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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!!

Doyouthinktheysaurus Wed 08-May-13 19:09:22

You have a choice though, you didn't have to take a fixed rate!

It's gutting when interest rates go down and you don't feel the benefit, I know, we've been there but that's the risk we took when we took out a fixed rate mortgage and we were well aware of it.

We've also had the benefit with our first deal of fixing and interest rates rising so it does work both ways.

For us, when we first bought and money was tighter, fixed payments each moth was a godsend and we were able to budget accordingly. That is the benefit for lots of people.

orangepudding Wed 08-May-13 19:09:52

Now you are not on a fixed rate you can probably over pay more without being charged.

We also fixed before the rates dropped, we wanted managable payments. It was a gamble that didn't pay off but gave us peace of mind when we fixed it.

AnyFucker Germany Wed 08-May-13 19:10:58

I would be interested to know the percentage overall of people who did/did not benefit from fixed interest rates

I think I know the answer though....

derektheladyhamster Wed 08-May-13 19:11:37

We were in a similar situation when in the summer of 2007 we took a fixed rate mortgage angry . 2 years later we changed (and paid an early redemption fee) to move to a variable rate. You could have changed it, although there would have been financial penalties. We had a variable rate in 1997 and it crept up and up. swings and roundabouts.

Saddayinspring2 Wed 08-May-13 19:11:56

I do sympathise as Banks do screw us over while pretending not to..... However, interest rates have been very low for a long time... And were generally expected to stay low in line with the rest of Europe ..

So yabu <ducks>

<grin>

Mintyy Wed 08-May-13 19:13:27

"You have a choice though, you didn't have to take a fixed rate!"

I am not sure how many more ways I can put this:

The WHOLE point of this thread is that I did not ask for a choice, I did not want a choice, I think it is wrong to make people make a choice.

Bearbehind Wed 08-May-13 19:17:29

So what do you propose, everyone goes on a tracker today when interest rates are 0.5% then in 10 years when interest rates might be 10%, no one can meet their mortgage repayments - genius idea that one!

The choice is given so you can try and plan your future repayments, you might get it right or you might get it wrong but that's life.

Crikeyblimey Wed 08-May-13 19:17:56

Sorry - but do you buy anything else without a choice?? That is just a bonkers response.

Also - if the rates have reduced so much whilst you e been fixed rate, why didn't you investigate switching to a variable rate, taking the early repayment hit. If you'd have done the sums it could have been worth it.

This is the biggest financial commitment most people ever make. It makes me very cross when people don't take charge and feel things have been "done to them".

I know you're cross but get a grip and pay more attention nex time.

AnyFucker Germany Wed 08-May-13 19:20:07

Mintyy, that is a bonkers idea !

It's called a free market. Where the fuck would be without it ? Stalinist Russia ?

AnyFucker Germany Wed 08-May-13 19:20:20

would we be

Ilikethebreeze Wed 08-May-13 19:23:01

I understand what you are saying Mintyy.

And , if I understand it all correctly myself,even being on variable is a potentially riske choice too?

Also, and perhaps you understand this all better than me, you havent overpaid your mortgage, just paid more for it? Or have I got that point wrong?

tbh, I am not sure why there is such a huge difference in your figures.

Saddayinspring2 Wed 08-May-13 19:23:06

What minty means is she should have been properly advised to take the best mortgage in the current climate

Saddayinspring2 Wed 08-May-13 19:23:54

And most people knew that rates were very low

SJisontheway Wed 08-May-13 19:24:51

The insurance analogy was a good one. You were paying a premium, but had peace of mind that you could afford your repayments for the fixed term. You were insured against interest rate rises. It wasn't gambling at all. It was the opposite of gambling. You knew exactly where you stood and what your repayments would be. Variable would have been more of a gamble - one that would have paid off in this instance, but that's hindsight.

Mintyy Wed 08-May-13 19:26:33

Crikeyblimey - anything else I buy with a choice has a fixed price. I know its either going to cost me a or b.

Or am I missing something?

Bearbehind Wed 08-May-13 19:26:42

But the whole point sadday is that the 'current climate' is not what it was 5 years ago.

mintyy was probably made well aware of the alternatives in 2008 but no one then would have predicted interest rates going so low for so long.

Opting for a 5 year term, unless interest rates are rock bottom as they are now, was always a gamble.

Bearbehind Wed 08-May-13 19:29:27

minty you really are missing the point- you might chose to buy anything today at one price, but tomorrow the price might shoot up or down- you take the risk to buy it today at the price offered today but it may turn out to be a bad or good decision in hindsight.

Crikeyblimey Wed 08-May-13 19:31:13

What Bear said.

MTSCostcoChickenFan Wed 08-May-13 19:32:07

When people talk about the blame culture I think that this is what they mean grin

You could have done nothing ie let your rate remain variable but you thought that the rate was going to go up so you elected to fix it. If the rates have gone up you be so smug with all your financially simple friends.

The whole thing isn't exactly rocket science yet you seen to think that you got duped into it.

 

NatashaBee Wed 08-May-13 19:32:28

In the US where I live, rates can be fixed for the life of your mortgage. We are at 5%, which is perfectly bearable although rates are now dropping to the point that we could save ourselves a few hundred dollars a month by refinancing. I don't see why it's not possible to allow a 20/30 year fixed rate in the UK as they do here. You might lose out due to interest rate fluctuations at times, but at least you have some security in knowing what your loan rate will be for the life of the loan.

Crikeyblimey Wed 08-May-13 19:32:45

The new mortgage you've been offered is a different product. Ok, it is doing the same job but it is different and wasn't available 5 years ago at this price.

Glittertwins Wed 08-May-13 19:33:20

Having been bitten by rates going up on a capped mortgage, since the cap was too high, we have had fixed. Sometimes we have won but as rates fell, I suppose we lost if you look at it that way. I prefer to know exactly what the monthly payments are each month. It was our decision and that's exactly what this about. Maybe you should have looked at offset or tracker rates instead but if you want the best deal, it won't necessarily be handed to you. Financial institutions are in business to make money. It's up to us to get the best deal out of them.

Mintyy Wed 08-May-13 19:34:40

SJisontheway - the insurance analogy isn't a good one. Insurance is a product for a fixed price which might change if I make a claim.For insurance I am quoted a price and can shop around.

For my mortgage I can shop around but I am quoted 3 prices, 2 of which might change at any time, and I have no idea how to predict that.

A better analogy would be to compare it to going to Sainsburys for your weekly shop. Fill your trolley and take it to the check out. One checkout says the price is £100 and it will be £100 tomorrow. Another checkout says the price is £100 but it might be £50 tomorrow or it might be £150 tomorrow, fancy your chances?

Bowlersarm Wed 08-May-13 19:36:27

I don't understand why you think people shouldn't chose their mortgage?

I'm sure you're pretty much on your own to think that people shouldn't have or want a choice.

Doyouthinktheysaurus Wed 08-May-13 19:38:09

Choice is a positive, not a negative thingconfused

Once upon a time all you had we're the standard variable rates, the introduction of fixed rate and trackers gave people more options, reflective of their ability to absorb changes in rates and the level of risk they are prepared to take.

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