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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

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

340 replies

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!!

OP posts:
Kewcumber · 09/05/2013 17:01

She didn't take a punt - she agreed a loan at a fixed rate. People have been taking fixed rate loans for years - I had my first car on a car loan with a fixed interest rate. When the loan finished I didn't recalculate how much I would have paid if I'd done it via an overdraft instead Confused

Going with a variable rate is a punt not a fixed rate. I suspect the truth is that OP is quite happy with a fixed rate, she just wanted one that was cheaper. But there presumably wasn't one that was cheaper around at the time.

Some people are not natural gamblers - they are the people who should be on fixed rates.

She wants to say "I like that dress - I'd like to buy it now at the price you will reduce it to in the sale"
"Sorry madam we don't know what price it will be in the sale - it depends how popular it is and how much stock we have left"
You either take the risk or you don;t - if you don't take the risk then you fix the price in advance - what the final price turns out to be for those who took the risk isn't relevant to you - you want the certainty and you pay for that.

Kewcumber · 09/05/2013 17:04

Fixing if not a gamble Shock

Fixing is the opposite of gamble. Gamble means not knowing what you will get/pay in the end.

You put your money on a horse and have no idea what if anything you will get back - that's a gamble. Giving someone money and agreeing a payment schedule that cannot move, not one penny during the term of the loan isn't a gamble. You know what you borrowed you know what you pay back. No gamble involved.

I could get into economic risk/reward theories but perhaps not...

slhilly · 09/05/2013 17:06

I think this statement of Mintyy's really gets to the heart of the problem: "I am saying that it is wrong to ask everyday (even reasonably well educated people like me and dh) to take a punt on what interest rates are going to do when they take out a mortgage."

That sounds distinctly like she believes that this is Someone's Fault. That someone ought to Make Things Better. She seems to just completely ignore the obvious reality that no-one can make changing interest rates go away - for her, for any of us, for financial institutions, for the governments.

It rather reminds me of this fairly brutal quote: "A religion is sometime a source of happiness, and I would not deprive anyone of happiness. But it is a comfort appropriate for the weak, not for the strong. The great trouble with religion - any religion - is that a religionist, having accepted certain propositions by faith, cannot thereafter judge those propositions by evidence. One may bask at the warm fire of faith or choose to live in the bleak certainty of reason- but one cannot have both." [Robert A. Heinlein, from "Friday"]

Mintyy seems to have a pretty strong faith that it is possible to structure a 25 year loan in a way that shields her from interest rate fluctuations. Now the "bleak certainty" of the real world is intervening, saying that to make her dreams come true, we would have to eliminate interest rate variations in the first place, which is impossible.... and she doesn't like this, at all.

Ilikethebreeze · 09/05/2013 17:16

Maybe we are disagreeing on words.
When you have to make a choice, any choice, or also no choice at all on something, I would call that a gamble. Perhaps many people would not.

Ilikethebreeze · 09/05/2013 17:18

I will rephrase that.
When you have to choose option A, option B or to stay with option C, I would say that they are all gambles.

curryeater · 09/05/2013 17:20

Of course - I get that - the gamble with fixed rate is not "what will I have to pay in this case" but "what will turn out over time to have been the better deal"?

Mintyy is imo not objecting to the fact that interest rates change, but to the fact that our cultural orthodoxy is that one must buy a house to have any stability and so having a home makes you a de facto player of the market.

EverybodysStressyEyed · 09/05/2013 17:26

So does having a pension or isa's or a savings account

Or buying petrol or food or anything else

Kewcumber · 09/05/2013 17:34

But buying a house on a fixed rate mortgage is not any different substantially to renting Confused, unless you are going to pitch a tent on common land you have to pay something for your housing whether you own it or not.

If you are going to take the work gamble to mean choice then you can turn the myriad of decision you make through the day as "gambling".

Most people equate gambling with risk/reward - am I prepared to take more risk for the chanc of a bigger reward. On the whole the more risk you are prepared to take the bigger your potential reward. Mintyy didn't take any risk at all so has no "reward".

EglantinePrice · 09/05/2013 17:35

Well you're right, no one has to take 'a punt' on their mortgage...

Ilikethebreeze · 09/05/2013 17:43

If you look up definitions of the word gambling, it can mean different things.
So I suppose we could all debate this till the end of time Smile

BoundandRebound · 09/05/2013 17:58

You chose fixed so the extra payment is your insurance premium that you will pay the same amount each month. Admittedly an expensive premium but a premium nevertheless.

