My Fixed Rate Mortgage Interest Rate Went Down!?

tylerdurdenk

In July I took out an additional mortgage with Nationwide in order to build an extension to our bungalow. The mortgage we took out for our extension was agreed at 4.09% Fixed for 3 years.

I have just had a statement that shows the interest rate is currently being charged at just 2.5%. I have confirmed this by looking at that mortgage through online banking.

Now I'm not complaining, but is it possible that they have messed up and will ask for the rest of the interest in the future? Or is there a chance that if they have started taking payments under these terms they will have to continue doing so?

shortchanged_2

Did you by any chance take out a further loan to fund the extension?

tylerdurdenk

No, just this new mortgage.

shortchanged_2

tylerdurdenk wrote: »

No, just this new mortgage.

You say you took out an additional mortgage.

I take it that you already had a mortgage with Nationwide.

So any futher lending you take out with them say an extra £20K to fund an extension would be called a homeowner loan which would often be on different terms to your original agreement say on a higher rate and then a higher follow on rate.

So say your original mortgage was £100K this part stays on the original terms and rates and the 'extra' £20K you borrowed would more than likely be at a higher rate and probably a higher follow on rate as well.

tylerdurdenk

We currently have 3 mortgages with Nationwide:

A 10 Year fixed at 5.19%
One that is currently tracking at 0.68%
and this new one....

Definitely all mortgages.

shortchanged_2

It sounds like your 10 year fix has now reverted to the SVR at 2.5%, which I assume was your original mortgage.

I would say your futher mortgages are in fact further borrowing or as I stated earlier homeowner loans.

tylerdurdenk

Nope. 10 Year fixed still has 3 years to go, and still shows at 5.19%, and as I stated earlier they are definitely all mortgages.

Thanks for your input.

tylerdurdenk

The second and third mortgages are shown as "Further Advance"s on my online banking.

shortchanged_2

tylerdurdenk wrote: »

Nope. 10 Year fixed still has 3 years to go, and still shows at 5.19%, and as I stated earlier they are definitely all mortgages.

Thanks for your input.

Well the only other thing I would say is that they have either obviously made an error or have you misread that the mortgage reverts to the rate of 2.5% and you are thinking that is the current rate you are paying.

Best check it out for sure I suppose.

tylerdurdenk

OK, let's assume I'm not an idiot.

What are my rights if they have made a mistake?

shortchanged_2

tylerdurdenk wrote: »

The second and third mortgages are shown as "Further Advance"s on my online banking.

OK that's what I was thinking and as I stated earleir I would guess they are on different terms and rates.

But I'm not sure as to why you are paying a rate of 2.5% if you still have 3 years left on your 10 year fix. There must be an error somewhere.