Could someone explain the mechanics of this 8 March at 7:55AM in Mortgages & endowments 4 replies 277 views

Dannyboy13

Hopefully someone can explain how this works, so still toying with different options for when my current mortgage fixed rate product ends on the 2nd April this year and i move onto the SVR. When looking at options to stay with current lender can anyone explain how/why if i choose another 2 year fixed rate deal as part of a product transfer the end date would be the 2nd June 2025 and not April... Thanks in advance

ACG

Lenders offer fixed end dates a lot of the time. I think it is something to do with funding. 
Its not uncommon for a 2 year fix to be anywhere between 22-26 months. 

penners324

Mortgage companies buy chunks of Mortgage funding on the interbank market which will have a fixed end date. 
They align their products to match that end date 

dunstonh

Mortgages can be funded by a number of different sources.  One is mentioned above.   Most of these sources of funding make the money available for a period of time using fixed dates.     So, the tranche of the mortgage deal will match those dates irrespective of the day you actually complete.      

Lenders are allowed to round to the nearest year when discussing the deal.   Typically, if you complete early within the issue of that tranche, you will get longer than the headline fixed term.  If you complete later in the issue of that tranche you get shorter than the headline fixed term.

Dannyboy13

Thanks for your replies everyone sounds like there is nothing new here or unusual which is reassuring.