Interest Rate going up on a Fixed Rate Mortgage?

housebuyer143

Furballs said:

housebuyer143 said:

Have you got the KFI doc the broker would have given you to show which rate you were signing up to?
If that's fixed then you have nothing to worry about as that's proof what you signed up to.

Some of your mortgage will always be on a variable rate on the documents because after the fixed, it will revert to the SVR.

I do. But as my response above. I understand that after the 5 year term we would switch to the SVR but it seems a caveat here is the "Lender Variable rate" which I believe they've snuck in just before our new mortgage kicks in. 

The lenders SVR can change at any time so ignore any increase in that, if that's what the letter states. It will not be what it is now in 5 years or even next month. 

As long as your fixed rate is correct then there is no problem. Your fixed rate will not be allowed to go up providing they have made you the offer and you have accepted it and it's still in date.

Furballs

Same lender and yes we accepted the offer.
Looking at the offer letter again, the new offer starts on May 1st. This is when the old fixed rate deal is due to end but there seems to be a caveat that states the products available to me can change.

Perhaps they have taken the chance to raise the payment by £20 per month before the new Mortgage starts and perhaps this was a part of my own ignorance here and not knowing. I don't recall it being explained to myself or my Partner that if we waited till May the 1st that a lender charge could be increased. 

It's not bank breaking but still annoying that I'll be paying out just under an extra £1000 over the 5 years.

Furballs

born_again said:

Furballs said:

I have all the paperwork. 
The recommendation letter that states we have been offered a fixed rate product that means our interest rate will not change during the fixed rate period. 
Then goes on to tell us that after the 5 year rate what the interest rate will be and that after 5 years we go on to the standard variable rate. 
The paperwork goes on the tell us that the offer remains valid till the 13th December 2022. After that date, it may change in line with Market conditions.

I also have another batch of paperwork that tells us when the bank can change the "lender variable rate" 

The new payment is due to kick in on the 1st May. 
I may be reading this wrong but the bank it seems have taken the chance to raise the rate before our new fixed rate kicks in. (Mortgage is going up £20 per month)

Either way, What I signed up to was a 5 year fixed deal at 4.45%

Thoughts.

Is that a typo & should be 2023?

No, we apparently were one of the select accounts that could reportage 6 months before I deal was due to expire. 

Furballs

housebuyer143 said:

Furballs said:

housebuyer143 said:

Have you got the KFI doc the broker would have given you to show which rate you were signing up to?
If that's fixed then you have nothing to worry about as that's proof what you signed up to.

Some of your mortgage will always be on a variable rate on the documents because after the fixed, it will revert to the SVR.

I do. But as my response above. I understand that after the 5 year term we would switch to the SVR but it seems a caveat here is the "Lender Variable rate" which I believe they've snuck in just before our new mortgage kicks in. 

The lenders SVR can change at any time so ignore any increase in that, if that's what the letter states. It will not be what it is now in 5 years or even next month. 

As long as your fixed rate is correct then there is no problem. Your fixed rate will not be allowed to go up providing they have made you the offer and you have accepted it and it's still in date.

I will call them tomorrow anyways and ask them to explain. Best case scenario is it's an error. Worst case scenario is that I pay out just under £1k over the next 5 years.

ACG

With 99% of lenders, you secure the rate on application (assuming a fixed rate which is what you have applied for). The rest you secure on offer. 
You have an offer by all accounts so you have secured the rate, what you are paying wont be increasing from what you applied for - assuming you/the broker applied for the correct product. 

Speak to the lender tomorrow or your broker if you used one. They will sort it all out. 

kingstreet

Your existing product is due to end and the lender is informing you of the new standard variable rate, if it would apply.

Your new fix will supercede this from 1 May. I echo what housebuyer143 says above. Lenders usually tell you to ignore these communications. As an example, I got one from my lender before my last fix ended in December despite having a new product start on 1 Jan.

Furballs

Hi, quick update for anyone that's interested. 
Spoke to the mortgage provider who tried he's best to be helpful. 
He said from what he could see that we hadn't accepted the offer which I countered straight away with "I have the email from the mortgage adviser that says our new deal is ready to go from the 1st of May and there's nothing more required"
Seems this has been an admin error but I'm awaiting to speak with the actual mortgage adviser to find out what exaclty has gone on. Hopefully this will be cleared up in the next few days. 

ACG

You do not really accept mortgage offers anymore except for some small mortgage lenders (little building societies usually). 
They work on the assumption that if you complete, you accepted the offer. 

Even with the little building societies, they do not change the product once the offer has been produced. 

housebuyer143

Did you remortgage with a new lender? You don't actually accept offers anymore but you complete before the offer expires and that is your acceptance.
What date was the offer made to you? 

Furballs

Nope same lender. Like I said though I've had the email saying everything has gone through etc. Will update once I've spoken to the original mortgage adviser