AIBU?
to think that ordinary people should not have to take a punt on their mortgage rate?
Mintyy · 08/05/2013 18:39
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!!
Crikeyblimey · 08/05/2013 18:45
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.
AnyFucker · 08/05/2013 18:51
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.
pregnantpause · 08/05/2013 18:52
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.
minouminou · 08/05/2013 18:56
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 · 08/05/2013 18:58
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 · 08/05/2013 19:01
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.
Bearbehind · 08/05/2013 19:05
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.
nomoreminibreaks · 08/05/2013 19:08
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.
Doyouthinktheysaurus · 08/05/2013 19:09
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.
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