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Fixed Rate Mortgage Advice
dave_cdti-sri
Posts: 5 Forumite
Hi all! I've been a member of the MSE email for a while, but this is my first forum post. So i hope someone can help!
In December last year i bought my first house... At the top of the market....:mad:
At the time, when nobody knew what interest rates were going to do, i wanted a fixed rate mortgage so i knew what my monthly outgoings were going to be. So i got a 3 year fixed at about 6.4% (just slightly above the base rate at the time) :mad:.
My question now is... Is there any way i can get a slice of some of the good rates about now by breaking out of my fixed rate, and either re-fix or go onto a tracker mortgage? Or is this a strict no no?
I have a sparkling credit history, have never faulted on any credit/store cards and the one and only loan i've ever had (for a car) got paid off early... If that makes any difference!
Any advice greatly accepted
Regards
Dave
In December last year i bought my first house... At the top of the market....:mad:
At the time, when nobody knew what interest rates were going to do, i wanted a fixed rate mortgage so i knew what my monthly outgoings were going to be. So i got a 3 year fixed at about 6.4% (just slightly above the base rate at the time) :mad:.
My question now is... Is there any way i can get a slice of some of the good rates about now by breaking out of my fixed rate, and either re-fix or go onto a tracker mortgage? Or is this a strict no no?
I have a sparkling credit history, have never faulted on any credit/store cards and the one and only loan i've ever had (for a car) got paid off early... If that makes any difference!
Any advice greatly accepted
Regards
Dave
0
Comments
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Sure, just pay the ERC(Early Release Charge). Will typically be between 2% and 5% of the original loan, but check your KFI. Whether that makes financial sense or not is of course for you to run the numbers.0
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I'll have a gander through the small print.
Thankyou0 -
Hi Dave,
I'm in the same situation. In time of "EXCEPTIONAL FINANCIAL CIRCUMSTANCES" as recognized by the government, where everybody is being bailed out, why my mortgage should be bound by rules drawn up for a different scenario.
Banks are making huge amount of money out of people with a fixed mortgage in a way that in my view is bordering with profiteering.
This morning I logged a formal complaint with my lender and to my surprise they said that if more people complained they will be forced to review the situation. Get on the phone.
Cheers
Luigi0 -
The whole point of taking out a fixed rate deal is to allow you to commit at a level that you can afford. How would you feel if BR went the other way and the bank came to you asking for an increase due to exceptional circumstances? It can be very frustrating when there is a significant drop soon after fixing but at least you are still paying what you can afford. My advice is do the sums and see what you would need to fix at in order to recover the ERC but be wary of taking a tracker, if rates climb (unlikely I know for the foreseeable) you could quickly be back to and over where you were and presumably in a position that you can't afford.0
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GrumpyKlaus wrote: »Hi Dave,
I'm in the same situation. In time of "EXCEPTIONAL FINANCIAL CIRCUMSTANCES" as recognized by the government, where everybody is being bailed out, why my mortgage should be bound by rules drawn up for a different scenario.
Banks are making huge amount of money out of people with a fixed mortgage in a way that in my view is bordering with profiteering.
This morning I logged a formal complaint with my lender and to my surprise they said that if more people complained they will be forced to review the situation. Get on the phone.
Cheers
Luigi
No it isn't profiteering. They borrow the money to lend to you as a mortgage.
The whole point of a fixed rate is you gain certainty - so no upside but no downside either.0 -
How would you feel if BR went the other way and the bank came to you asking for an increase due to exceptional circumstances?
I'm pretty sure that there is small print within the mortgage that does say if the base rate rises by X amount then a increase could be inccured. Not the other way though.0 -
dave_cdti-sri wrote: »I'm pretty sure that there is small print within the mortgage that does say if the base rate rises by X amount then a increase could be inccured. Not the other way though.
Pure speculation on your part and in fact totally incorrect. If I bet on a horse tomorrow and it loses, do you think the bookie will give me my money back?? You paid your money and made your choice. Live with the consequences and grow up....... or don't sign any more legally binding contracts until you are grown up enough to accept the consequences.
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Pure speculation on your part and in fact totally incorrect. If I bet on a horse tomorrow and it loses, do you think the bookie will give me my money back?? You paid your money and made your choice. Live with the consequences and grow up....... or don't sign any more legally binding contracts until you are grown up enough to accept the consequences.
The last time i checked bookies and banks were radically different businesses. My thread was an open request for advice, not to become a slanging match. I am quite able to carry on paying my fixed rate at the moment. But as a hard working financially very sensible person, it annoys me that any individual riled with debt and unable to keep up payments is being bailed out and helped. Yet i'm left at the opposite end of the scale. If anyone else has any constructive advice, or indeed if the only solution is to put up with the fixed, i'd be happy to hear from you.
Cheers0 -
the only solution is to put up with the fixed
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Pure speculation on your part and in fact totally incorrect. If I bet on a horse tomorrow and it loses, do you think the bookie will give me my money back?? You paid your money and made your choice. Live with the consequences and grow up....... or don't sign any more legally binding contracts until you are grown up enough to accept the consequences.
Trying to follow your logic...but why the banks and god knows what else had to be rescued with tax payers money?0
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