and the original mortgage was for ?43,500. It would appear I have paid up to ?25,000 for 11 years & it hasn't reduced my mortgage virtually at all.

I am now fraught with worry over this. How can the Halifax change the terms, length or type of my mortgage without permission?

CL

A My first reaction to your email was "How awful". Then I thought: "Hang on a minute, what would be really awful is if the Halifax had repossessed his home." And as far as I can see, the Halifax has been bending over backwards to make sure that you haven't had to go through the trauma of losing your home on top of being made redundant.

But in answer to your question as to whether the Halifax can change your mortgage without your permission. No they can't and judging by most of what you say, they haven't.

There does, however, seem to have been a communication breakdown somewhere along the line and I get the impression that the Halifax has not explained its actions - and their consequences - in as crystal-clear a fashion as it might.

From what you say, it seems as though - in order to keep repayments affordable - the Halifax has been charging you interest only and not asking for any capital repayment, which may explain why the amount you owe has barely gone down. The arrears they told you about could well have built up while the mortgage was still arranged on an interest-only basis since the DSS payments do not cover the mortgage interest in full.

In addition, judging by the reaction of the Halifax person I contacted, telling you that you are now on a 40-year Retirement Home Plan is just plain bizarre and very likely to be a mistake on the part of the person you spoke to.

To put your mind at rest, I suggest that you write to the Halifax asking for a breakdown of their figures since the mortgage began, together with written confirmation of the current state of your mortgage. If it turns out that they have made changes without your written consent, you would have grounds for complaint and should ask the Halifax for details of its formal complaints procedure which it is obliged to give you.