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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:
Bobyan · 08/05/2013 21:11

You made the wrong choice. Suck it up.

HollyBerryBush · 08/05/2013 21:13

I fixed at 5.something for 10 years.

I have no issue with this at all.

I also remember 20%+ mortgage rates.

I did look at changing to a 2.something % as I have 5 years left on that rate

To keep the same payments, I would drop 2 years, add 6K to the amount outstanding through penalty fees....and sadly I really CBA to fuck about with it all

slate me

Original poster
Mintyy · 08/05/2013 21:13

Bobyan - yes, I am very lucky that house prices have risen while I have been a home owner (since about 2000). I agree. However, I cannot afford to move from a 3 bed house to a 4 bed one, just incase you thought I spend my days off rolling around in thick carpets of £20 notes.

OP posts:
Saski · 08/05/2013 21:14

How is the insurance policy comparison not apt?

Bowlersarm · 08/05/2013 21:14

Mintyy-you need to stop stamping your feet toddleresque now. No one (hardly anyone) agrees with you.. It is what it is. That is the way mortgages work.

There is a choice with taking out a mortgage. You have to make the best one for your situation. No one else wants this choice taken away from them, which seems to be what you are saying.

Bobyan · 08/05/2013 21:15

My heart bleeds.

EverybodysStressyEyed · 08/05/2013 21:16

the economics work the same way

and they are all interlinked - farmers do exactly the same with commodity prices

I will sell my field of wheat in a years time and I want to make £X.

The bank will say to the farmer - we will guarantee you £X when you sell but you will have to pay us a fee (like interest). The bank price the fee according to how risky they think it is. The farmer makes a decision as to whether he thinks the fee is reasonable for the risk.

It is exactly the same with your fixed rate mortgage - the bank need to borrow money on the markets so that they can lend it to you. the price they are paying for that is the basis of the price they then charge you. they make their predictions based on the best info they have at the time. In 2007 there weren't many people predicting the financial crisis

Bearbehind · 08/05/2013 21:16

mintyy between 1975 and 1991 interest rates were rarely in single figures. It is only on the last 4 years that they have been at historical lows so 30 averages wouldn't have helped.

It really is you that doesn't get it.

Shit happens, no one can predict the future. You make informed choices and live with the results.

How is it any different to choosing to fly in a plane that might crash and kill you or choosing to have a child that might have a serious illness. Given the choice of course you'd have a preference but you can't have a fucking choice so you just have to get on with it.

Bearbehind · 08/05/2013 21:21

^^ Actually I mean you can't have a guarantee and you have to make a fucking choice!

Original poster
Mintyy · 08/05/2013 21:32

"Shit happens, no one can predict the future. You make informed choices and live with the results."

Informed choices? informed by what? informed by who? My choices weren't informed by anything, they were a guess at best and an opt for the easy option at worst.

This is my point.

Roffling at the plane crash analogy!

OP posts:
Original poster
Mintyy · 08/05/2013 21:33

Bobyan?

OP posts:
everlong · 08/05/2013 21:36

This reply has been deleted

Message withdrawn at poster's request.

Original poster
Mintyy · 08/05/2013 21:37

Aibu to say tough tits to all the people who have bought on 2.5% mortgages when they find themselves repossessed when the rates go up to 5%?

On our £180,000 that appears to be the difference between just under £400 per month to just over £800 per month?

I guess I am allowed to sit back and say "well you placed your bets" when that happens?

OP posts:
Bearbehind · 08/05/2013 21:38

If that was the case it was your choice not to be informed, the information is out there but it's not guaranteed and no one could have predicted 5 years ago that rates would have been this low for 4 years ago. If they could've they'd be rolling in it now.

Why is my plane crash analogy funny?

Original poster
Mintyy · 08/05/2013 21:39

Because of the HUGE difference in risk!

OP posts:
Bearbehind · 08/05/2013 21:40

TBH if your mortgage is still £180k and you had a mortgage when interest rates were 15% I'm guessing this isn't the first bad decision you've made.........

Bowlersarm · 08/05/2013 21:41

Of course you would be reasonable to say that (although a little unkind) if those people couldn't afford the mortgage in the event of rates going up. 2.5% isn't a rate that will be around for ever. They will go up at some point. It would be naive to think otherwise.

MyDarlingYoni · 08/05/2013 21:43

We also fixed for five years and could have gone variable for cheaper but I did not want to be obsessed with rates, checking every speech and up date by banks, reading everything I could all the time trying to predict what they would do. Which is what I was doing as last deal came to an end.

We got a decent fix, and to be honest -= the absolute peace of mind not worrying about it has been worth the slight over spend.

I would have been worried sick on a variable.

If we had more coming in and no DC we could have gambled and it not mattered so much but we had no wiggle room should they go up.

mrsminiverscharlady · 08/05/2013 21:43

Informed choices? informed by what? informed by who? My choices weren't informed by anything, they were a guess at best and an opt for the easy option at worst.

Well that's your problem isn't it! I could understand your frustration a bit more if you said that you'd considered all your options, educated yourself, took advice and made the wrong choice. But you didn't bother and it cost you money. The financially savvy aren't like that by luck; they spend time doing research, they read stuff, they get advice and they make informed choices.

If you don't do those things, then yes, you're just gambling with your money. And if you don't like gambling then the sensible thing is to inform yourself and make real choices, not just guess or take the easy option.

Crikeyblimey · 08/05/2013 21:45

Bear :) funny as the proverbial!

Yes - people take risks borrowing huge amounts (as much as they can possibly afford) when the rates are low. That is their choice and yes hey could come massively unstuck if rates rise sharply. That would be the ideal time to fix - when rates are on their way up.

OR - people could actually think about the risks, make a judgement call and maybe not borrow a shitload of money just to live somewhere naice or keep up with the Joneses.

Will you just enjoy the fucking fact that you now have some spare cash and also the knowledge that should rates go up, you'll still be able to afford your house.

Talkinpeace · 08/05/2013 21:45

Mintyy
My aunt bought a £100,000 annuity to provide her with a regular income for the rest of her life.
She died 34 days later, before the first monthly payment was even made.
£100,000 down the drain.
That is the luck of the draw.

Sleepwhenidie · 08/05/2013 21:47

Re being informed, you had access to as much information, whether you sought it or not, about which way rates might move as anyone, including the banks. No one can predict the future, hence the choice of fixing (insuring, as has been pointed out) your payments, or not.

Bearbehind · 08/05/2013 21:47

I give up too.

As someone very rightly said earlier, this must be the blame culture at its best.

If you can't be arsed to research such a big decision then you deserve all you get.

Even if you had researched it or, as you wanted, if you'd been told what do, the outcome would probably be the same.

What good is letting it annoy you doing anyway?

Mimishimi · 08/05/2013 21:55

YABU. My parents somehow managed to secure a loan which was fixed for the term of the loan at 5%. At the time they took it out, rates were a couple of percentage points lower - they got alittle bit of light-hearted flack for it. Then the big 1980s recession hit and interest rates went up to 17-18%. We knew a fair number of families who had been taking advantage of the low interest rates to buy cars etc and they were so loaded up with debt, they got wiped out and had to sell.

Original poster
Mintyy · 08/05/2013 21:59

Bearbehind
I realise you might have left the thread now but, if you have not (or if anyone else is intersted in chipping in) then I am interested in what sort of research you think I as an ordinary punter could have/should have done prior to making my decision.

OP posts: