When two years isn't two years...

lins_2

Hello,

I was just wondering how common this problem is.

We moved last year and took out a 2 year fixed rate discount with the Halifax - mainly because our current mortgage was with the Halifax and there was a fairly hefty penalty for switching that they were prepared to waive.

Anyway, we sorted the mortage out in March and was told the offer was open until the end of July 07. As it happened there were a few complications and we ended up moving on July 12th.

When my mortgage offer and whatnot came out after we moved I discovered that the product that we had bought was not actually a two year product but ended at the end of April 08, regardless of when we moved. I was pretty furious because we were tied into their mortgage until the end of May so they knew we weren't planning to move until after that - and when they had given us the example product the advisor chose a date that was in April 06 "as an example" so it looked as though the product was in fact a two year product.

Am I really naive? Do all mortgage compaines do this now? Am I alone in thinking this is really underhand? I have complained to the Halifax and have been offered some money to make up for the difference for the three months that we are going to be paying full whack so it's not really the money that is the issue. What I am concerned about is that it never occured to me that a two year product wouldn't last for two years. We will be looking to remortgage next year (ha their base rate is now a huge £175 higher than what we are currently paying) and I'm really concerned about getting caught out again.

I am also half wondering whether I should complain to the Financial Ombudsman anyway because I do feel really strongly that we were missold - not so that we would get more money but so that they would have to stop calling them "two year" products. What do you think? Or should I take the money and run!

lins xxx

cattie

Yes it's a fairly common occurence for a fixed or special offer mortgage to end before the actual term you assume it will last.

I believe it's to do with when the lender launches or offers the product, the period runs from this date irrispective of when the mortgage actually commenced.

You need to read you actual mortgage offer as this will state when the deal actually ends & note the fact that you will then be put on a variable rate mortgage.

I've always had a tracker mortgage & make sure I check my mortgage offer well before the deal I've signed up for is due to end so I can make an appointment to see what else they can offer me when it does finish.

robnye

ditto - if you sign at towards the end of the actual offer then the length of term can take you past the 2 year term, although i havent heard of this often...... ie when we have taken 2 year deals out in the past, they have been for 2 years....... and not 20 months etc

jennifernil

If the deal is only for a certain length of time does that not mean you can switch at the end of that time?

We have had 2 so called "2year deals" and both have actually lasted for 25 months before reverting to the SVR, so the opposite of yours. And our daughter had a 3 year deal with Halifax that was actually 39 months.

lins_2

If the deal is only for a certain length of time does that not mean you can switch at the end of that time?

Yes I mean we can switch in April - the bit that really annoyed me is that I had worked out what our best deal would be and it was actually very close to being the Nationwide and even being tied in it would still have been almost as cheap to switch. I explained this to the mortgage advisor at the Halifax and showed her my calculations based on 24 months and she never said anything (funnily enough). As the Nationwide was a three year deal it would have worked out cheaper had we assumed we were going to lose a few months.

And as for reading our mortgage offer - we did! The thing is it said it was assuming we were moving on Apr 16th - which we knew we weren't - and we were told that was just an example. So when it said that it ended in Apr 08 we thought that was because it was a 24 month product - I mean that's what it had always been called. If we'd put in Jun 1st which was the earliest date we were going to move it would have suddenly been obvious it was no longer a 24 month product.

Wow I just can't believe they get away with calling them two year deals and saying they will hold them open for X number of months - when really holding that offer open for you just costs you money and increases their profits. That just seems so wrong!

lins xxx

MuDvAyNeX

Yep, when you take out a Fixed period it has fixed end date, some are longer than 2yrs and some are shorter.

It depends when you take it out, where i work we have been offering Fixed rates with an End date of the 31st July 2009/10 etc, if your taking it out now then its almost exect 2 years, but some people took these out 4 months ago so there fixed rate is longer than 2 years.

Hope it makes sense.