End of Fixed Rate Period

mattydalton

Hi

I signed up for a 2 year fixed rate mortgage and made my first payment on 1st June 2007. By my calculations this means that I have now paid 24 monthly installments and the payment on 1st June 2009 will be the 25th payment. This would lead me to believe that I will have gone past the fixed rate period and should therefore be charged the variable rate of interest. I called my mortgage company to check what my new payment would be and they said it would not change until the 1st July 2009.

Does this sound right? I thought 2 years meant 2 years....

samizdat

Not necessarily. Your key facts document or annual mortgage statement should tell you the exact date that your fixed-rate period comes to an end.

Depending on your mortgage terms, the rate you will be charged after the end of the fixed rate period may or may not be competitive. You should therefore evaluate whether you should remortgage, taking into account the costs of doing so as well as the headline interest rate. You should also consider whether you wish to go into another fixed rate deal or want a variable rate.

mattydalton

samizdat wrote: »

Not necessarily. Your key facts document or annual mortgage statement should tell you the exact date that your fixed-rate period comes to an end.

Depending on your mortgage terms, the rate you will be charged after the end of the fixed rate period may or may not be competitive. You should therefore evaluate whether you should remortgage, taking into account the costs of doing so as well as the headline interest rate. You should also consider whether you wish to go into another fixed rate deal or want a variable rate.

I think the exact date is 1st June 2009 but is the interest not calculated daily on all mortgages meaning there should be a change?

I am actually trying to sell my house at the moment so remortgaging is a definite no-no as I don't want to be forced to pay a fee.

System

Mine was an extra month as well, probably because the mortgage was first paid 6 weeks after we moved in.

samizdat

What can happen is that the mortgage company will review payments each month. If your fixed rate ends on 1st June, the same day as your next mortgage payment, then it may well be that the monthly review won't be triggered until the following month.

You could call them and ask if they will make the adjustment in time for the next payment. If no adjustment is made until 1st July and your follow-on rate is below the fixed rate, any surplus would just reduce your outstanding mortgage balance. So you wouldn't lose out overall but obviously you would lose access to the surplus money, which you might want to keep hold of.

mattydalton

Ok, that makes sense. It's a shame though as it is a joint mortgage and we have split - I have not had a penny off her since January and she will get half as there is not enough equity for it to be worth my while fighting her. It just means I am paying more off for her :mad: