Mortgage early redemption penalty applying after fixed period has ended?

[Deleted User]

We have a 5 year fixed rate mortgage with Virgin which we took out on 16/03/2016.
We are selling up and moving on the 23rd - to a rented house.
We assumed that this meant that we had avoided the early redemption penalty.
But it turns out that the penalty applies until 31/05 - more than 2 months after the fixed period ends.
How is that possible?  There must have been something in the small print, but surely it's out of order to do something like that.
Is there anything I can do about it?

Mahsroh

Best thing you can do is go back and check your Mortgage offer but it's not uncommon. I started a "2 year" fixed deal in November 2019 with Nat West which ends on 31/01/2022. Also 26months (and a few days).  

For me though the end date was very clear in the Mortgage offer.  

davidmcn

As above, the deals tend to be wholesale and the whole batch will have the same end date, irrespective of when your mortgage completed. So I suspect you actually have a fixed rate which ends on 31 May.

Thrugelmir

Your mortgage offer will have very clearly stated the end date of the fixed term product. Mortgage products will never finish mid month. As interest is calculated automatically at the end by systems. 

dunstonh

How is that possible?

Because fixed rate deals have a specific end date.   They are not for x number of years from when you took the mortgage out.

There must have been something in the small print, but surely it's out of order to do something like that.

it is not in the small print.  It is in clear text on the mortgage offer letter that you signed saying you read and understood.  It is not out of order either.   After all, if you buy a deal that says you will pay x.x% until 31st May 2021 then you expect that deal to be honoured.

Mortgage deals themselves are bundled into tranches.   The fixed date applies to everyone in that tranche regardless of when their mortgage was advanced.    Some people will get 5 years 4 months.  Others will get 4 years 10 months or anything in between.

Is there anything I can do about it?

No.  As it is your misunderstanding rather than an error.

[Deleted User]

Are you always that dismissive with your clients?  Must be a great way to make a living.

getmore4less

AOandLO said:

Are you always that dismissive with your clients?  Must be a great way to make a living.

Sure the advisors here are pretty good at explaining to their clients up front what they are buying into and things like ERC sand how long tye last

if yours failed to advise you properly you need to go back to them and have a moan.

dunstonh

AOandLO said:

Are you always that dismissive with your clients?  Must be a great way to make a living.

Are you always that dismissive about taking personal responsibility for your own failures?

runforlife

I find that every year in the mortgage statement it states how much you will have to pay in redemption fees if you settle the mortgage before a certain date.