Bank seems to be extending my Fixed Rate by 3 months - can they do this?

DiamondJoe

My 2 year fixed rate mortgage agreement from 2008 states that "this offer assumes that the mortgage will start on 1/02/09" and my first payment will be followed by 23 payments before switching to SVR. However our first payment was actually made 2 months before this, meaning that we will have made the 24 payments on 31st November 2010. However my bank thinks that my final fixed rate payment will be Feb 2011 - this would mean I would have made 27 fixed-rate payments.

I have queried this with the bank and they say that my agreement states that I will be on a fixed rate until 28/2/2011. However I think that because the mortgage started earlier than is stated on the agreement this is a mistake and it should revert to SVR after I have made 24 payments. They are looking into it, but (call me cynical) I suspect they won't budge.

Can they do this? If it states on the agreement that I'll make 24 payments at a fixed rate, surely they can't just say, no actually you're making 27?

opinions4u

Most banks have an expiry date on a fixed rate mortgage, rather than a specific time period.

So look at your Key Facts document. That should state "fixed until dd/mm/yy".

If you complain, this is the document that will determine the outcome of a complaint.

DiamondJoe

The mortgage agreement does state a fixed rate until 28th Feb 2011. However it also states it "assumes the mortgage will start on 01/02/09", and it didn't, it started 2 months earlier, and it states that I will be making 24 fixed rate payments. If the bank says I must make 27 fixed rate payments does this not contradict what is in the agreement? I would have no problem accepting a fixed rate until Feb if my mortgage had started in Feb 2 years ago, but it didn't. As I see it the agreement is inaccurate with the assumed start date, and to charge me 27 FR payments directly contradicts the agreement. Am I wrong?

Radiantsoul

I suspect the fixed date overrides the assumed start date.

DiamondJoe

But if you're then going to be making more than 24 FR payments, shouldn't there be something in the agreement that alludes to this? To me its unequivocal in the document- 24 FR payments. Not 27.

betmunch

There was a similar question to this recently.

If it says the fixed rate ends on a certain date then the fixed rate ends on a certain date.

I hear what you are saying about the assumed start date not being correct, but it is the ammount of payments you have on the fixed rate that changes, not the final day on the fixed rate.

if you had started the fixed rate sooner you would have had more payments on the fixed rate. If you had delayed your purchase/remortgage then you would have less payments on the fixed rate.

For absolute clarity, get your offer letter out, check the date on there. That is what you have signed for and that is when your fixed rate ends.

Thrugelmir

One reason for the disrecepancy is that your mortgage offer could have expired if the funds had not been drawn down by the 31st January.

Overriding this however. For administrative purposes the bank will have aligned all mortgages on the same terms to end on the same expiry date. As at that time of expiry all the mortgages will default onto secondary term rates. This will will be an automatic process built into the system .

If it was to your benefit no doubt you'd be more than happy to accept the terms. So swings and roundabouts so to speak.

DiamondJoe

betmunch wrote: »

There was a similar question to this recently.

If it says the fixed rate ends on a certain date then the fixed rate ends on a certain date.

I hear what you are saying about the assumed start date not being correct, but it is the ammount of payments you have on the fixed rate that changes, not the final day on the fixed rate.

if you had started the fixed rate sooner you would have had more payments on the fixed rate. If you had delayed your purchase/remortgage then you would have less payments on the fixed rate.

For absolute clarity, get your offer letter out, check the date on there. That is what you have signed for and that is when your fixed rate ends.

The date is the 28th Feb. But I don't see anything in the agreement about how my 24 payments can suddenly become 27. Or, indeed, how they might have become 22 payments. It seems to me that if the assumed start date is incorrect the bank should account for that.

DiamondJoe

Thrugelmir wrote: »

One reason for the disrecepancy is that your mortgage offer could have expired if the funds had not been drawn down by the 31st January.

Overriding this however. For administrative purposes the bank will have aligned all mortgages on the same terms to end on the same expiry date. As at that time of expiry all the mortgages will default onto secondary term rates. This will will be an automatic process built into the system .

If it was to your benefit no doubt you'd be more than happy to accept the terms. So swings and roundabouts so to speak.

I appreciate your reply and I'm genuinely not having a pop, but talk of "administrative purposes" and "automatic processes" gets up my pipe when we're talking about a few hundred quid. I don't get how it is justifiable that my agreement clearly states I will make 24 payments and now they say it will be 27. I can't see this as anything other than a shafting.

betmunch

DiamondJoe wrote: »

The date is the 28th Feb. But I don't see anything in the agreement about how my 24 payments can suddenly become 27. Or, indeed, how they might have become 22 payments. It seems to me that if the assumed start date is incorrect the bank should account for that.

The date of the end of the fix is the 28th feb 2011 then. It always has been, it always will be. That is what you have signed up to.

I think you must be gettng hung up on the fact its a two year fix but your getting more than 24 months of a fixed rate. Its the 2 years that is aproximate, not the date the fix ends.

Lenders will call their rates 2, 3, 5 year fixes even though the actual months fixed my differ slightly they will always be around the 24,36,60 mark.

If it really was that important to you to have exactly 24 months fixed then you should have delayed the completion until feb 2009.

ginvzt

I guess if it was the other way around, and the interest rates were on the up now, the OP would be complaining that the bank is taking 24 payments, instead of ending it on February 2011...