Another question re coming off a fixed rate - wording in the A&L mortgage offer

Philip624

I am currently on a 3 year fixed rate with A&L of 4.74% which expires on 31 May. Looking back at my mortgage offer letter it states 37 payments at a fixed rate of 4.74 then payments at a variable rate, currently (then) 5.49%.

However, further on under Description of this mortgage it states:

How your mortgage works after it starts

The fixed rate will be 4.74% starting on the day of release of funds and will end on 31 May 2009. Starting on and including the first day immediately after the expiry of the fixed rate period the premium rate, a variable rate, will be 0.990% above the Bank of England rate and will end on expiry of the mortgage term. Part of your mortgage tracks the Bank of England Base Rate.

I am confused, I had assumed my mortgage would just revert to the A&L SVR - currently 5.34% but this para above seems to contradict this?

Grateful for views.

luckyfool

No, the wording of your offer is correct. Many A+L mortgages revert onto lifetime trackers at varying margins above base rate. Yours goes to base +0.99% giving a current rate of 2.49%, you lucky sod.

Philip624

thats what I was thinking but can that really be true? Is it a mistake on A&Ls behalf - like i said it clearly states before this para that it will revert to the variable rate, currently (then) 5.49%? I took this offer out through a mortgage adviser - maybe I should ask him to clarify.

beecher

I'm sure it is true. If interest rates were 4.5% at the time of your offer, the variable rate they quote would be correct. Looks like you've struck lucky

Fliss_M

Yep, same wording on my mortgage offer. Your on a 0.99+BOE tracker. I couldnt believe it myself when I found out but after a quick call they confirmed it. Made my day (heck YEAR!) Plus A&L have no collar, so if intrest rates hit 0, your looking at 0.99%. whoopeeeeee

Welcome aboard my friend, the free bars down below and we have extra people in the crows nest looking for iceburgs! hehehe

Philip624

thanks - i am trying to do the sums on this - i pay 773.96 currently at 4.74% so how much will I save at 2.49%?

beecher

http://www.moneymadeclear.fsa.gov.uk/tools.aspx?Tool=mortgage_calculator

should help

carbonmonoxide

I am on a 3 year fixed rate with A&L too ending in May as well. I wonder if this will apply to me too? I'm sure it said I went onto SVR but off to check this tonight. This would be the best news ever for me if rates continue to stay this low

EDIT: if this is true for me does anyone know if I would be able to continue paying the same amount and overpay the capital?

Fliss_M

carbonmonoxide wrote: »

I am on a 3 year fixed rate with A&L too ending in May as well. I wonder if this will apply to me too? I'm sure it said I went onto SVR but off to check this tonight. This would be the best news ever for me if rates continue to stay this low

EDIT: if this is true for me does anyone know if I would be able to continue paying the same amount and overpay the capital?

Yes you can. Just call them in April and advise you want your monthly payments to stay the same and overpay.

carbonmonoxide

Fliss_M wrote: »

Yes you can. Just call them in April and advise you want your monthly payments to stay the same and overpay.

Cool, thanks for that - I've got my fingers crossed now that I am hopefully on the same deal as the OP!