David Nicholson, director of Bedford-based D & D Consultants, said the monthly payments produced in Halifax mortgage offers differ considerably from the figures in the illustrations produced by the major sourcing systems.
He explained: “I recently had a Halifax offer for a client who had an interest-only mortgage of £155,000 at an interest rate of 5.39 per cent. The interest-only figure, as calculated by all three sourcing systems, is £696.21. The Halifax offer came up with a figure of £693.20. I managed to establish, with Halifax, that its system calculates the payment by taking account of the day of the month that the payment is to be made. As it charges interest on a daily basis, it actually requires a different monthly payment to be madedepending on when in the month the client chooses to pay. They have clearly not informed the sourcing systems of this anomaly.”
Nicholson added: “It gets even worse. Halifax has a policy, tucked away in the small print, of charging the added arrangement fee at the full standard variable rate - currently 6.75 per cent - so, in the case cited above it will charge £155,000 at 5.39 per cent and £399.00 at 6.75 per cent. Yet it only shows the payment for £155,000 in the offer.
"The sourcing systems do at least now add the arrangement fee to their calculation, but at the scheme rate, rather than thestandard variable rate.”
Sticking with the cited case, Nicholson said these are the figures that confronted him:
Correct: £155,000 at 5.39 per cent = £696.21 plus £399 at 6.75 per cent = £2.24.TOTAL: £698.45
Sourcing systems: £155,399 at 5.39 per cent = 698.00
Halifax mortgage offer: £155,000 at 5.39 per cent = 693.20
Nicholson concluded: “We are informed that the sourcing systems verify their details.Some even indicate with a green dot that the details have been verified by the lender, and are guaranteed to be correct. Either this is nonsense or Halifax are verifying incorrect data.”
Mark Lofthouse, chief executive of sourcing system Mortgage Brain, said: “At the time of product recommendation by the intermediary the client is not likely to know the actual start date of the mortgage and frequently can elect the day of the month when they would like payments to be made as part of the application process. In order to fairly compare companies respective products wecalculate figures based on full months and apply either daily, monthly or annual interestcalculations as appropriate. Interestingly the above figures are well within the expected tolerance stated in the MCOB rules of 1 per cent.”
Paul Fincham, press spokesman at Halifax, said: “If brokers are looking for cast iron guarantees then the illustrations on our website will provide that. As borrowers have the choice of paying a redemption fee or an arrangement fee we do not automatically add the arrangement fee to the payments. Also, most clients pay the arrangement fee upfront anyway.”
