Fixed Rate Mortgage

bobanddawn · 24 June 2011 at 9:37AM

In July of 2008 we were telephoned by our mortgage provider and offered a fixed rate for different periods, 2, 3 and 5 years. We took the 5 year option at 6.29%. For some time we have had the 'feeling' that the banks were anticipating a substantial drop in rates and were anxious to fix as many mortgage rates as possible which was the basic motive behind the intial phone call I received. Fixing the rate has cost us many thousands over the past 3 years. Are there any known grounds for my 'feeling'?

samtheman1k · 24 June 2011 at 9:44AM

You have grounds for feeling that you have been shielded against the risk of any rate rises over the last 3 years...

beecher2 · 24 June 2011 at 9:47AM

No you have no grounds whatsoever for your 'feeling'.

Lord_Isleworth · 24 June 2011 at 11:03AM

I feel your pain. I am also on a 5 year fix of 5.79 taken out late 2007...just before rates dropped. When I win the lottery I will sort you out

latecomer · 24 June 2011 at 12:18PM

Did they recommend you fixed or did they just offer you a fixed and you selected it? If they said or suggested that they suspected rates were going to rise then you might have cause to complain but other than that you made a bad choice.

If the rates had gone the other way and they asked you to pay more what would your reaction be?

PS We did the same 5 year fixed @5.39% - it hurts a lot but we did it because we couldn't have afforded the payments if they had gone up by 2-3%. It was the right choice for us as we needed to protection that you get with a fixed rate.

originalmiscellany · 24 June 2011 at 12:30PM

Ouch

I guess that's the risk of taking a fix - but if interest rates rocketed to say 20% you'd be laughing.

That said, your "feeling" doesn't really carry any weight in terms of having a ground for complaint.

Ximian · 24 June 2011 at 1:29PM

I also made the choice to fix just before the rates fell. To try and make the most of the situation I have overpaid (max 10% p/a) as much as I can afford the past few years. I was considering changing to a lower mortgage rate but the ERC is 4% so I'll just continue to overpay.