Halifax rapped for duff advice on mortgages

Published 25th Nov 2010

Britain’s biggest mortgage lender has been accused of misleading customers over tracker loans.

Halifax, part of Lloyds Banking Group, which is 41 per cent owned by the taxpayer, has come under fire for suggesting that mortgage customers could benefit from falling interest rates if they take out a tracker mortgage now.These loans usually have interest payments linked to the Bank of England base rate.

However, the base rate has been at a record low of 0.5 per cent for 20 months, so it is unlikely it would be lowered any further.

The section of the Halifax website aimed at first-time buyers states: ‘Want to take advantage of lower interest rates if they go down?’ Existing customers are told: ‘If you want to take advantage of interest rates if they go down, a tracker rate mortgage could be the perfect deal for you.’

Dominic Lindley, of consumer group Which?, says: ‘Given how unlikely it is the base rate will drop further, we believe it is extremely misleading for Halifax to be pushing its tracker mortgages in this way.’

Halifax’s two-year tracker for first-time buyers with a 10 per cent deposit is one of the most expensive, pegged at 5.29 points above base rate, giving a current interest rate of 5.79 per cent.

Iif the base rate increased to 2.5 per cent, borrowers would pay 7.79 per cent. This would mean an additional £190 per month for households with a £150,000 mortgage.

Aa spokesperson for Halifax says: ‘ The information regarding tracker mortgages is correct and points to rates going up as well as down. However, we will look at amending this page to be more considerate of this as soon as possible.’

Source: ' ThisIsMoney '

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