I too think you are being rather entitled and whiny

But I fell off fixed rate 3 months after rates started to tumble and have been on tracker ever since which is pegged above base rate so in the game of mortgages it seems I won. If I lost I'd take it with good grace that I am an adult and made that decision

Original poster
Mintyy · 09/05/2013 18:47

Thanks everyone for continuing to want to contribute this thread. I thought I politely said goodnight last night. Whilst I am equally grateful to all for their comments, I would just like to say that tortoiseontheeggshell at 4 in the morning (you are in Aus aren't you torty?) and Ilikethebreeze this afternoon have grasped my point so its nice to know that someone out there gets what I mean.

And, really mumsnetters, even if you disagree with me very strongly, is there any need for some of the vitriol?

I have been accused of being entitled, whiney, impolite, vvvvvvvu, stupid, greedy, toddlerish, uneducated, and actually I am none of those things. But hey thanks all, I will read everything through again later tonight when I have more time.

OP posts:
everlong · 09/05/2013 18:52

This reply has been deleted

Message withdrawn at poster's request.

Bearbehind · 09/05/2013 18:55

ilikethebreeze not sure what you can debate until the end of time unless you are referring to the word 'gamble'.

There is no debate to be had over the OP's point as there is no alternative- everyone has to make a choice of some kind with regard to their choice of renting or having a mortgage.

Not doing so is not an option unless you want to live in prison i suppose!

I really don't know what people who say they can see where the OP is coming from mean. Yes it's shit that you might win or you might lose but that's life. There are no guarantees. We'd all like the best possible outcome in every situation but it ain't going to happen.

What some people don't seem to get is the OP got what she wanted 5 years ago- a fixed rate for a fixed term based on the information available at that time.

The fact that interest rates went down 12 months later is just tough shit. She might have taken a 30 year fix if she'd been able to and she'd be worse off for the forseeable future.

Ilikethebreeze · 09/05/2013 19:00

That is the joy of AIBU.
They may have been kinder on Chat.

scampadoodle · 09/05/2013 19:43

YABU

In 1990 I bought my first flat for 56k. I spent a few years in negative equity but by the time I'd met my future DH & we decided to buy a house together the value of my flat had risen to about 87k so I sold it. Made a nice little profit, was very happy. Had I held onto it and rented it out I would now be sitting on an asset worth at least 250k. God, how I regret selling when I did! But I don't rail against the nasty property market for being so bloody unfair, no, I grit my teeth & think, Well I still made a profit and I didn't have the hassle of being a landlady plus I'd have been liable for Capital Gains Tax had I sold. In short I took a gamble without knowing what the future would hope. 'Tis life.

scampadoodle · 09/05/2013 19:44

hold not hope!

MummytoKatie · 09/05/2013 20:13

Mintyy - the two people who agree with you have not "grasped your point" - like you they have unfortunately missed the point.

The other 280 odd posts have all explained to you in different ways (some of them are really rather impressive) how you did not have to take a punt, how - in fact - you didn't take a punt, how you got exactly what you wanted when you described your perfect solution and what you need to think about in the future.

You seem to have ignored all these posts and then wonder why people are getting a teensy bit frustrated with you.

Talkinpeace · 09/05/2013 20:15

Mintyy
I'd believe you genuinely wanted advice if you had messaged me.
You have not so clearly do not.
Thread hidden.

MummytoKatie · 09/05/2013 20:30

ilikethebreeze - there is more than one definition of the word gamble but a fixed payment, paid at fixed times, for a fixed term is never going to be one of them.

There are different definitions of the word "cat" but it doesn't matter how much you point at my dog and shout "cat" - he is never going to be able to do a convincing "miaow".

Original poster
Mintyy · 09/05/2013 20:36

MummytoKatie
The "gamble" is whether to go for the fixed rate or the svr. That is the gamble.

OP posts:
MummytoKatie · 09/05/2013 20:38

That isn't a gamble. That is a choice. The choice as to whether to gamble (get the SVR) or not to gamble (get the fixed).

Original poster
Mintyy · 09/05/2013 20:47

It is a gamble. You gamble on paying more or less than the fixed rate.

OP posts:
Bearbehind · 09/05/2013 20:52

mintyy you said your DH agreed with you and thought you might as well have just spent the money a casino- do you really not understand that if you had done that you'd either have been loaded or had fuck all?

The whole point of fixing rates is it's not a gamble, it has a 100% guaranteed outcome which may or may not turn out to be the best option with the benefit of hindsight.

If I were you I'd be much more concerned at being 50, with 2 dependent children who will want to go to university and a £180k interest only mortgage, than worrying about things that have been and gone and which you can do fuck all about.

MummytoKatie · 09/05/2013 20:52

So do you also think walking past the bookies and not betting on a horse is a gamble?