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to think that ordinary people should not have to take a punt on their mortgage rate?

(341 Posts)
Mintyy Wed 08-May-13 18:39:22

Just had letter from our building society.

Our mortgage is going down from £800 and something a month to £379.75.

This is because we opted for a fixed rate 5 years ago when rates were 5.something % (sorry for vague details, but ykwim).

Now that "offer" has come to an end so we are going on to the standard variable rate which is currently 2.5%

I could RAGE, SCREAM AND WEEP at the amount we would have saved over the past 5 years if we had not opted for a fixed rate at the time.

Aibu to think that I didn't ask to take a punt on what mortgage rates would do, I am not a gambler and I am not interested in taking risks.

It really makes me absolutely hopping mad I tell you!!

iamsmokingafag Wed 08-May-13 18:40:57

We did the same ( kicks self)

BonaDea Wed 08-May-13 18:43:24

Yabu

Presumably you chose a fixed rate at the time for the certainty that provided in case interest rates went very high and your monthly rate with it.

I doubt anyone forced you to take a fixed vs variable rate at the time!

OldLadyKnowsNothing Wed 08-May-13 18:43:28

But think how overjoyed you'd have been all these years, had interest rates sat at 15%, as they did not so long ago?

Crikeyblimey Wed 08-May-13 18:45:15

We were in a similar position a few years ago and, thankfully, have been on the variable rate for a while now.

Galling as it is, fixed rates are just that - fixed. You benefit when rates go up during the term and lose out when they go down. Nobody can predict with any accuracy what will happen and we all just have to make the best choice based on information available.

Please don't be cross - you'd be laughing your socks off if rates had gone up dramatically during your five years.

YABU.

It could well have gone the other way and right now you'd be laughing.

Carry on paying the £800 and something if you can afford it, and watch the capital come right down.

Dawndonna Wed 08-May-13 18:48:04

Have you not ended up paying extra off your mortgage? (Not sure how it works).
And, if you managed that much albeit tight, would you be better off in the long term paying more than the SVR so that your mortgage is paid sooner?

pootlebug Wed 08-May-13 18:50:37

But that's what fixed rates are for - so that you don't have to take a punt, but know exactly what your payments will be. Or are you looking for the whole financial system to change?

Mintyy Wed 08-May-13 18:51:32

I do KNOW what a fixed rate mortgage is you know!

Its a very long time since interest rates were 15% btw (I did have a mortgage at the time).

AnyFucker Wed 08-May-13 18:51:33

Keep overpaying is my advice.

This happened to us some time after the massive interest rates just after 1990 (we were paying 13% at one time). We took a fixed rate of 6% and then watched while the rate went down month after month after month.

6% seemed great at the time. Don't regret, it is wasted energy.

I took a mortgage three years ago. As I only had 10% deposit only two providers would take us, both with specific mortgages for first time buyers both fixed at between 5.5 & 5.9%, so although rates were 1% at the time and we all KNEW that rates wouldn't go up in the three years forthcoming, it was that or nothing. That was unfair.
Yabu, you knew it was fixed. Even with variable it is, as you say, a punt, you gamble that rates will stay lower than the proposed fixed rate. You had a choice.

Mintyy Wed 08-May-13 18:53:01

Pootlebug - yes, am looking for the whole financial system to change. What benefit is it to the ordinary homeowner with no knowledge of the financial markets to take a punt on their mortgage? Which is all that these deals represent.

Squitten Wed 08-May-13 18:53:06

YABU

A fixed rate provides protection for you in case the interest rates went the other way, which they could have. Either way, you are taking a risk.

Mintyy Wed 08-May-13 18:54:10

I know its wasted energy AnyFucker, but why is it like this? Why does the system do this to people?

AnyFucker Wed 08-May-13 18:56:14

I dunno, Mintyy. If I had the answer to that, I would be a very rich woman.

Why do bankers still get massive bonuses even though they contributed massively to fucking up our country ?

Another one of life's rather massive mysteries.

minouminou Wed 08-May-13 18:56:53

Yup! Overpay and make the most of the low interest period.
There's an overpayment calculator that shows you how much you'll knock off your mortgage term if you pay off a certain amount every month.
Just an extra tenner a month can take off three months or more.

Saski Wed 08-May-13 18:58:19

There's no one there to protect borrowers from interest rates going up if they can't fix rates. I can appreciate your frustration, but it's no more useful than railing on about your homeowner's insurance that you pay for and never use. Best not to think about what could have been.

Mintyy Wed 08-May-13 18:59:13

Thanks minou but we are already overpaying the maximum each month as it is.

DolomitesDonkey Wed 08-May-13 19:01:00

Yabu.

In your own words you're not a gambler so you took a fixed rate. There's your answer.

Mintyy Wed 08-May-13 19:01:12

Well, I don't exactly agree Saski. I know why I am paying my insurance.

I don't really know why I have to make a choice between fixed or variable rate? It is an invitation to take a punt!

As I said, most home owners probably do not want to take a gamble on their mortgage payments.

AnyFucker Wed 08-May-13 19:02:08

Are you a Conspiracy Theorist, Mintyy ? smile

Mintyy Wed 08-May-13 19:02:17

Are you saying that anyone who chooses a svr is a gambler then Dolomites? And what advice do they get before taking that bet?

MrsHiddleston Wed 08-May-13 19:03:52

I'm guessing you'd have felt differently if interest rates were currently 15%?!

That's what fixed rate is, you do have choice! I recommend you keep paying the £800 if you can and pay off your mortgage quickly.

Bearbehind Wed 08-May-13 19:05:17

What do you mean when you say you want 'the whole financial system to change'?

No one forced you to fix for 5 years. At the time you obviously thought there was a risk of interest rates going up- they didn't so you lost out but them's the breaks.

You can chose from a fixed or a tracker mortgage over whatever term you want- what more can the financial system possibly offer?

No one can predict what will happen to interest rates or the economy so you have to make a choice and live with the consequences.

Presumably you were aware that mortgage rates have been coming down over the past couple of years. It is possible to get out of these deals, often with a penalty to pay but if you'd be saving loads of money it could possibly have been worth it. I know this doesn't help you now but might help others.

I work with mortgages and am certain that part of the sales process is to ascertain what your attitude to risk is (ie can you afford for rates to go up or do you want the security of fixed payments) and what your view of how rates might behave in the future and how to protect yourself in that instance. You couldn't possibly have been pressured one way or the other and your paperwork will say this.

You may have viewed choosing a variable rate as a 'punt' at the time, perhaps that's why you chose quite a long term fixed rate.

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