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

[Mintyy]

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!!

[Bearbehind]

Imagine if interest rates had gone up and your letter from the bank said your payments were going up to £1,200 per month- would you be moaning about your ability to chose then? Would you have posted saying I am pissed off that I have saved £400 x 12 x 5? I doubt it.

Get over it.

Life is full of decisions- some will turn out for the good, others less so. Would you really prefer to live in an institutionalised society which made all your decisions for you?

Your Sainsburys analogy is perfect which is why I don't understand your arguement- your shopping might cost £100 today and tomorrow it might cost £150 orit might be £50- you do have to make a choice.

The alternative might be that it costs £150 everyday from there on and I bet you'd moan about that!

[FiveColourFISH]

OP, I'm amazed at the criticism you are getting here!

I 100% agree with you. It was the fear of being at the mercy of horrendous interest rates and having to somehow pull out a crystal ball and predict what payments could end up being that put me off getting a mortgage for years. Memories of the early 1990s etc.

It's crazy to me that chance, luck and factors completely out of ones control can end up determining a major expense like housing.

[Bobyan]

Buying a property isn't compulsory.

[BrianButterfield]

If, like most people, you aren't a financial expert, you're not forced to go it alone - there are lots of independent financial advisors out there whose job is to help people make these decisions. If you choose not to use them that's your lookout but you don't have to do all the research yourself.

[FiveColourFISH]

But can't we have a discussion about alternatives to the current situation, at least? Even if the general consensous believes that the current system works? I think that's what the OP was saying.

[FiveColourFISH]

Sorry, that post didn't make sense. I'm watching Friends and MNetting at the same time.

[Bearbehind]

five I'm dying to hear the alternatives to the current situation- please tell me what they are?

We live in a free market, with readily available independant financial advice and a massive choice of mortgage products or the option to rent if you don't fancy any if the alternatives- please tell me how the situation can be improved?

[MTSCostcoChickenFan]

During the New Year sales I overheard a shopper complain to sales assistant that she had paid full price for something before Christmas and now it was 30% off. She wanted the store to reimburse her the 30%. Some people eh?

[Crikeyblimey]

But she asked if she was being unreasonable to think that "ordinary" people shouldn't have to take a punt on their mortgages.

She was told she was being unreasonable.

The system might not be perfect but there is a free market out there with lots of choice and alternative options such as not getting a mortgage at all.

[FiveColourFISH]

Goodness knows - I thought perhaps a discussion might educate me?

Is it possible to have a 25 yr fixed rate, for example? At an average rate eg 3 or 4%. After seeing how much interest the bank is going to make off my repayments at that amount, surely that would be enough profit for them? And then I would know my housing costs forever.

Look, I realise that there is no perfect answer. I just saw the OPs post, I'm interested in financial stuff and thought I'd take a peek.

[PosyNarker]

What is the alternative? No rate and a fixed 'fee' for borrowing (I believe there are some Islamic products like this). Not sure this is better for either consumer or bank.

I quite like offset products, but they are going out of fashion because of the low interest rates. They're good if you have cash but might need to access it, which is our circumstances,

Most banks don't have massive margins on their mortgages unless you are a high risk. Retail banking in the UK is a volume business. Of course some banks have lower costs and can pass that on and all will view your personal and property risk factors slightly differently.

[Crikeyblimey]

Blimey - Bear. Are you me??? I didn't see your post till after I'd posted mine.

[Mintyy]

Thank you very much Five for being able to understand what I am saying.

I am old (50) and have had a mortgage for many years. I will refrain from responding to the people on this thread who propose that I shouldn't have a mortgage "if I don't understand what I am signing up to".

Dh has just got home from work and we are discussing the letter. He said "we might just as well have taken the money to a casino". So he gets it .

[Crikeyblimey]

The money the banks are lending us for our mortgages is essentially the money savers are putting into savings accounts (very very simply put). Therefore, if one bank offers a 25 year fixed arbitrarily plucked from the air rate - they would also fix their savings rates. Customers would soon move their savings to a more favourable rate paying bank and hey presto - bust bank.

