when a 2 year fixed rate is not 24 months!

red_debs

I am about to remortgage one of my buy to let mortgages with the Mortgage Works and have spotted something that I really don't understand and hope someone can enlighten me.

My current deal ends 31/10/26 and have just been told I can look at my options now.

The one that looks the best is to take a fixed rate of 5.74% (limited company rates) over 2 years with no product fee, although there is a close 2nd with 2years at 4.24% with a 3% product fee.

The issue I have is that when I read the product offer it states that the switch will start 1/11/26 - no problem with that as that is the day after my current rate finishes, however further down it also states

A fixed rate of 5.74% until 31st August 2028, followed by The Mortgage Works (UK) plc Managed Variable Rate (Issue 7), currently 8.24%, for the remaining term of the mortgage.

But from November to August is only 22 months not 2 years.

Further confusion in the following section that states:

These payments are based on the mortgage balance of £xx,xxx.xx and the term remaining of 18 years and 3 months at 5 August 2026.
25 payments at a fixed rate of 5.74% £397.24
followed by 194 payments at a variable rate, currently 8.24% £569.93

Where does 25 months come from?

Can anyone help me out to understand this as it is head scratching!

.

Yorkie1

It is fairly common for mortgage products to have fixed expiry dates rather than depending on the precise date you sign the document.

Tranches of money are allocated to the product, and it makes it far easier to manage for the lender.

red_debs

I understand that but surely that is misrepresenting the product? Also why say 25 months when it’s not

ACG

25 months is based on you completing on 1st September - Illustrations will always assume you complete on the 1st of the following month.

2/3/5 year fixed rates tend to have fixed end dates, meaning they may not be exactly 2/3/5 years. Leave it a month or 2 and you will probably be able to get something that will be closer to 24 months.

RelievedSheff

We have it the other way around. Our 5 year fix that we took out in mid March this year is actually 62 and a half months and will finish on 31st May 2031.

Luckily we managed to fix the rate in January before the Iran war started so we got a decent rate at 4.04%.

kingstreet

Illustrations and mortgage offers don't usually say "fixed for two years" etc they say "fixed at x% until DD/MM/YYYY" so convention may be to describe it as a two year fix when it is more accurately described on the documentation. You'll probably find the same on the paperwork for your current product.