Rateguard

neilly43

Just had a visit from a mortgage advisor. Currently am on a variable rate of 2.5% so they didn't try to sell a new mortgage to me but did push an insurance product called RATEGUARD. For a set monthly premium you can protect your martgage rate (+1%) so that if my rate went above 3.5% they would pay the extra cost. Does this sound like a good deal or is it a case of banks trying to get more money out of us when no one wants to changebecause interest rates are so low?

GMS

Depends what kind of fixed rate you could get.

If you could get a fixed rate now of say 4% then work out what the difference in payments would be comapred to the insurance premium.

Do the figures backwards and work out what the monthly mortgage payments and insurance premium would be. Then compare to what a fixed rate mortgage would cost you.

If the numbers stack up then consider the Rateguard, but if a fixed rate mortgage is better then that may be the way forward.

Check the small print on the policy too.

stuartgh

1. I am a 100% mortgage holder on the Bank of England Base rate of 0.5% plus 1.99% standard rate for an interest only mortgage.

2. I possess insufficient spare cash to afford a deposit for a new mortgage (say at 95%) and cannot easily afford the additional admin costs (eg £1,500).

3. Therefore I am seriously considering the Rateguard option as a way of insuring against interest rate rises, with a 24 and 36 month pricing option.

4. It has no additional admin costs and you don't need to move to a new mortgage of course.

I would have thought for mortgage holders in a similar boat this is a product worth considering.

Dave_Ham

5. I am not associated with Rightguard - honest