interest rates cut-sick as a parott!!!

panic_2

well i guess that could have been the issue,if mortgage rates went up,utility bills went up,food prices went up all at once,then there could have been more problems with paying the mortgage

opinions4u

I think I'm financially savvy but:

1) I bought an endowment policy in 1990.
2) I allowed the premiums to be debited to the mortgage - increasing the debt (well, house price always go up)
3) I allowed my insurance premiums for buildings/contents to be added to my mortgage debt.

I ended up in negative equity!

We can all make mistakes - personally, I don't think you have. You took the best deal for you at the time. Good call. If inflation kicks in (which it may) rates will go up again. It seems new tracker margins increased by 0.5% after yesterday's rate cut!! So if you'd been making the decision today you'd probably have fixed.

Don't lose sleep over it, enjoy the security of your fixed rate - it's better than adding £900 a year to your mortgage debt like I did!

midflight

Good call. If inflation kicks in (which it may) rates will go up again.

What's your reasoning for that? It's often quite the opposite.
Try googling "inflation up interest rates down"

Who on earth advised the OP to take out a fixed mortgage at this moment in time, when all signs pointed towards interest rate cuts? (and slightly less obvious, better mortgage deals on the horizon)

It's the same story with all the people who were recently 'advising' us to "GRAB the best deals that are available NOW and pay a fee to reserve them even if your mortgage still has 6 months to run, because otherwise you'll be stuffed, oh and don't worry if better deals DO come along - you'll only lose the reservation fee..."

My mortgage runs out in December, and if I'd taken the above 'advice' over the past few months I would be fuming right now...

rp8049

Yeah, the advice of grabbing what you can seems very strange to me at the moment. Given the Base rate is expected to sink close to 3% in the next year. Despite inflation rising, they will have to keep cutting rates to give the economy any chance of recovery, and with fuel prices begining to fall again, inflation has pretty much topped out, it will fall in the next few months adding more pressure for rate cuts. Consumer spending has been slashed - home owners are actually adding equity to their houses rather than removing it for the first time in a very long time. Everyone's accepting that the recession is real and is here, and it's not going to stop any time soon.

I finally opted for a BRT at .79 yesterday, could have gotten .49 but with 999 arrangement fee and some other fees in there, I went with the higher rate and no fees. So hopefully it should do me well for a few years at least until rates bottom out and look to rise again.

speedbird1973

They rate you have isn't a bad one!

Don't worry about it.. I think rates will be up as well as down over the next few years. What ever the state of interest rates if I can pick up a long term fixed rate deal for under 5% I'll jump at it... even if my tracker rate is lower.

financial_selector

Thanks rp8049. Where did you get your 0.79% BRT, and what were the fees? I've been offered a BRT from Lloyd's but it has fees of about £800 (in addition to the fees for leaving my existing provider, Abbey).

Locoblade

financial_selector wrote: »

Thanks rp8049. Where did you get your 0.79% BRT, and what were the fees? I've been offered a BRT from Lloyd's but it has fees of about £800 (in addition to the fees for leaving my existing provider, Abbey).

I'm fairly certain it would have been First Direct's offerings, which have zero fees on the +0.79% deal and a £999 fee on the +0.49% deal. Im on the latter but the former is a good deal if you plan to be on it for a shorter period then jump to a fixed if they drop.

Gorgeous_George

It is not surprising that so many people fix at the wrong time. Buying high, selling cheap.

When rates rise people want security and fix but it is often too late. As rates fall, they all want to track - but that 's the time to fix!

Some well-respected posters, including a mortgage adviser (surely, in the wrong job) have fixed when rates were at, or near, the top. Nearly all commentators were suggesting the next move was down for some time.

GG

beecher

Gorgeous_George wrote: »

Some well-respected posters, including a mortgage adviser (surely, in the wrong job) have fixed when rates were at, or near, the top. Nearly all commentators were suggesting the next move was down for some time.

GG

And the choice to fix regardless of rates being at the top might be the correct one for some people. I've fixed because I was able to do so for £250 - with a mortgage of £40,000 small changes in rates make very little difference to me but I wasn't willing to take the gamble that I'd have to pay £1000 to get a cheaper deal and wanted to know what I was paying. Unless fees are drastically cut in the near future, I'll have made the right decision - and even if I haven't, who really cares?

chodges84

panic wrote: »

this is my first mortgage,i know that im gonna make mistakes over the 25 yrs term, but it still dont feel too good, i know that being on a fixed does mean that i can afford it every month but it would just have been nice to save a bit more money each month (£150ish if rates dropped to 3% over 3yrs being on a tracker) and to make the right choice.spose only time will tell,thank-you

In my opinion the biggest mistake you could make over the 25 year term is if the term lasts for 25 years.

Once you are settled and maybe enjoyed a nice couple of payrises, then start over paying what you can. You'd be staggered at how little you have to over pay for it to make a difference. If you can overpay by £40 or £50 a month, you'll make that £7000 back in the future and probably a whole lot more besides. Overpayments are simple, just make sure you choose a mortagage where they don't charge you to do so.

Have a look here: http://forums.moneysavingexpert.com/showthread.html?t=155707 there are lots of calculators to help you work out how quickly you can pay off your mortage (I use the one tomstickland made, halfway down the page.).

I guarantee that using one of these will make you feel better. (p.s i don't have a mortgage, but this is what i intend to do when I get one.)