My 2 year fix is only 23 months - is this normal?

michaels

At the end of May I was able to lock in a new fixed rate with my lender to start when my then current fix ended on 2nd October.

The new deal started yesterday but I was surprised to see the end date for the rate is now 5th September 2025 not 2nd October.  Basically my two year fix is only for 23 months.  I do feel slightly short changed as the arrangement fee (1000) I thought covered 23 months and so did 1000/24 when I was working out the effective rate.  1000/23 is not a huge difference but it seems odd that they can sell a two year product that only lasts 23 months.

bluelad1927

Isn't October 2025 the 25th month with your first payment at the new rate being in October 2023

MWT

michaels said:

The new deal started yesterday but I was surprised to see the end date for the rate is now 5th September 2025 not 2nd October.

Many lenders specify an end date for a product, it will be in the information you were given at the time.

Sometimes that results in a '2 year fix' being longer or shorter than 24 months depending on when you actually moved onto the new rate.

RelievedSheff

Perfectly normal. Our 5 year fix is the other way around. It's 61 months rather than 60.

dunstonh

  I do feel slightly short changed as the arrangement fee (1000) I thought covered 23 months and so did 1000/24 when I was working out the effective rate.

Deals are always priced to a fixed date and not the period of x years from the point the mortgage is advanced.  you are not being short changed as your deal was always to that date and that hasn't changed.

When a new deal is launched it will usually be to a fixed date that is x years and y months.  Those that complete their mortgage quickly, will get more under the fixed rate period than those that take longer to complete.

 1000/23 is not a huge difference but it seems odd that they can sell a two year product that only lasts 23 months.

At the point you bought the deal, the end date would have been longer than two years but it would have made clear that it was to a fixed date and not a two year term.

la531983

RelievedSheff said:

Perfectly normal. Our 5 year fix is the other way around. It's 61 months rather than 60.

Snap. A life lesson for the OP to read the end date, and not look at the catchy headline. 

ACG

Most lenders have fixed end dates. It would have been on all of the paperwork. It is one of the downsides of lenders now allow you to choose a new product 6 months early. They used to allow 3 months early and give the product 27 months - therefore by the time you complete you end up with 24 months. 

You booked the rate in May, you could have had 29 months but I am guessing the new rate was higher. 

I am guilty of not reading paperwork on things like energy bills and phone contracts so I am in no position to judge, but you need to read the paperwork in future. The offers are split up in to sections to make it easier to digest. 

michaels

Not arguing that it is my fault for not reading the T&C, just wondering how they can quote an APR if the 'same' deal last 25 months for some people and 23 months for others - surely the two borrowers will see a different APR?