End of my "2 Year Fixed" - what's next?

redefinr

Hello everyone,

I purchased my first property 2 years ago (I almost cant believe it's already 2 years?!) I had a mortgage with HSBC with a 2 years fixed and a variable straight after...I just got to the end of my 2 year terms and I'm just trying to understand what would be the best move for me now. Also, couple of months ago, I've been introduced to a financial advisor helping me with very small investments in pension funds and she told me to give her a shout when my mortgage terms was over as she could find me the best deal out there.

With the current situation and Bank of England hikes I'm feeling a bit lost. My mortgage rates is been going up since January, small amounts (like £10-15) but still - every month an additional sum. I actually called HSBC to clarify how's a fixed interest for 2 years if then they put the interest up? I've understood that when everything goes up there is nothing they can do (so, is a fixed mortgage really fixed?!).

Anyone else on the same board? I would love to hear other people experiences...

powerspowers

Not sure I understand, are you at the end of your fix? Have you looked at any other fixes with your current lender or do you want to switch lender? I’ve always stayed with the same lender as they’ve been able to offer a fix that is competitive enough for me to not go through the hassle of switching 

redefinr

Yeah I'm in the end of the 2 year fix - I'm with you on that, I'd rather stay with the same lender as long as there isn't anything much more valuable out there. Am I going to be able to have a fixed from now on even though I signed up for a variable mortgage?

powerspowers

If you aren’t tied in than I can’t see why not. My bank spammed me with offers at the end of my fixed rate so I’m surprised they haven’t corresponded with you. 

redefinr

powerspowers said:

If you aren’t tied in than I can’t see why not. My bank spammed me with offers at the end of my fixed rate so I’m surprised they haven’t corresponded with you. 

Quick question: what's the point to have a fixed rate if the interest actually goes up? Mine was fixed for a year but as I said, it's been going up in the last months.....

FarmGirl78

So to clarify...

You bought your house 2 years ago, at the time taking out a mortgage which was fixed rate for 1 year?

If this is correct then after that first year was up (12 months ago) you would have automatically moved to the banks standard variable rate. This isn't fixed, so in January when the BofE interest rate started to increase your bank would have increased the rate on their standard variable mortgage. Hence your mortgage payment increasing. Most banks alter their standard variable rate to reflect changes in the BofE base rate.

You say in one place you were fixed for 2 years, in another place you say you were fixed for a year, and you've also said you have signed up for a variable rate. Please can you clarify?

redefinr

Sorry I haven't been clear: it was fixed for 2 years. But when I look at my bank account I saw my interest rate going up before the 2 years terms ended.

FarmGirl78

I've got no explanation for that then. You sure it wasn't a discounted tracker mortgage? Rather than ask the bank why the interest rate changed (because they might be misunderstanding your question) you need to ask them what date your fixed rate product ended. If you log into your internet banking in your mortgage account (rather than your current account where the money is taken from) you might be able to see a history of the interest rates you've been paying.

Do you have any emails or letters/paperwork from when you first took your mortgage out? It should all be in your mortgage offer.

redefinr

FarmGirl78 said:

I've got no explanation for that then. You sure it wasn't a discounted tracker mortgage? Rather than ask the bank why the interest rate changed (because they might be misunderstanding your question) you need to ask them what date your fixed rate product ended. If you log into your internet banking in your mortgage account (rather than your current account where the money is taken from) you might be able to see a history of the interest rates you've been paying.

Do you have any emails or letters/paperwork from when you first took your mortgage out? It should all be in your mortgage offer.

You totally right. I just called the bank yeah it's tracker rate. I'm getting a bit worried with the interest going up every month.
I've been told I can switch to fixed (so, my current rate is 3.54% and with fixed I can get 3.37%) but there is a mandatory £900 fee to pay. A bit of a !!!!!!! Am I risking quite a lot being on a tracker due the current market situation which it doesn't seem to end any time soon?

Schoolworker

I personally prefer a fixed for a set term so that you know what comes out of your bank and it does not increase with any boe increases. If going for a fixed for 2 yrs if you need to change this there maybe an exit fee.
We managed to get a 2 yr fixed deal with no fee - a bit higher rate than the fee paying one for 2 yrs in june. Our deal was due to expire in sept but you can go into a new deal about 3-5months before it expires. Good luck. 

redefinr

I'm thinking to switch. I spoke with a broker yesterday and she found me a good fixed with the same lender (HSBC) without paying the £1000 fee so I'm really considering it. It's a 5 year fixed though - does lenders usually give small windows like this?