My Interest rate gamble pays off again!

shirlgirl2004

RenovationMan wrote: »

Other news, the BoE votes to hold rates.

YAY!!!

It's great news isn't it. We're in a similar poisiton as yourself and can't wait for the building work to be over so we can overpay and be MF.:beer:

Cleaver

Percy1983 wrote: »

I say this as currently I have fixed or tracker, fixed safe enough, tracker a big gamble as rates could rocket.

I think you have a strange concept of risk. From what I can tell, you seem to be saying that fixed rate equals safety and low risk whilst a tracker equals a gamble and high risk. This isn't really the case.

Let's say you're looking at taking out a mortgage over the next five years. Your primary aim is obviously to suit your circumstances, but your secondary aim is to pay as little in possible over the five years in interest. To do this you need to assess risk. There are two risks: the first is that you fix at a rate, base rates don't rise, and you've paid more than you would have done on a tracker. The second risk is that you stay on a tracker, base rates rise and you pay more than you would have done on a fixed.

From that point of view, both options carry an equal risk. And, once you've looked at your personal circumstances, it's up to you to do your own risk analysis on both options. A tracker isn't a riskier option just because it moves around, in the same way that a savings account isn't less risky than an investment just because your capital is protected.

Percy1983

Cleaver wrote: »

I think you have a strange concept of risk. From what I can tell, you seem to be saying that fixed rate equals safety and low risk whilst a tracker equals a gamble and high risk. This isn't really the case.

Let's say you're looking at taking out a mortgage over the next five years. Your primary aim is obviously to suit your circumstances, but your secondary aim is to pay as little in possible over the five years in interest. To do this you need to assess risk. There are two risks: the first is that you fix at a rate, base rates don't rise, and you've paid more than you would have done on a tracker. The second risk is that you stay on a tracker, base rates rise and you pay more than you would have done on a fixed.

From that point of view, both options carry an equal risk. And, once you've looked at your personal circumstances, it's up to you to do your own risk analysis on both options. A tracker isn't a riskier option just because it moves around, in the same way that a savings account isn't less risky than an investment just because your capital is protected.

Well in my circumstances a would class a tracker as not worth the risk right now.

1, the rate isn't much lower. (BOE rate of 1.5-2% could make me worse off).
2, the base rate can only go up. (If they drop it further I am leaving the county).

HAMISH_MCTAVISH

Percy1983 wrote: »

Well in my circumstances a would class a tracker as not worth the risk right now.

1, the rate isn't much lower. (BOE rate of 1.5-2% could make me worse off).
2, the base rate can only go up. (If they drop it further I am leaving the county).

The last time there was a global financial crisis of this magnitude, UK base rates stayed at 2% for 11 years.

When rates rise, it is incredibly unlikely to be very far or very fast. 5 years from today, base rates are unlikely to be north of 3%.

I'd suggest anyone looking at a 1.5% difference between a tracker and a 5 year fixed would be a mug to take the fixed.

Thrugelmir

HAMISH_MCTAVISH wrote: »

The last time there was a global financial crisis of this magnitude, UK base rates stayed at 2% for 11 years.

What happened to asset prices in that time frame?

Percy1983

HAMISH_MCTAVISH wrote: »

The last time there was a global financial crisis of this magnitude, UK base rates stayed at 2% for 11 years.

When rates rise, it is incredibly unlikely to be very far or very fast. 5 years from today, base rates are unlikely to be north of 3%.

I'd suggest anyone looking at a 1.5% difference between a tracker and a 5 year fixed would be a mug to take the fixed.

Interesting point, as it is I will review the situation in more detail when I am actually buying, to think too much now for the goal posts to move would be a waste of time.

Just a quick look at the halifax shows.

Fixed 5.99%
Tracker 5.09%

so a BOE rate of 1.5% and I would be worse off (yes I know neither is a good deal and there is better out there no doubt).

RenovationMan

JonnyBravo wrote: »

I like this thread.
Funny on so many levels.

RM posts knowing he'll get a reaction (which is fun on occasions... cant help myself sometimes .... I know it's hard to believe but....) and then the people who are being baited know they're being baited but still can't resist flinging themselves on the hook.
RM then gets to protest his innocence and proclaim about how he had no enemies til he had an unfortunate incident with Derv. (This does of course rely on us all continuing to not bring up his past identities)
JonnyBravo then has to bring up his past identities and how RM can't help himself how he flips between loving this kind of stuff and being genuinely angered by it to the extent of getting himself banned on purpose to start afresh and how it'll be different next time.
Geneer appears and adds nothing as usual, which must be a little dispiriting for him, but NOOO it's ok cos he can look at Scottish houseprices over 3 weekends in Feb and everything is free or something. Oh and post something with Hitler talking about houseprices.
All we need now is for Graham to bring up how many times a day "on average" RM does this kind of thing and we can then laugh about how Graham needed to be educated on mean, median and mode.

Anyway, its tea time.

You couldn't be more wrong. I created this thread and some others in order to give DervProf, geneer and Graham enough rope to hang themselves and they have done just that.

I have noticed that if I don't post anything about my interest rate challenge (i.e. over the last two or three weeks, he is seldom seen on this board), if I dare say 'oh good, rates are staying the same' then he is all over me. If I pull him up on it, he states he is just a simple poster and there is no vendetta. I created these threads so that everyone could see the FRENZY of posting that he does. Almost every second post on this thread is DervProf. Even when I log off and go home he is on here and the other thread venting his spleen in an orgy of posts trying to get others to support him in his stated 'warefare' against me..

Once I stop posting, so will he and he will return to his normal one or two posts every coupld of days. Should I raised my head again, the red mist will descend on him again and the frenzy will commence.

I get confused with your own posts JB. I have been nothing but friendly with you, I was actually genuinely concerned when you posted about your possible job loss and I was also genuinely delighted when you posted your good news about surviving. I don't think I deserve the above, but oh well those are the knocks.

Geneer and especially graham are simply vultures.

Batchy

Love this thread!

DervProf

RenovationMan wrote: »

Even when I log off and go home he is on here and the other thread venting his spleen in an orgy of posts trying to get others to support him in his stated 'warefare' against me..

A touch dramatic. Where are the posts where I tried to get others to support me ?

RenovationMan wrote: »

Once I stop posting, so will he and he will return to his normal one or two posts every coupld of days.

Thanks, you're doing it again.......

Date Posts

6/7 11
5/7 5
4/7 5
3/7 2
2/7 4
1/7 2
30/6 4

Not "one or two posts every couple of days".

Here, have the noose back.

JanCee

Why don't you put each other on ignore & save yourself some time?