New mortgage query

[Humpy D]

Just coming to the end of my current fixed deal which is on a rate of 1.79% which costs £205.83 a month.

Gone online to switch to another mortgage with the same lender and the best they can offer is a 2 year fixed also at 1.79% but this costs £207.62 a month!

I know it's less than £2 a month but I can't understand why it's not the same as it's the same % rate.

Am I missing something?

[IrateNinja]

Probably a fee they're adding to the loan amount.

[bmwmike]

A lot of variables at play I guess... outstanding term of mortgage (presumably shorter than when you started the prior fixed rate) and outstanding balance - again presumably lower than when you started the prior two year mortgage.

Tbh I'm curious what others think as I'd have thought it should be lower but I've never done a 2yr fix only 5yr and those have always been lower. Perhaps 2yr is just not enough time.

[Humpy D]

The reason is that when they show the quotes they don't take into account any payments made between now and the switch date. When you go through the actual process you select a start date which then recalculates the monthly cost (assuming the don't default). When I did this the new monthly payment was the same as the old one.

[splodge s4]

Only thing that makes up the monthly repayment is the interest rate, amount borrowed & term. One of those three is out, not by much but something isn't exactly like for like, simple as that mate.