Advice needed - Mortgage term ended 3 years ago

onedaymyfriend

Good morning all, I'm after some advice.

At the age of 55 my father purchased a property on a 12yr mortgage, and lived there for a number of years. He then moved back home, informing the lender that he was moving and and planned on letting it out. The lender amended the monthly payment amount as appropriate.

Bearing in mind that the term was 12 years, 15 years have now past and the lender has got in touch to say that the term has ended and that they will not be renewing. The lender claims they they sent a letter 3 years ago informing my Dad that they would not be renewing, this letter was never received

We've managed to find a buyer and the sale should complete by June.

My question is, should my father have been paying the same rate of interest during the 3 years which where out of term? They continued taking the monthly payments for another 3 years, before sending another letter informing him of not renewing.

Thanks for any advice,

D~

davidmcn

Not sure what he thinks ought to have happened? I presume we're talking about an interest-only mortgage. If he still owed the money then they're going to continue charging interest.

onedaymyfriend

davidmcn wrote: »

Not sure what he thinks ought to have happened? I presume we're talking about an interest-only mortgage. If he still owed the money then they're going to continue charging interest.

He's not thinking anything, I'm enquiring. I wasn't sure that as it was out of term that the interest rate should have come down? I read somewhere of a similar situation where the interest rate was reduced to that of base rate.

davidmcn

I would expect it to continue at their standard variable rate.

Tom99

onedaymyfriend wrote: »

He's not thinking anything, I'm enquiring. I wasn't sure that as it was out of term that the interest rate should have come down? I read somewhere of a similar situation where the interest rate was reduced to that of base rate.

That would be the mortgage co's base rate not the BoE base rate.

enthusiasticsaver

If the term expired then the lender would normally get in touch and ask the borrower on proposals, ie whether they want to extend the term if they were able to or full repayment. As they say they wrote to your dad and he says he did not get the letter I am not sure they could have done any more. Presumably your father also knew the term had expired?

The interest rate charged presumably was the mortgage co SVR although if it was a BTL it would normally be higher so I assume that is the rate your father has been paying? That would not have changed if the term expired as that is a totally separate thing.