My Interest rate gamble pays off again!

chucknorris

caronoel wrote: »

With all the uncertainty from Brexit and the punitive taxes on investment properties slowing house price inflation, I can't see the BOE raising rates for the next 3 to 5 years at least.

It isn't so much the mortgage rate that I pay that has caused me to delay and to stall the selling my higher yielding properties (although with a low margin tacker it is a small part of it), it is mainly having to pay the CGT sooner, whereas if I delay the sale, then the amount of CGT remains working for me, rather than being lost.

goodfella321

Dithering Dad, AKA Renovation Man asked me to make an update on here for him. He has just arranged a 10 year fixed rate mortgage with Barclays @ 2.39%. The remortgage starts in May when the existing 5 year fix ends. The 10 year fix is actually cheaper than the old 5 year fix. Bargain!. This means that his gamble is over and his naysayers have been put to the sword. No matter what happens with the BoE rate, he is safe and secure. In 10 years time, he will have the mortgage virtually paid off and will more than likely sell the farm at huge profit (free of stamp duty) and buy an off-grid eco home

He asked me to thank you all for your interest over the years in his bold and successful gamble. Heap praise upon his exalted head, so he is far and away the greatest amongst the MSE house price debate forum members. He has utterly won.

StevieJ

goodfella321 wrote: »

Dithering Dad, AKA Renovation Man asked me to make an update on here for him. He has just arranged a 10 year fixed rate mortgage with Barclays @ 2.39%. The remortgage starts in May when the existing 5 year fix ends. The 10 year fix is actually cheaper than the old 5 year fix. Bargain!. This means that his gamble is over and his naysayers have been put to the sword. No matter what happens with the BoE rate, he is safe and secure. In 10 years time, he will have the mortgage virtually paid off and will more than likely sell the farm at huge profit (free of stamp duty) and buy an off-grid eco home

He asked me to thank you all for your interest over the years in his bold and successful gamble. Heap praise upon his exalted head, so he is far and away the greatest amongst the MSE house price debate forum members. He has utterly won.

Well done DD :T

Arklight

The forum HPC.co.uk on hearing this news.

vivatifosi

Congratulations! We are in the last year of our mortgage too. It is starting to feel good.

Percy1983

ilovehouses wrote: »

Percy1983, Graham_Devon, Dervprof, geneer, Jimmy31 - you guys sure took one hell of a beating.

eh?

I didn't gamble on my mortgage, the results are in, it cost me approx £180 more over the 5 years as I didn't gamble.

Either way only 19 years left on my mortgage so everything is going in the right direction.

Percy1983

ilovehouses wrote: »

Renovation Man did gamble and this thread is his tribute as he won big time.

He'd probably snort with laughter hearing about your £180.

Hey if it spreads a little happiness all is good.

The reality was don't fix and potentially save £180 but be at risk of rate rises or fix and it would potentially cost me £180 if rates didn't rise.

Easy to say with hindsight I made the wrong choice but the way I look back is it cost me £3 a month for certainty in a big part of my out goings for 5 years to which it was worth every penny.

If the reward to risk ratios where different I may have made a different choice which I can see in the case with renoman it would seem there was bigger rewards with lessor risks than my situation, if its figures out well for him then thats great, happy days indeed.

Funny thing is I now have less money than I have had in years and I am the happiest I have ever been, business is booming but of course when you give up a rather well paid job there is the initial drop in income. All the bills get paid and I have more time with my son.

There is no winners or losers in life as the sooner you realise the race is only with yourself the happier you will become.

Filo25

Looking forwards on interest rates is maybe a little more interesting than it has been for a while.

With global growth seemingly trending upwards, and most of the major markets looking stronger, it will be interesting to see if inflationary pressures finally start to build, and we see more upward pressure on rates.

I have generally been very dovish on how quickly we are likely to see rising rates, but persistent rising inflation is the one thing that could put an end to that.

goodfella321

StevieJ wrote: »

Well done DD :T

Thanks StevieJ. As you know, if I admitted it was me, Graham, et al would start crying to the moderators and they would delete my user and all of the posts. Interestingly, by doing so they have just killed off the forum. I've checked out the site every once in a while and from having about 40 or so regulars in the heyday of my combative discussions with the likes of !!!!!!, Geneer and derv, this forum now has 18 or so regulars and has become very staid and pedestrian. I guess Graham and others should be careful what they wish for. They wanted an echo chamber full of people holding their same views so they cried to the mods when they were disagreed with. The funny thing is that when they got their echo chamber they stopped visiting it (or hugely curtailed their visits) because it was boring. :rotfl:

goodfella321

Percy1983 wrote: »

eh?

I didn't gamble on my mortgage, the results are in, it cost me approx £180 more over the 5 years as I didn't gamble.

Either way only 19 years left on my mortgage so everything is going in the right direction.

I don't think you quite understood what the gamble was percy. I also had fixed rate mortgages. I had a 3 year fix, then a 5 year fix and now a 10 year fix. I also paid more monthly than I needed to because of the fix. The gamble was to max out my borrowing (5 x income) at £300k while mortgages were so cheap at these historically low rates.

My mortgage is now £200k and just 2.5 x salary and I will have had less than 3% mortgage rates for 18 years by the time my new 10 year fix is complete.

To recap, I maxed out my borrowing on the gamble that rates would stay low for long enough for me to significantly pay down that debt (and grow my income) so that I was secure when rates finally went up. With this final 10 year fix, I am secure, so the gamble paid off.