Interest Rate going up on a Fixed Rate Mortgage?

housebuyer143

Furballs said:

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 

Really weird, yeah you normally agree the product switch and that's it, it starts either right away or at the agreed date... Sounds like the advisor maybe didn't press submit? Admin error like you said.
If that's the case and they made an error, make sure they pay for the increased costs.

born_again

Furballs said:

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. 

Same as ours via Platform ( Co-op )

Fixed rate is due to expire end July this year. Got a letter saying that can apply for a new fixed rate term end Jan. Decided in Feb, as rates are on the up to take out another 5 year term, which is at the same rate & cost. Starts @ end of current term.
Easy task, given no financials required (execution-only mortgage). Simply read & sign agreement & send back.

Surprised that these have not been stopped, given the massive risk of inappropriate lending.

Furballs

housebuyer143 said:

Furballs said:

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 

Really weird, yeah you normally agree the product switch and that's it, it starts either right away or at the agreed date... Sounds like the advisor maybe didn't press submit? Admin error like you said.
If that's the case and they made an error, make sure they pay for the increased costs.

Oh without a doubt I'll be asking some tough questions as to why this has happened. If there is a financial implication then it won't be me paying for such. 

silvercar

born_again said:

Furballs said:

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. 

Same as ours via Platform ( Co-op )

Fixed rate is due to expire end July this year. Got a letter saying that can apply for a new fixed rate term end Jan. Decided in Feb, as rates are on the up to take out another 5 year term, which is at the same rate & cost. Starts @ end of current term.
Easy task, given no financials required (execution-only mortgage). Simply read & sign agreement & send back.

Surprised that these have not been stopped, given the massive risk of inappropriate lending.

Given that the amount borrowed is the same, it isn’t inappropriate. You can’t expect lenders to have the ability to call in the loan at the end of the fixed term or people would be forced out of their home if circumstance have changed. What would be unfair would be not allowing people to fix again and having to find more money to fund a mortgage at the standard rate without any fixed deals.

Furballs

Right then update. 
Spoke to the mortgage adviser today who told me "I kept the deal open as I was looking for a better deal for you"

No idea if this was true or not but as it stands my fixed rate has been reduced so I'm now paying £627 fixed for 5 years and that's down from the initially agreed £658. I'll over pay the £31 now anyways to help clear the mortgage a little bit quicker.

All in all for the worry it's been a good day. Cheers for the advice all. 😁

housebuyer143

Furballs said:

Right then update. 
Spoke to the mortgage adviser today who told me "I kept the deal open as I was looking for a better deal for you"

No idea if this was true or not but as it stands my fixed rate has been reduced so I'm now paying £627 fixed for 5 years and that's down from the initially agreed £658. I'll over pay the £31 now anyways to help clear the mortgage a little bit quicker.

All in all for the worry it's been a good day. Cheers for the advice all. 😁

Wow! Sounds like an error that paid off for that advisor as rates went down... Glad it's all sorted and you are saving money.

ACG

To be fair, it might not be an error. 
Ive got 2 clients I have been doing that for. 

When you receive emails from 3-4 lenders in a week lowering rates, it sort of makes sense that the lender you are planning on using will probably also drop theirs. 

As brokers we normally get emails anywhere from 1 hour to 48 hours in advance. If they tell you they are lowering their rates, you know to hold of. If they tell you they are changing their rates, you know to crack on and get it done. 

JMA74

ACG said:

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. 

Natwest PT is one that springs to mind that requires an actual acceptance post application.   I can't think of any new business that requires it but probably more common in PT's

Furballs

Just to follow up an update. So my fixed rate went down to 4.09% from %4.45. The saving I would have made is now gone straight to a standing order to overpay the mortgage. It's not a lot but over the 5 year term I would over pay and save on interest around the £2.2k if I've worked it our right. Thanks all for your input and advice.