Fixed rate mortgage nightmares.

Peelerfart

I'm finding this an interesting thread as I've never been a fan of fixed rates and cannot understand the determination that some people have with them.

Often the question is asked "how long should I fix for ?" ,but less frequently is it asked "should I fix ?".

Benjo is quite correct IMO if you worry about rising interest rates and servicing the loan then fix definately. If not then more choices are open to you.

I would like to ask the OP if he feels responsible for the decisions he made or is it all someone else's fault ?

SandC

LizEstelle wrote: »

I would like to know where all these trackers are that the apologists indicate we are supposed to obtain so easily as an alternative to SVR or fixed.

Where are they?

I would love to get one... but my current lender is conspicuously not offering.

My ailing memory seems to indicate that the Cartel withdrew them in a concerted rush a year ago...

Where did anyone say it was easy to get a tracker? Or anything else for that matter?

Why aren't people screaming about the rates that credit card providers impose? Shouldn't they have trackers and fixed rates also?

Gorgeous_George

Bringing credit cards into the argument is a red herring. I neither know nor care what rate my CC companies' charge as I do not pay interest. I am only concerned about the cashback available.

If our society wanted to be fair to all, it would need to increase rates for those of us on super low trackers and decrease rates for those on more expensive fixes. Of course, if times were different, it would need to be prepared to allow fixed rates to move higher so that those on trackers could be let out of their contracts.

Perhaps we need to take the choices away and impose deals on borrowers. Maybe legislate such that lenders can only offer one mortgage product (adjusted for different risk profiles).

GG

Peelerfart

A few interesting points George, particularly the one requiring more legislation.

Definatley the way ahead .

PF

Harry_Powell

Good2go wrote: »

thats the trouble with fixed rates !!

you pay the price for security each month....like others have said, im sure no one would be contacting their bank if the rates went sky high and they were paying far under the current rates !!!!

bottom line is , that they are a gamble, sometimes it works out, sometimes it doesnt....

If you get a fixed rate mortgage for the security of knowing how much you'll be paying on your mortgage each month, then there is no gamble at all, you get exactly what you wanted.

The problems come in when people think they can beat the banks. Just like you can't beat the bookies, the whole system is weighted in their favour and they employee better mathematicians and experts than we are.

If you're a worrier and want to make sure you can afford your monthly payments regardless of BoE rates, then get a fix. Otherwise don't.

It's not rocket science.

Conrad

sean1881 wrote: »

I get the impression that many of the replies posted on this site are from bankers or mortgage advisers who are obviously going to be only too quick to squash any descenting voices.

Your brain is not well calibrated. You are mental short cutting, that is to say, manipulating facts to suit your very narrow minded view of the Human condition.

Learn to think objectively like you should have done back in 2006 btw when MORTGAGE ADVISRES LIKE ME WERE VERY VOCAL WARNING OF THE COMMING CRASH - I took a lot of stick from happy clappies at the time that all told me prices could only go up, what with all the Poles and lack of housing.

ILW

sean1881 wrote: »

I agree entirely with the last post. This is a virtual cartel situation.

The reply which says "If you thought the fees where ludicrous, why did you agree to them" amazes me totally. If all the banks offer basically very similar packages all with similar fees, then what choices do we have if we want mortgages?

I accept that settlement fees could be justified when the market is rising. For example if I wanted to sell my house that I was only able to buy because the bank was able to lend me the money and then went on to make , say £50k profit on it, then I would not resent paying two or three per cent of the mortgage value back as a settlement lump sum, but when people are often having to sell their houses and have already contemplated making a £20k+ loss, how can the banks justify increasing the pain even more by enforcing these fees?

I get the impression that many of the replies posted on this site are from bankers or mortgage advisers who are obviously going to be only too quick to squash any descenting voices.

Oh do stop whinging. You made the decision to fix, nobody forced you.
Why did you not get a .5% tracker? would have been a much better deal.

Stixx

I took my mortgage out in Oct 2008 - fixed rate 7.8% for 3 years - it's not the best, but I know how much I have to pay back over the next few years and that suits us fine, we were limited to what rates we were offered because we only had 5% deposit. With any luck when it comes to remortgaging we may get a better rate of interest, even if we don't at least we know that it's affordable either way.

Gorgeous_George

What if the government force everybody have variable rate mortages but then encourages people to edge their bets by gambling on variable rate movements. Those who would have wanted a fixed rate bet that rates will rise and those who would have preferred a tracker bet that they will fall.

Maybe it could use an insurance mechanism rather than gambling. Eother way, the Treasury gets the tax.

GG

daveb975

Gorgeous_George wrote: »

Are you sure its £350 per month that you would have saved? Is your mortgage in the region of £400K on repayment terms? Or £280K on interest only?

I am not sure it is that unrealistic. If the OP has a £100k mortgage @ 5.89%, they will be paying close to £500 per month interest. If they had taken the 1.49% tracker that was available from First Direct last year, their interest payment would be around £125 per month - c.£375 less.

I have always has fixed rate mortgages as I like the security of them, but have changed to a tracker with no tie-in at the moment. I am making a good saving each month, but am using it to overpay in the knowledge that most of this benefit will be taken back when IRs go up and I am stuck without a decent fixed rate to move onto.

5.89% is a good rate in historic terms. There will always be some people who switch between fixed and tracker rates at exactly the right time and pay very little for their mortgage, but a very high proportion of people will be stuck paying a higher than average rate for a good part of their term.