2yr fixed becomes 18mnth fixed..

majdrew

Hi,
Has anyone had the same experience as me? I took out a 2 yr fixed rate mortgage with Bank of Scotland.
In all the documents sent to me when i took it out, was a sheet detailing exactly what i'd be paying, month by month, for 24 months, and then it would revert to the variable rate..
But, in the same documents, is the end of the fixed period date... and lo and behold, it is 6 months before my 2yr deal should have ended!
So, I actually have a fixed rate for 18 months!
Is this common? I feel that things have been miss-represented, but the bank tells me this is common practice, and the FSA is fine with it, they say.
I'd be interested if anyone else has come across this.

Regards
Mark.

Rafter

Mark,

Might be a case of buyer beware. When you first saw the ad it was probably 2 years before the scheme end date but by the time you had applied and taken out the mortgage the time was much less.

There is a scandal brewing though about 2 year mortgages in my view. Advisors like them because they earn a juicy fee every 2 years. The rates look sexy compared to other products because banks subsidise the rate by using large fees. Often customers on interest only mortgages end up owing more than their original loan because of all the fees added up front.

This is partly what led to the current crisis in the US.

Personally I think they shouldn't be able to advertise the rate without including the fees and total costs to avoid deceiving consumers.

Back to your situation though......

It may be worth complaining and see if they can transfer you to a true 2 year product from the date you completed on your mortgage.

Mortgage providers can do this before you complete, whether they will do it once you are up and running depends how much RBS want to retain your business in the future.

Good luck

R.

majdrew

I appreciate your reply. I think I will write a letter and complain, to see where it gets me..

Mark.

Leon_W

Rafter.

Most clients actually ask for a two year deal. I don't believe they are being talked into it. I, myself, have just gone for another two year deal, and yes there were fees, but I like to keep my options open. Most people do. If somebody approaches a car salesman and asks for a Fiesta you ain't gonna be trying to sell him an Astra are you ?

"Personally I think they shouldn't be able to advertise the rate without including the fees and total costs to avoid deceiving consumers."

All costs and fees are listed on the Key Features so unless the customer does not actually read it then I don't really know what you are complaining about here.

"This is partly what led to the current crisis in the US."

You say about adding fees to a mortgage. You clearly do not know what you are talking about as this has nothing to do with what caused the situation in the US at all.

Majdrew

As Rafter does say, you have a mortgage with an end date, not a period of 2 years after the mortgage completes. I would check the Key Features you were given to see what that said. If this differs from what you have got you may have grounds for compliant, but if it states the same end date then I don't think complaining will get you far.

All the best.

dunstonh

Nothing wrong here.

Most two year fixed rates (or any fixed rate for that matter) have an expiry date on it. Sometimes it can be a little longer than the period. If you have had a long chain and taken a while to get the mortgage advanced, you may already have eaten up some of that period and only have a reduced period left. It cannot be helped. Another good reason not to have a 2 year fix.

Complaining is a waste of time and here is why:

http://www.halifax.co.uk/mortgages/fixeduntil2008.asp

Take a look at the date on the deals. Currently 30th November 2009 on the 2 year fix. Your mortgage KFI that was issued to you before you completed any application would have the details saying similar. If someone applying for one of these deals is in a chain and doesnt complete until February, the fixed rate still runs out on 30th Nov 2009.

Gorgeous_George

Yep, no point complaining. Except it costs nothing to complain and makes you feel better

I thought the fees etc were included in the APR. But that probably assumes the borrower will stick with that deal for 25 years so will be meaningless for serial switchers.

People will learn that 2, 3 and even 5 year deals are pants. Fix for 10 or 25 years or settle for a lifetime BR tracker (like me).

GG