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!!

[FiveColourFISH]

Fair enough. I'll leave it at that then.

[Mintyy]

MummytoKatie yes I think the third way would be great. Somewhere in the middle of where interest rates have been for the past 30 years. Perfect.

[Crikeyblimey]

I'd stop thinking of the 20 - 30k, that way madness lies.

You have had to pay something for your mortgage over the last 5 years. Look at your statement and work out how much actual capital you've paid off. Ask about making extra payment on this new one and if you can still afford the £800 then keep paying it and watch those numbers drop.

[Mintyy]

Suburpohobe
"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...."

Yes, thank you for that. Neither dh or I are involved in any way in banking or the finaicial markets. So we chose the route that cost us thousands and thousands of pounds. We did exactly what you said . We took our own financial affairs into our own hands. But a bona fide financial advisor could have given us exactly the same advice. We took a 5 year fix in May 2008. That is a long time ago.

[Sleepwhenidie]

I'd echo whoever pointed out that buying a property is not compulsory. Just out of interest Mintyy, what has the value of your house done since you bought it? You weren't just paying to house your family, you could have thrown £600 at a landlord in rent every month and done that. You were also buying an asset. You said yourself you don't like risk - by fixing your rate you removed the risk, unfortunately it cost you more than you would have had you taken it but surely you understood at the time that it could go either way ?

[Bearbehind]

mintyy what £20,000 to £30,000 are you referring to? That might have been the difference in your old and new mortgage payments over the last 5 years but interests rates have been at 0.5% for 4 years now and your redemption penalty was only £2k. You chose to stay in that position despite knowing what rates were as you thought the might go up.

[EverybodysStressyEyed]

So you want the government to work out what the average rate would have been over the last 30 years and then tell the banks to use that rate for all mortgage products?

[Mintyy]

"So you want the government to work out what the average rate would have been over the last 30 years and then tell the banks to use that rate for all mortgage products?"

Well it seems to be a fairly reasonable starting point?

[Crikeyblimey]

This, I think is what many people missed. I don't work in banking or finance, I'm just bloody strapped for cash so I'm very very careful with my money.

I haven't always made the right choice. Who has?

However, if you'd paid the £2k to switch a few years ago, you'd have been saving for ages. I don't mean to sound smug. You really can only look to the future. I've said in almost every post that I understand you are cross. But you really only have yourselves to blame for taking your eye off the ball.

All that said - I really think you need to get last this and start being gleeful about what you will NOT be paying from now on. You can't change the past but you CAN enjoy the future.

[MummytoKatie]

Look I'm 8 months pregnant and have a cold so not at my brightest but but but....

Isn't thatexactly what you got?!? You had a rate of 5%? I haven't done the maths (see the knocked up and poorly comment - normally I'd jump at the chance of doing some sums) but I'd have said that the 5% rate that you got roughly is the average over the last 30 years.

And what you did is the exact opposite of taking the money to a casino. You didn't gamble it. You knew exactly how much you would have at the end.

I think that the problem is that you keep seeing people wandering past, waving their casino winnings and saying "yahoo - red came up!" and you are thinking "but red is my favorite colour - I would have bet on red" but the fact remains that you didn't.

And had black come up and they been wandering past sobbing as they had lost their houses then you would have been able to close your door and be glad you didn't go to the casino.

[Saski]

The insurance analogy is apt. The insurance payment is fixed (like your mortgage) - it's a swap for the variable/unknown (a flood - an increase in interest rates) is unknown. It fixes your costs. How many different ways are there to say this?

I'm going to say I doubt you were not advised.

[Mintyy]

Crikeyblimey

What if I had paid the £2,000 to switch years ago and the rates had stopped being so low and had gone back up again?

Why don't you understand?

[Crikeyblimey]

We'd all be paying WAY over 5.something % if we had to pay the average of the last 30 years. My first mortgage was 13% and that was low for the time.

[mrsminiverscharlady]

YABU and essentially stamping your feet and saying 'but it's not FAIR' like a toddler. Buying a house is a gamble. If you're 50 I'd guess you bought your first house a fair while back and have done very nicely from house price rises. Lucky you.

[Mintyy]

The insurance analogy is not apt.

[Lonecatwithkitten]

I think it is very possible to gain the knowledge to be financially savvy about mortgages. Read the money sections in the weekend broadsheets, watch money type program's on TV learn about the difference between Libbor and Bank of England rate, read about how they analyse the economy and the rates what are key industries and how are they performing.
I have no specialist financial training just have done all of this and in September 2008 took a massive loan and a very educated guess that interest rates would fall and they plummeted. I have won massively as I took the time educate myself.

[Bobyan]

So how much has your house value risen then?

[Mintyy]

But yes of course I agree I am very much stamping my feet and saying it's not fair, like a toddler. That is exactly the point of my thread.

[Mintyy]

Bobyan - what does the value of my house have to do with anything?

[EverybodysStressyEyed]

well yes, 5% is pretty much the average of the last 30 years

how do they work out an average in 10 years time when they have enforced a fixed rate for 10 of those years?

Interest rates are like food prices - supply and demand will determine whether they go up and down. take out those market forces and say hello to a planned economy

[mumblecrumble]

ALso, it is the banks money....

[Crikeyblimey]

But that's EXACTLY the fucking point Minty. Stop fucking moaning about having take. The safe but more expensive route and get over it.

We all keep an eye out to try and second guess when the rates naught start to go up again and then take the option to fix again.

What did you want - a free house? Or - you could ring them and ask them to continue your old fixed rate. At least you'd know where you stand.

I've lost patience now.

[Bobyan]

Because you are moaning that having a fixed rate has cost you money, but if the value of your house has risen, it may well have made you money.

[Mintyy]

I understand what you are saying but is it really helpful to compare food prices (or indeed insurance prices) to housing prices?

[slhilly]

Mintyy, you seem to be rather missing the point. No-one can predict the future. No-one. Not you, for sure. But not the banks either. And not the government.

Say the government did what you said but did it for the future, ie set the bank rate that everyone was going to use for the next 30 years. If (if? when!) that rate diverged from the path of the UK's economy, every mortage payer would either be massively overpaying or massively underpaying. So either we or the entire financial system would be hugely out of pocket - the sort of scale to make the crash of 2007 look like a storm in a teacup.

You want a comfort that's not on offer.

In any event, the problem with housing in the UK is not primarily about mortgages, it's about house prices. A shortage of supply, lots of demand and subsidies that just reset the starting point. The financial system's dysfunction makes this problem worse, but for once it's not the root of the evil.