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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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 21:07

I'm out - forehead hurts from banging it on the keyboard.

everlong · 09/05/2013 21:13

This reply has been deleted

Message withdrawn at poster's request.

EverybodysStressyEyed · 09/05/2013 21:17

you are correct

the fixed rate gives you certainty so you can budget etc etc

the gamble is taking the variable rate and hoping that rates will go down but facing the risk that they may go up

in this case by taking the fixed you didn't gamble.

BIWI · 09/05/2013 21:20

Both are a gamble.

If you take out a fixed rate, you are buying certainty. You will know each month exactly how much you are going to pay. That certainty, for many of us, is worth paying for. The longer you fix the term for, the more risk there is in your gamble.

But the gamble is that over the course of the lifetime of your mortgage, the rates won't go below (or too far below) the rate that you are paying. And, of course, you are protected from rate rises. You mustn't forget this

If you take out a variable rate, you are gambling that the rate won't go up too much, but that it could also go down.

Thing is, when you took out your mortgage, your fixed rate, by historical standards, was actually quite low. Nobody knew/could predict that interest rates would end up as low as they are now, or that they would remain that low for such a long period of time. In other words, you were actually quite wise at the time. You made a good decision, based on what you knew.

However, you also chose to fix your mortgage rate for 5 years, which is more of a gamble, as no-one can predict rates that far ahead. But again, you were buying certainty and that delivers security.

You have been unlucky in that rates have dropped significantly below what you are paying. But you have still bought your certainty. And don't forget that the rates didn't go up! You were protected from that.

We have been lucky (sorry) in that whenever we have taken out a fixed rate, the rate has always been low and the prevailing interest rate has rarely gone too much lower than that.

I really understand where you are coming from, and it sucks to know that you didn't need to have spent so much money - but it could also have gone the other way so easily - remember the time in the 80s when rates went up to 15%? Well, you have been protected from the risk of that happening.

I think YABU Mintyy - sorry - it doesn't matter if you are ordinary or the chosen one. You have borrowed money, and you have made a considered choice to borrow in a certain way. I actually think that you and your DH were very wise to make the decision that you did - you were just unlucky in the market circumstances. But be positive about the fact that if you take out a fixed rate now, at the current low rates, you could end up paying an awful lot less than the variable rate - the rate is bound to rise at some point in the future. So if you can fix a really low rate now, for the next 5 years, then you should benefit from that.

Mintyy · 09/05/2013 21:35

Yes, both are a gamble.

OP posts:
MummytoKatie · 09/05/2013 21:42

No. The fixed is the certainty. Everything else is a gamble in comparison to the certainty. But, by definition, a certainty cannot be a gamble.

Mintyy · 09/05/2013 21:56

But choosing between a certainty and a gamble is a gamble.

OP posts:
Ilikethebreeze · 09/05/2013 21:57

Quite.

Ilikethebreeze · 09/05/2013 21:59

The gamble bit is the bit before you choose, not after you have chosen.

Mintyy · 09/05/2013 22:01

Got there in the end.

Saying farewell to this thread now.

Thanks for everyone for all thoughts. If anyone has genuinely been banging their head on the keyboard over it Kewcumber then I am truly sorry for that!

OP posts:
Saddayinspring2 · 09/05/2013 22:06

It's annoying to have paid more money than you had to but you made the choice which was a reasonable one at the time... Except I hate fixed rate mortgages and I think Banks used to be on a mission to sell them which I took out once and swore never again. Repayment variable rate and flexible every time.

Bearbehind · 09/05/2013 22:13

My last attempt at trying to explain this to mintyy and ilikethebreeze

If you want to drive to a nearby city and there are several roads which lead to that city, you have to choose one of them if you want to reach your destination.

You can check the internet for reported road closures or accidents but you can't legislate for what might happen once you've set off.

If it turns out the route you chose is closed because a lorry has jack-knifed and you get to the city 3 hours later than if you'd gone a different way you wouldn't say 'I took a gamble and it didn't pay off' you'd say 'bugger, I made the wrong decision'

The fixed rate versus variable rate decision is exactly the same, you have to go in one direction and it might not turn out to be the best choice.

Alternatively you can decide that you need someone to wipe your arse forever more.............

Kewcumber · 09/05/2013 22:19

Don't worry Mintyy - it occasionally does me good to grasp that I have clients that look at the world a wrong different way to me. It makes me a better person. Though my keyboard is bloodied

Bearbehind · 09/05/2013 22:21

PMSL at 'got there in the end'- one other person is on the same planet as you and you think you've proved your point- I'm off to bang my head against a brick wall now.

Kewcumber · 09/05/2013 22:22

try a keyboard bear - comfier.

MummytoKatie · 09/05/2013 22:23

Debates giving bookies analogy again but I've given it twice and I just can't face it!

Ilikethebreeze · 09/05/2013 22:24

Actually, I would say the first one, not the second.

Ilikethebreeze · 09/05/2013 22:25

Never mind. I agree to differ with virtually everybody.
I dont really care. It is really just a debate about words.

TheDoctrineOfSnatch · 09/05/2013 22:30

Next up: why vacation cottages cost more in the school holidays.

Ilikethebreeze · 09/05/2013 22:32

I prefer "what do we think will happen to interest rates in the next five years". Much more topical!

Bearbehind · 09/05/2013 22:35

ilikethebreeze have you been sniffing paint or something? You are making no sense at all and, as just about the only person who agrees with mintyy, you are not doing her any favours Wink

MummytoKatie · 09/05/2013 22:35

Because the cottage owners are big meanies and have stinky bottoms and it's just sooooo unfair

(I'm 37 weeks pregnant. I'm supposed to be watching my blood pressure. If I stay on the side of sanity and logic it is so not going to happen!)

Crikeyblimey · 09/05/2013 22:36

Ha ha ha! Is this REALLY still going on?

Now can someone tell me why red roses are more expensive on 13th and 14th Feb than they are on 15th?

Bearbehind · 09/05/2013 22:38

I don't know crikey but it really pisses me off that fireworks are so much more expensive on 4th November than the 6th!

Ilikethebreeze · 09/05/2013 22:45

Bear. Why am I not doing her any favours? I think she or someone said she had another thread. Am I upsetting her financial arrangements in some way?