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Halifax Intermediaries ups minimum loan size on 2 and 5 year loans to £100k

ended 19. August 2022

On Friday 19 August, Halifax Intermediaries is making the following changes to its product range on certain exclusives:

  • Minimum loan amount increased to £100,000 on all 2 and 5 year products.

What are your thoughts? This is breaking so don't write an essay, keep it snappy!
 

9 responses from the Newspage community

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Jamie Lennox
Director at Dimora Mortgages
This is a strange move from the Halifax, which we didn’t see coming. Of the lenders who have previously exited certain product areas, it’s typically been due to not being able to cope with the demand of applications they’ve been receiving. However, throughout this busy period Halifax have maintained an impeccable service level, so it’s hard to see the rationale behind this move. It seem that the Halifax are going to be focusing on larger borrowing moving forward, which is going to be a more profitable area for them. Nevertheless there is going to be a huge proportion of customers around the country who will no longer be able to access one of the biggest lenders for their remortgages.
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Aaron Strutt
Product and Communications Director at Trinity Financial
We are used to lenders increasing their minimum loan sizes to restrict business volumes but only during particularly busy periods or extreme financial situations. Many of the lenders are struggling to cope with the demand for their products and they are making changes rather than pulling them all together. It is unusual for a bank the size of Halifax to have a minimum loan size of £100,000 because there are so many borrowers looking for much smaller mortgages.
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Imran Hussain
Director at Harmony Financial Services
Unbelievable Jeff, for a lender the size of Halifax, to pretty much not want small loans when it comes to remortgages from new customers is a bizarre move and the majority would love to know why or is it simply they don't make enough return on these small loans and it's decided to simply kick them to the curb for now especially with a lot of lenders removing whole product ranges and changing policy quicker than a blink of an eye if there was ever a time for professional advice it's more needed now than ever before when it comes to mortgages.
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Rob Peters
Principal at Simple Fast Mortgage
Halifax's slogan is, "it's a people thing". Well, maybe just for some people. Specifically, those with bigger mortgages. Whist at first glance this might appear to be a high-street giant cutting out the little people of Britain, it's not going to affect many people at all. Firstly, this only applies to remortgages, and those with a remortgage balance of sub £100,000 are likely to stick with their existing mortgage lender at renewal time anyway. This is because for small mortgages the hassle of moving provider outweighs the minimal financial gain. Secondly, those that want to move provider will still find swathe of other 'vanilla' high-street options to select from.
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Mark Hosker
Mortgage Adviser at Cyborg Finance
"The Criteria Change will have a greater impact in the North, such as in the market town of Halifax where the bank was founded in 1853. With house prices reaching £160,000 these areas are where you will find most borrowers with under £100,000 mortgages which that Bank will no longer serve." "I'm sure this is temporary and will help Halifax serve the customers with larger loans which are more profitable to Lloyds Group."
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Ashley Thomas
Director at Magni Finance
Although it seems harsh for those looking to borrow below £100k, I am not surprised they have put the minimum at this level. Lenders are very busy and processing times are a lot longer as there is a mad rush to remortgage with rates increasing on a weekly basis. Commercially, it makes sense to prioritise loans above a certain level as they will reduce the number of applications from cases where they would make a lower margin. This in turn will improve their service.
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
It's a great, albeit harsh way to hit your lending target for value and reduce the number of cases and thus workload you need to take on to reach it. Less cases and admin, more income. In fairness to Halifax, their service levels are some of the best on the market at the moment and the broker forums are full of comments asking why all lenders can't be like them, getting offers out in a few days whilst some are taking three weeks to look at a payslip.
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Ben Tadd
Director at Lucra Mortgages
This is bad news for a big class of borrowers, especially those on lower incomes and for a lot of first-time buyers too. Halifax withdrawing lending below £100,000 for new applications will undoubtedly hit family's that are trying to maximise affordability, who are largely reliant on benefit income alongside their normal wage. This will, for these individuals and families, now leave an even smaller pool of lenders to choose from in the mortgage market. It's also a big kick in the teeth for recently self-employed applicants with just one year's worth of accounts who will also be affected. Halifax have always been the go to high street lender for recently self-employed applicants. For these borrowers, looking to borrow less than £100,000 they may well now be forced to wait a further year to be eligible for other lenders across the rest of the market that require two years worth of books before they can lend. The question mark is, how much higher might mortgage rates be in a further year when they are then eligible?!
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Paul Neal
Mortgages & Equity Release Advisor at First Choice Financial Services
I think this is simple maths for Halifax. Less work and more money. It seems an unusual move buy a larger lender, but on the flip side with lenders falling further and further behind, this could be a good move by them