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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!!

Mintyy Wed 08-May-13 19:40:16

"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."

I'm guessing at what you mean by your second sentence.

Well, no, I don't think I would have been smug as I am really not by nature a smug person, if you can imagine such a thing MTS?

I didn't think the rate was going to go up! I didn't know! Who knows? Even the experts don't know.

I didn't think the rate was going to go down either. How the fuck would I know?

So I did what I thought was the average sensible fence-sitting thing.

And spent as much as £400 x 12 x 5 more than I needed to on housing my family.

WhereYouLeftIt Wed 08-May-13 19:40:23

AIBU "to think that ordinary people should not have to take a punt on their mortgage rate?"
Well, nobody (oerdinary or not) has to 'take a punt'. It's a choice. You made that choice to have certainty. The cost of that certainty was higher than you had thought it would be.

Would you rail as much if the end of your fixed-rate had meant your monthly payments had risen to £1200?

Ilikethebreeze Wed 08-May-13 19:41:55

I think the problem is Mintyy, that the price of everything can go up or down over time,including borrowing money.There is a demand and supply situation going on for money, as well as everything else. Think oil, electricity, cars etc.
Buuuut, thinking about it, I suppose the situation used to be , mortage rate is 5% for example, take it or leave it?

MrsHiddleston Wed 08-May-13 19:42:14

You don't want choice?! Seriously?!

Why would you not want choice? I'm baffled! In what others areas if your life do you not want choice.

Do you choose which supermarket you shop in based on price and convenience? Do you choose which school to send your child too based on reputation and convenience? Do you choose which hospital you want to be treated at based on reputation and convenience? Do you choose who to bank with based on interest rates for your savings and the golden hello offers?!

Seriously?! You'd rather have no choice?

Mintyy Wed 08-May-13 19:43:24

Mrs Hiddleston! You seem to be a bit hysterical!

Crikeyblimey Wed 08-May-13 19:44:34

I thought you said you'd been overpaying?? Did you mean you'd been paying more than the minimum payments? If so, you haven't paid all that much "too" much.

Also - you must have noticed the bank rate has been very low these last few years. I guess I'd be kicking myself too for not switching sooner but to blame someone else for this decision is frankly bonkers.

Talkinpeace Wed 08-May-13 19:45:02

Only the British mortgage market is this dysfunctional.
In places like the US, long term fixed rates (over 10 years) are the norm - so banks have less incentive to bugger about with rates.

andubelievedthat Wed 08-May-13 19:45:50

If you do not chose your repayment way ,who would you like to? and if someone else did,would you complain if the same circumstances occurred that it was their fault you seemingly lost out on saving oodles of cash? you seemingly want no responsibility for your financial affairs so, you feel you are smart enough to have a mortgage? sour grapes really ,correct?

Mintyy Wed 08-May-13 19:46:20

"Would you rail as much if the end of your fixed-rate had meant your monthly payments had risen to £1200?"

Erm ... yes? of course I would. That would be awful.

Madamecastafiore Wed 08-May-13 19:46:53

They shouldn't have even given you a mortgage if you didn't understand the implications of what you were signing and if you didn't u see stand you shouldn't have signed or at least have educated yourself before signing what is essentially the biggest loan agreement of your life.

FFS you made the choice!

Bowlersarm Wed 08-May-13 19:46:58

That is the nature of having a mortgage, unfortunately. You will always have this problem as long as you have one. No one can predict when base rate will go up/down, although everyone tries to be an expert.

Overpay OP, get rid of it as soon as you can, then you don't have to deal with it anymore.

Mintyy Wed 08-May-13 19:48:24


Bobyan Wed 08-May-13 19:48:46

Op: am I being unreasonable?
Nearly everyone: yes
Op: no I'm not

Why bother asking?

Anyway if the difference between the fixed rate and the variable rate is so much, why not just pay the penalty and repay the fixed rate early and move mortgage?

Mintyy Wed 08-May-13 19:49:33

grin was for the wonderfully articulate madamecastafiore.

TheDoctrineOfSnatch Wed 08-May-13 19:51:23

Mintyy, broadly speaking, at the time you were offered a five year fixed rate, the bank would have borrowed the money in the money markets on a five year term.

The interest rate at which it borrowed money would have been different to the one year rate, the two year rate etc.

Five years ago, money market rates for five year loans were probably higher than they are now because markets also expected interest rates to rise within the period. So your bank would have made a profit on your mortgage, as it must on all mortgages, but the profit would have been the margin on its five year rate, not on the sum of, say, five lots of one year rates.

Mintyy Wed 08-May-13 19:51:37

Bobyan - I think the penalty in our case was £2000 so I had to be pretty sure rates would remain very low. Once again - htf would I know that??

WhereYouLeftIt Wed 08-May-13 19:52:04

So, you're complaining that your repayments went down. You would have complained had your payment gone up. And you're complaining that you chose to keep it the same for the past five years. Hmm. Have you considered renting instead, Mintyy? You don't seem too happy with the whole borrowing thing.

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

SmellsLikeWeenSpirits Wed 08-May-13 19:52:30

I know what you're saying. Mortgages are massive amounts of money and hugely complex and spread over a bloody lifetime. I don't feel qualified to make a decision about them. There's no other area in my life, so onerous, so huge and scary that I have to make choices about based in what little info I can glean from slimy salesmen with a vested interest

TheDoctrineOfSnatch Wed 08-May-13 19:52:32

Ie its cost of financing you for five years is more than if you had taken out five one year fixes.

Mintyy Wed 08-May-13 19:54:00

Thank you smellslikeweenspirits thanks for getting the gist.

PosyNarker Wed 08-May-13 19:59:52

YANBU to be pissed off, but...them's the breaks.

I don't expect lenders to get much sympathy but they also 'take a punt' on fixed rates. That's why the rate is generally a little higher than the variable rate and the longer term deals are never as good unless you think rates are going to go through the roof.

I do think more people should consult an IFA tbh about the right deal for their circumstances.

Surely unless you have pots of cash to burn, buying property always contains an element of risk? confused

Bobyan Wed 08-May-13 20:00:45

You could have either taken another lower rate fixed rate or gone to a capped tracker.

You pay your money, you make your choice.

You could always rent if the idea of taking responsibility for your investment in property offends you that much.

MrsHiddleston Wed 08-May-13 20:05:08

'hysterical' errrmm no...
'baffled' yes completely and utterly...

Perhaps if you don't understand mortgages you should try doing a bit of reading before you apply for another one.

MTSCostcoChickenFan Wed 08-May-13 20:05:21

Mintyy - the "sensible fence sitting" solution was to do nothing and stay variable.

Some experts thought that rates would go up. Some experts thought that rates would go down. So it wasn't as if everyone in the know stayed variable and conned the financially naive to take up a fixed rate.

A lot of financially savvy people made the wrong call as well so stop whining about poor naive little old you got sucker punched by the system.

mumblecrumble Wed 08-May-13 20:07:24

We decided that the risk of not knowing where on earth the rates would go... out weighed the risk of it being higher if rates fell.

Try to enjoy the extra money and not dwell..... easier said than done but you know what I mean

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