mortgage tie in

richclar

I asked for and thought i was on a 1 year fixed rate with the woolwich for my mortgage with no tie ins. At the end of the 1 year i get a letter telling me i am now on a 2 year tracker which means my payments have gone up £150 pm. They told me that to get out of it would cost me approx £3000. Apparently part of the deal was that i go onto this rate. Has anyone got any ideas, i would not have gone for this product if i had known about the 2 year tie in.

mattygg

It sounds to me like you were in a "stepper" mortgage. How these work is that they give you a cheap deal for the first year to tie you in then for the remaining period they give you a more expensive rate.

For example,

Year 1 - 4.5%
Year 2 - 5.5%
Year 3 - 6.5%

When you get a mortgage like this they usually put something like "typical APR 5.5%". This is the rate you actually pay over the whole period.

What you could do is have a look at a different company and get a quote and see how much it would cost you per month. Then see if you would save more than £3000 over the remaining 2 years. If so then you could just add the £3000 to your mortgage and change company. You might need to think about interest though.

Matt

herbiesjp

Have you checked against the offer letter you received?