Mortgage interest rate change during offer period

nicrper

Hi,


We are buying our first home and had a mortgage offer issued in June for fixed 2 year product. They also had an example rate that would be variable after the 2 years, so e.g. if the rate was 1.8% for the 2 years, after that point it would be 3.75% (and could rise).


The mortgage offer was mentioned to us as a 9 month product with Santander from our mortgage advisor. This meant it was an offer for 6 months extendable to 9 months. We have got to the point where they need to apply for the extension (which means sending in a payslip and notify of any changes). The mortgage adviser issued the extension offer and it was slightly different - the fixed 2 year rate, all fees and charges was the same, but the rate thereafter is now marked at 4%, the overall amount payable over 35 years has increased by £30k. The advisors fees from Santander have increased as well.


The mortgage advisor says that since the rates after 2 years are variable anyway, this is fine. But in my mind, I feel like the offer has changed, though the 2 year fixed rate and payment is the same. Is this normal though? Am I over thinking this?


Would greatly appreciate any input.


Many thanks.

[Deleted User]

nicrper wrote: »

Am I over thinking this?

Yep. .

spadoosh

The variable rate will change, its an indicative figure only. Its in the name really, its variable.

Im guessing you just went to santander and no one else? So id argue the advisor fees on the basis that you should be able to get a mortgage elsewhere. They should drop them back quickly enough.

butterflybook

it is normal, the variable rate will change in all likelihood - You will review after the 2 year fixed period anyway so there is generally no need to pay too much attention to the variable rate as all lenders are similar

Thrugelmir

nicrper wrote: »

But in my mind, I feel like the offer has changed, though the 2 year fixed rate and payment is the same.

The offer is for a two year product. After the two years is up you are free to do as you wish, i.e. remain on the SVR, choose another product from those available or move your mortgage to another lender. The offer is not contractual beyond the 2 year period.

nicrper

Thanks everyone, ease on our mind for this decision. Very first time looking at mortgages. The fee to the mortgage advisor for this product increased and is paid directly to them from Santander (as part of Santander for intermediaries) so I don't think I can query that as we don't pay it.

kingstreet

The variable rate is higher because the BOE put the base rate up in August. Nothing sinister.

When the first deal ends, you can look for a new one from current lender, or a remortgage to a new lender as well.

nicrper

Thanks very much! Really helps to have everyone's input.