My five-year mortgage is due two months earlier than I thought: was there a mistake?

I took out a five-year fixed-term mortgage with The Mortgage Works in 2018. The mortgage offer was made on August 21, 2018 and said it was valid for six months, so I assumed the mortgage was due September 1.

However, the mortgage did not start until November 28, 2018. I still have a document entitled ‘Your mortgage and insurance payment arrangements’ that says: ‘The first payment will be debited from your current account by direct debit on November 28, 2018.’

That’s what happened. However, TMW has contacted me and told me that the firm term ends on September 30 of this year as per the offer letter.

SCROLL DOWN TO FIND OUT HOW TO ASK DAVID YOUR MORTGAGE QUESTION

I disputed this, but was adamant that the fixed term expires on September 30, thus giving me a 58-month fixed rate of 2.09 percent and not the promised 60 months.

Who’s right? I claim that the offer will expire on October 28, 2023 – that is, 60 months after it started.

Is there any legal precedent governing when an offer actually begins and ends? Via email.

David Hollingworth replies: The mortgage market is a jargon filled market and while much effort has been made to standardize the terminology to try and harmonize the wording, it is easy to see how confusion can arise.

When taking out a mortgage, it is quite common for the formal offer to be valid for a maximum of six months.

This allows borrowers to secure a rate well ahead of the point where they actually want to pay off the mortgage.

Some deals designed for new construction properties even give longer completion deadlines to account for the fact that the property will often not be completed when the application is submitted.

That validity period of the offer means that you can complete the specified mortgage agreement within that time frame.

The deal itself will also be clearly spelled out in the mortgage offer and that will break down the rate, type of deal and any charges that apply.

It is essentially the entire specification of the mortgage you are applying for.

That will therefore have determined the fixed interest rate and how long the mortgage was fixed.

Reference is often made to two- and five-year fixed-rate mortgages, which are among the most popular product types.

That is a general term for the product sectors and they are core areas where most lenders have a range of options available.

However, that should not be confused with the meaning that all deals are recorded for that specific time.

You ask when the term of the arrangement starts, but the question is when the deal actually ends.

Most flat rates are actually set up to a certain date, rather than for a certain number of years from completion.

That means the payout period of the deal can be shorter or longer than the two or five years, depending on when the mortgage is completed.

Lenders apply different end dates and will change those end dates periodically, to make sure they don’t start getting too close and don’t offer the payout period that borrowers would normally expect.

In the past, lenders occasionally offered a more competitive rate but used a slightly shorter payout period.

Something to watch out for when comparing deals.

It’s not clear if there was a delay in your completion, or if this was on purpose to tie in with the end of an existing deal, but unfortunately as those months passed, it meant that the remaining firm period diminished.

I would expect the details in your mortgage quote to state that the repairs took until the end of September, rather than five years from completion.

Many borrowers, both residential and owner-occupied, will have been more likely to look for a deal in recent months due to the fact that rates rose so quickly.

While that will help you get a better rate, this point around end dates is something to watch out for as it can affect the duration of the deal’s benefit.

If the offer is secured six months in advance, by the time the mortgage is completed the remaining fixation may have been eroded, especially on a shorter term deal.

Some lenders offer rates that are fixed for a full number of years from completion.

That includes Nationwide BS, First Direct and Mpowered mortgages in the owner-occupied market plus Buy-to-Let borrowers including Precise Mortgages and Paragon.

It still makes sense to shop around well in advance to secure a deal, but the end date is something to keep an eye on and to weigh against the potentially better rate that can be secured when rates rise.