Mortgage Rate Protection

olivia84

Hi there,

This has possibly been asked before so apologies if this is the case.

I was wondering if anyone knows of any sort of Mortgage Interest Rate Insurance?? as in; when (as we are probably all pretty certain that they will) the Bank of England increase interest rates, is there anything that those of us who are on the SVR with no way of fixing our mortgage (e.g - bad credit/negative equity/no deposit and no 100% mortgages out there) can do to prepare for this?

I used to pay £24 per month to a company called RateGuard - i think they were connected to the company Countrywide and were based in Gibralta who would pay the difference to my mortgage payment for me if my mortgage rate increased as a direct result of the BoE increasing the base rate.

However, this was a 2 year deal and when it finished i tried to take it out again and they informed me they don't offer the product anymore!

Surley there must be something I can do? there must be millions of people in the same position as me? while i am not quite in negative equity (yet) i would need a 100% mortgage as i just don't have a 10% deposit (i'd imagine i would only get at least a 90% mortgage) i owe £82000 on my mortgage.

any one have any advice on what to do to prepare for the rises that are certain to happen? (obviously there is trying to save something - but if rates go crazy mental then it would be like a drop in the ocean)

i just really freak out about interest rates goiubg crazy like 15% like they did in the 90s or something!

anyone else know of any sort of mortgage rate protection?? i know its sounds too good to be true but you never know.

thanks

Thrugelmir

Best protection is called overpaying ones mortgage, The less you owe you the smaller the impact of any rate rise. Also by improving your LTV you'll be in a position to shop around around for the most competitive rates.

R_P_W

I agree with above. Only way is to overpay your mortgage to bring balance down quicker. Other than that sell the property and rent.

Looking at your signature though doesn't look like mortgage overpayment should be your immediate priority.

olivia84

yea thanks for that - signiture is old but so glad MSE is still as supportive as it used to be. debts were brought down from £35,000 to zero so my priority now is my mortgage.

many thanks

x

opinions4u

There used to be a company that offered this sort of hedge to individuals, based on Bank of England base rate moves.

No idea if it's still on the market, but I'd take the view that you're better paying down your debt than supporting the profit margins of an insurance company.

Paxton

Not sure if this is the right place to post but my mortgage tie in ended some 3 years ago and I have been lucky that my rate is .75% above the Bank Of England rate. I only have 3 years left of my mortgage and have been told I should apply for a new fixed rate. Why?

My current rate of 1.25% is the lowest I have ever paid and the rate hasnt gone up in quite some time. I know anything could happen but should I do some research - seen posts that mortgage rates will go up?

opinions4u

Paxton wrote: »

Not sure if this is the right place to post

It isn't. <NEW THREAD> at the top left hand corner of the previous page was where to start from.

but my mortgage tie in ended some 3 years ago and I have been lucky that my rate is .75% above the Bank Of England rate. I only have 3 years left of my mortgage and have been told I should apply for a new fixed rate. Why?

Rates might go up.

My current rate of 1.25% is the lowest I have ever paid and the rate hasnt gone up in quite some time. I know anything could happen but should I do some research - seen posts that mortgage rates will go up?

My own view is that you should stick with what you've got. You understand the risks of rising rates and can, presumably, afford to pay more if rates do go up.

R_P_W

olivia84 wrote: »

yea thanks for that - signiture is old but so glad MSE is still as supportive as it used to be. debts were brought down from £35,000 to zero so my priority now is my mortgage.

many thanks

x

No need to get all defensive! Was just stating a fact. You're welcome!

TrickyDicky101

Paxton wrote: »

Not sure if this is the right place to post but my mortgage tie in ended some 3 years ago and I have been lucky that my rate is .75% above the Bank Of England rate. I only have 3 years left of my mortgage and have been told I should apply for a new fixed rate. Why?

My current rate of 1.25% is the lowest I have ever paid and the rate hasnt gone up in quite some time. I know anything could happen but should I do some research - seen posts that mortgage rates will go up?

Only if your mortgage is an interest-only product should you perhaps need to consider interest rate sensitivity as you only have 3 years remaining.