Mortgage regret!!

[BringItOnxxx]

Please help me stop beating myself up. I did a product switch on 31st Dec at the end of 5 years at 5%. Almost a week later the rate went down 1%!! I'm around £40 a month worse of and full of self loathing and regret. :-(

Am I an idiot?

Why would you be an idiot? You weren’t to know. Was there a cooling off period after switching?

You had to get a new product at that time and got the best deal you could at that moment. It’s annoying but yanbu

Thank you for replying. I couldn't see anything on the T&Cs about cooling off. Will phone them maybe.

Change it again

Is it really worth beating yourself up over £40 a month? You weren't to know what the rates would do and you'd be thanking your lucky stars you took it if the rates had gone up again instead of down. No one has a crystal ball, we just have to make the right choices at the time and live with them

Are you sure it went from 5% to 1% straight away? That seems unlikely. Also I thought there hadn't been any 1% mortgages around for quite a while?

There will be an early redemption charge

oh dear

Only if it's a fixed rate mortgage.

And even then, it could still work out cheaper to pay the early redemption charge than the higher interest rate.

The rate went down 1% so assume OP means 4%.

If you can afford the mortgage payments then it isn't a bad decision. It was the decision you chose to make with the facts you had available at the time. You can't predict the future.

Martin Lewis talks about things like this and it's made me feel better. I think this article covers it.
https://www.moneysavingexpert.com/news/2015/02/the-secret-to-avoiding-bad-financial-decisions/

Don't be too hard on yourself, what's done is done. You'd be daft if you'd went for a 5% when you could have got a 4%, but you couldn't at that time.

If you think about the mortgage you had prior to this one OP - you probbably fixed in at a low rate and then interest rates increased so it's just swings and roundabouts really. I couldn't get worked up about it to be honest. But if you do, maybe fixed rates aren't for you and you'd be better off on a tracker next time.

Thanks everyone. I can afford it within the grand scheme of things. I know I need to give my head a wobble. As a single parent it's just harder because no-one else to share the burden of decision making. I was very fortunate in the past 5 years so need to be grateful for that.

Thank you, great article.

If a fairy godmother appeared and said she could rid you of all regret and self-loathing for only £40 a month, would you think it a bargain? If so, forgive yourself a fact that was totally outside your control and enjoy your life a bit more.

Thank you, it's related to low self esteem etc :-(

Oh @BringItOnxxx don’t blame yourself for something thousands of people are doing every day! This isn’t even something anyone could predict. I agree it is frustrating but what would you say to a friend in this situation? Now say that to yourself!

When we came to locking in again we saw it as we knew we could afford the repayments. Yes, there was a chance interest rates could go down, but we knew we could afford what we had locked in, so that was worth the peace of mind.
I've seen so many people saying their repayments have doubled etc, £40 in the grand scheme of things is nothing compared to the peace knowing you can make your repayments gives you in my opinion.

Thank you, I feel less foolish now.

In 1993 I got a fixed rate 7.2% mortgage on a 5 year deal. It was the best deal around. Unfortunately for me within 3 years the average mortgage rate was 2%. It was a gamble - the rate could have gone back up to the 15% it had been a year or two before. None of us have a crystal ball so we just have to take our best guess.

You locked in a fix as it meant no risk of going higher, but you might miss out on saving if it went lower. Don’t beat yourself up it was a sensible call at the time and you’re still safely protected from any risk.

You can’t beat yourself up about this. It’s annoying, yes, but before the rate dropped you were happy with your decision, the security the fixed deal gave you, and the £40pm. None of that has changed and if you hadn’t seen the rate go down you’d be none the wiser. Sometimes you win, sometimes you don’t, but your “loss” is not very much at £40pm! I’d still consider that a win really though given the way everything has been the last couple of years.

Have you already started the new 5 year term? If not they may switch you onto the lower rate now (many providers will honour rate drops if they happen before the new mortgage draw-down, but the onus is on the borrower to ask)