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

DiamondJoe

betmunch wrote: »

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.

You're exactly right. I had no idea the 2 year rate was "approximate", no one has ever explained this to me and I had no reason to question it. Why? The precise definition of 2 years has always been pretty unambiguous to me: 24 months. I was, clearly, wrong. I did not think to check that the definition of 2 years can be made "approximate" by the banks, or that my 24 payments, as specifically outlined in my agreement, could become 27.

I think a conversation with my broker is in order.

DiamondJoe

ginvzt wrote: »

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...

Sorry, this doesn't make sense. Why would I be complaining that the bank would be taking 24 FR payments if interest rates were on the up?

GMS

DiamondJoe wrote: »

You're exactly right. I had no idea the 2 year rate was "approximate", no one has ever explained this to me and I had no reason to question it. Why? The precise definition of 2 years has always been pretty unambiguous to me: 24 months. I was, clearly, wrong. I did not think to check that the definition of 2 years can be made "approximate" by the banks, or that my 24 payments, as specifically outlined in my agreement, could become 27.

I think a conversation with my broker is in order.

Your mortgage offer would have clearly stated the end date. This is the document you have read and understood prior to signing the mortgage deed.

The lender has given an estimated date of completion. This is not set in stone as it cannot possibly be due to the lender not knowing when completion would take place.

Searching for an exactly 2 year fixed mortgage would rule out a hell of a lot of lenders as a lot have a fixed expiry date for the deal which will be moved along by a month on a monthly basis. Your broker has done the right thing in my opinion by searching for deals slightly over 2 years. Maybe this could have been explained to you better but ultimately you accepted the terms of the mortgage.

Out of interest how quickly from receiving the offer did you complete?

betmunch

DiamondJoe wrote: »

You're exactly right. I had no idea the 2 year rate was "approximate", no one has ever explained this to me and I had no reason to question it. Why? The precise definition of 2 years has always been pretty unambiguous to me: 24 months. I was, clearly, wrong. I did not think to check that the definition of 2 years can be made "approximate" by the banks, or that my 24 payments, as specifically outlined in my agreement, could become 27.

I think a conversation with my broker is in order.

OK, now this really does concern me. At first I thought you were a chancer who was trying to get out of his contract 3 months early and get on a cheaper variable rate. Apologises for that.

When you signed up for your mortgage your brokre should have gone through the KFI with you and said something along the lines of ".... and your fixed rate will end on 28/2/2011 at which point you will go onto the variable rate which is currently x%...."

Let us know what your broker says

getmore4less

DiamondJoe wrote: »

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?

Why have you waited nearly two years to point out this mistake?

DiamondJoe

GMS wrote: »

Your mortgage offer would have clearly stated the end date. This is the document you have read and understood prior to signing the mortgage deed.

The lender has given an estimated date of completion. This is not set in stone as it cannot possibly be due to the lender not knowing when completion would take place.

Searching for an exactly 2 year fixed mortgage would rule out a hell of a lot of lenders as a lot have a fixed expiry date for the deal which will be moved along by a month on a monthly basis. Your broker has done the right thing in my opinion by searching for deals slightly over 2 years. Maybe this could have been explained to you better but ultimately you accepted the terms of the mortgage.

Out of interest how quickly from receiving the offer did you complete?

Again, I didn't know this. Thanks for the info, it'll be useful in the future should I ever get another fixed rate deal.

I got the offer 5th Nov 08 and I've got a start date on my welcome letter of 26th Nov. The first payment was made in December.

opinions4u

You can argue it backwards and forwards all you like.

It is standard practice to have an expiry date on a fixed rate and this will be in your offer documentation.

While you might not appreciate it and might not like it, there is nothing you can do.

Talk to the original broker by all means - but he'll have his documentation nicely worded to ensure you have no comeback.

Let it go.

Out of interest, who is the lender, what is the fixed rate and what is their SVR at the end of the deal?

DiamondJoe

getmore4less wrote: »

Why have you waited nearly two years to point out this mistake?

I didn't "wait" two years. I've only just noticed it. As I've said, I assumed (and I was clearly wrong to) that I would be making 24 payments, as that's what it says on my agreement. That's what I thought a 2-year rate meant. I was not aware that an expiry date meant I could theoretically be making more, or less, payments than this, and no one pointed this out to me.

DiamondJoe

betmunch wrote: »

OK, now this really does concern me. At first I thought you were a chancer who was trying to get out of his contract 3 months early and get on a cheaper variable rate. Apologises for that.

When you signed up for your mortgage your brokre should have gone through the KFI with you and said something along the lines of ".... and your fixed rate will end on 28/2/2011 at which point you will go onto the variable rate which is currently x%...."

Let us know what your broker says

No worries. I'm not a 'chancer', I just think if your agreement says you'll make 24 payments, that's what you should make. I don't recall my broker ever mentioning this and I would have picked up on it, I'm sure. He has let me down with a couple of other things though so maybe its par for the course.

DiamondJoe

opinions4u wrote: »

You can argue it backwards and forwards all you like.

It is standard practice to have an expiry date on a fixed rate and this will be in your offer documentation.

While you might not appreciate it and might not like it, there is nothing you can do.

Talk to the original broker by all means - but he'll have his documentation nicely worded to ensure you have no comeback.

Let it go.

Out of interest, who is the lender, what is the fixed rate and what is their SVR at the end of the deal?

Looks like I'll have to let it go. The lender is C&G, the fixed rate is 6.69% and the SVR will be 2.5%.

The money's not the issue, I can afford it no problem, its the principle - it just smacks of a bit of a dirty trick to me. But hey ho, I think I'll just need to take it on the chin.