Also - if the US model is so fantastic how come the arse fell out of their sub-prime market and helped us all towards rack and ruin faster than would have happened otherwise?

[AnyFucker]

Mintyy, how many more years do you have on your mortgage ?

[Bowlersarm]

Five but that it the very thing that the OP is complaining about.

You are saying you wouldn't mind the idea of fixing for 25 years? She did fix her mortgage and therefore knew her housing costs for five years, but it is the fact her mortgage payments have actually dropped that she doesn't seem to like, because no one knew, expert or otherwise, which way interest rates were heading.

[Crikeyblimey]

Again - Minty, I know you are cross but if you'd taken the money to the casino you'd be living on a park bench or in a castle by now. This way you have the roof of your choice over your heads.

In your position, after a small "what if" grump, I'd be leaping up and down thinking of all that money you're saving from today onwards. Either save it, spend it on sweets or pay more off your new mortgage. Today is actually a GOOD day for you.

[Bearbehind]

crikey

This is one of the most mystifying AIBU's I have ever read.

five that's the point though, there is no better alternative, hence no argument or discussion to be had.

If you weren't offered a choice then it is probably safe to assume that 5 years ago you would have been told to take a 5 year fix at the rate you did (as that was the decision you reached based on the information available to you).

Are you really saying you'd have been happy that 5 years on, that turned out to be a bad decision?

It seems to me you want all the benefits and upsides of a decision being made for you without the downsides if things actually work out better than planned.

Life just doesn't work like that.

[Crikeyblimey]

Oh, and I'm not far off 50 so can't be accused if being a "bright you g thing" - I just care about the biggest financial commitment I've ever made to keep an eye on what I'm paying and why.

[suburbophobe]

This just shows you have to take your own financial affairs into your own hands and not let anyone else do it - really!

Let this be a lesson for your future....

[caroldecker]

Minty

you got a fixed price for your mortgage - for 5 years - you could have fixed for 25 yrs, but would have had a higher rate for the entire term.
Banks fund your mortgage from short term deposits and borrowing, so pay market rate. To fix your mortgage, they take the risk so charge more. The longer the fix, the higher the charge.

[LondonMan]

The standard variable rate mortgage is an extremely risky product. If we were going to have a regulated market where everyone had the same kind of mortgage, we probably would have standardised it to have fixed rates. So YABU to think you would have been better off if choice had been taken away.

[Bearbehind]

crikey I Think we might be the same person, I nearly PMSL at the post that said the UK mortgage market was dysfunctional compared to the US. It must just have been you and I that saw what the US mortgage industry did to the world economy..........

[MummytoKatie]

I'm really confused. You didn't want to take a punt on your mortgage going up or down so you fixed your mortgage rate. Sounds sensible. You have had 5 years of knowing that whatever happens in the markets you can always pay £800 on your mortgage.

In fact had you taken the gamble your horse would have come in. But you didn't because you didn't want to gamble. But you are moaning because you don't get the mony from the gamble when you didn't put the stake up.

What did you actually want? To be forced to take a variable rate? But presumably you only want to be forced that now that you know the answer. Had you been forced into it and rates gone up and you were not able to afford your mortgge then you would have been really cross?

Or is it that you object to other people "winning" and in fact want everyone to be forced to take a fixed rate?

I just don't understand. You want a "third way". But what in the world is that? You can have fixed. You can have variable. I guess in the middle of that is "fixed for a short time then variable" but we already have that.

Buying a house is inherently risky. You are spending hundreds of thousands of pounds, that you do not have - meaning that you are generally ridiculously geared, on an asset. Which may fall or rise in value. "Which mortgage to get" is tiny in comparison to that!

Incidentally your choice probably only cost you over 4 years not 5 as rates fell in late 2008 and early 2009. Not much comfort but maybe a little.

[Mintyy]

Crikeyblimey - I want to agree with you because I am in my real life a glass half full kind of person. Its just the small matter of £20,000 - £30,000 that's sticking in my throat