Wednesday, Apr 15, 2009

HBOS offers lifeline for existing customers?

Telegraph: Halifax to rescue borrowers in negative equity with 120pc remortgages

One of Britain's biggest mortgage lenders is offering loans of as much as 120pc of the property value to existing customers coming to the end of their current deal. HBOS, which is part of Lloyds Banking Group, will consider offering a new mortgage to customers in negative equity whose existing deal, such as a fixed rate, is about to expire. Normally such borrowers would see the rate they pay revert to the lender's standard variable rate (SVR) and would be unable to remortgage if the new loan were greater than the current value of the property as a result of the decline in house prices.

Posted by quiet guy @ 08:20 AM (2562 views)
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1. little professor said...

So for someone coming on to the end of their fixed rate and finding themselves in negative equity, they can either go onto the SVR of 3.5%, or pay a 1,249 fee to fix at 5.19%.

The second option may make more sense in the long term, but which option do you think most of the sheeple will go for?

The up-front fee alone will put most of the feckless borrowers off. Plus, the difference in interest rates amounts to an extra 210 a month on a typical 150,000 mortgage - that's going to be too much for most borrowers to ignore, especially the sort that were so short-sighted that they bought a house in the last couple of years.

Wednesday, April 15, 2009 08:43AM Report Comment

2. bystander said...

Will Northern Crock follow suit as it to is HMG owned????

Wednesday, April 15, 2009 09:18AM Report Comment

3. george monsoon said...


I bet the conditions are rigid... sharp intake of breath if any of these borrowers actually care to read the terms..

Wednesday, April 15, 2009 09:33AM Report Comment

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5. sold 2 rent 1 said...


Would like to but busy that weekend.
Give us more notice next time.

Wednesday, April 15, 2009 09:51AM Report Comment

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7. george monsoon said...

Damn.. Its a bit out of my way for an evening drink, but keep me posted if any of you guys are thinkinf of getting together in the NorthWest.

Wednesday, April 15, 2009 10:14AM Report Comment

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9. crash n burn said...

Is everyone invited? Strangely enough I will be in Bath that weekend and wouldn't mind meeting that mythical TC. It does depend however, just got a new born, so will have to take a rain check. However if the invitation is there, I'll try and make the effort.

Wednesday, April 15, 2009 10:22AM Report Comment

10. mark wadsworth said...

As Bystander says, the article did not emphasise that HBOS is part of Lloyds and is 65%-plus government/taxpayer owned. So of course NR will be doing this next.

We knew deep down that the government would STOP AT NOTHING to keep the house price bubble inflated, and hey, they're doing it, which is a disappointment but no big surprise. Will it work? Will it heck as like, it will drag out the misery for that much longer...

Wednesday, April 15, 2009 10:24AM Report Comment

11. waitingfor hpc said...

how is this legal? it is running a bank in competition with others at a loss? this is corrupt interference in an industry sector.

and if Halifax can do this then they can damn well pay me as a saver some interest. I am truly fed up with my house fund subsidising some of this crap with NO INTEREST.

sorry....rant over.

Wednesday, April 15, 2009 10:29AM Report Comment

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13. crash n burn said...

Thanks TC - I will do my best to join you and your friends.

Wednesday, April 15, 2009 11:09AM Report Comment

14. ketha said...

I'm sorry to say they already do this, have always done this... all they're doing now is publishing. Currently 95% deals go up to 120%

Wednesday, April 15, 2009 12:36PM Report Comment

15. mander said...

Desperation to save the bubble!!!

Lending to people who will default probably because they are more worried about the negative equity? Who's money is it? Your money? New printed money? Forget it, it is the bank's confidentiality rules. Transparancy is not for the banks; how much the banks lend, how much assets they have that is secret in banking and that has to be mentioned in the law as well eventually ...

Wednesday, April 15, 2009 08:51PM Report Comment

16. timmy t said...

Given that the greatest Global Financial Crisis in living memory has been caused by lending people too much money against houses which are falling in value, this is not even funny. You seriously couldn't make it up. If there was a GCSE Economics question asking what HBOS should do and someone answered with this they wouldn't even stretch to a fail. They would just lock up the student for being mad.

Wednesday, April 15, 2009 11:27PM Report Comment

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