A&L Mortgage 1.49% - too good to be true??

orange102

Hi all,


I've held an Alliance & Leicester mortgage for 8 years and for the last 3 years or so the TOTAL interest rate has been 1.49%.
When I first took it out it was a 5 year fixed at 4.74%.


This rate of 1.49% seems too good to be true and although I'd like to start overpaying to reduce the term, I'm hesitant to contact them in case they realise a mistake has been made.


Has anyone else got this rate - please note this is not 1.49% above base rate or anything else - it's a total of 1.49%!!


So do I contact them or say nothing and save my 'overpayments' elsewhere?

Thrugelmir

Why do think it's a mistake? Perhaps your contractual rate after the fixed term ended was base +0.99%.

Personally I'm on base plus 0.35% on a life time tracker. So pay an effective rate of 0.85%.

As long as you earn more than 1.49% on your savings then it's not worth overpaying the mortgage.

orange102

Thanks Thrugelmir,


I can't find my original paperwork (will keep hunting) but I don't believe it was as good a deal as 0.99% over base - I was pretty naïve in taking out this mortgage and more or less went with the first broker who would lend to me.. hence my disbelief!
Although I suppose when I took it out the base rate was around 5%.. ok it's making a bit more sense now


But yes, I think you're right - I'll keep saving until rates rise.
Thank you !

fewcloudy

Assuming that your post isn't just a sad display of willy waggling, why would you think some mistake has been made? Check your mortgage offer; it'll be there in black and white. *(Ignore)

And although it's a very good rate, there are trackers available today at a rate not much higher. Ok they require big deposits and are not lifetime trackers but still.
My brother has a lifetime tracker much lower than mine, Barclays I think, but it was just good luck when he bought it. I've seen folks on here with lifetime trackers that track at BELOW the BoE BR, sweet.

And yes, contact them, and start overpaying as though there's no tomorrow... (though someone will be along soon to say it's better to put overpayments into an account that pays better than 1.49% interest rate)

fc

orange102

Lol thanks fewcloudy,
It's definitely not willy waggling lol!


This is my first mortgage, and in that respect I consider myself quite inexperienced - so when I see rates advertised in banks of 3-5% as great rates, well I got a bit concerned that mine was wrong somehow. Thanks for your reply (feeling a bit silly for asking now but your response has helped put my mind at ease)

Thrugelmir

orange102 wrote: »

Although I suppose when I took it out the base rate was around 5%.. ok it's making a bit more sense now

Mine was 5.5% base rate at the time.

So in normal times you would be paying 6% - 7% now.

Times aren't normal so make hay while the sun shines. As it'll never be repeated that's for sure.

orange102

Both - thanks so much for your help - for the first time this now makes sense to me.

littlelost

We took ours out on a 5 year fixed and following the fixed rate it was to revert to 0.5% above the base rate which would have equated to a massive increase in payments.

However luckily for ours in the months leading up to our fixed rate ending the Bank of England base rate dropped right down..... We have been paying 1% interest for God knows how long.

All is about to change though as we are moving house and cannot port the mortgage..... Somehow I dont think I will ever get another 1% mortgage!! Lol

fewcloudy

And not wishing to rain on your parade, but the news that West Bromich Building Society have been given the ok to raise tracker rates for their BTL cusomers is an unpleasant result for all us lucky lifetime tracker guys still out there...

http://www.thisismoney.co.uk/money/mortgageshome/article-2931416/Landlords-lose-latest-round-legal-fight-West-Bromwich-BS.html

Ok, it's only landlords with 3 or more mortgages just now, but we can be sure these swines will leave no stone unturned in working out how they can increase tracker rates for all their other "non-landlord" customers too, (to whatever rate they choose and whenever they feel like it apparently).

fc

Ivrytwr3

I have a 2 part mortgage with A&L. 1 part is 4.24% and the other is 1.25% - so yours sounds correct.


I'm out of my fixed rates on both and am thinking of seeing if they can offer a better rate with part1 (4.24%) but as we currently make repayments on part 1, I will no doubt be unable to if I get a new rate - make sense?!

Thrugelmir

fewcloudy wrote: »

And not wishing to rain on your parade, but the news that West Bromich Building Society have been given the ok to raise tracker rates for their BTL cusomers is an unpleasant result for all us lucky lifetime tracker guys still out there...

http://www.thisismoney.co.uk/money/mortgageshome/article-2931416/Landlords-lose-latest-round-legal-fight-West-Bromwich-BS.html

Ok, it's only landlords with 3 or more mortgages just now, but we can be sure these swines will leave no stone unturned in working out how they can increase tracker rates for all their other "non-landlord" customers too, (to whatever rate they choose and whenever they feel like it apparently).

fc

I've been expecting my mortgage to increase for a long time. As a small building society they have little room to work within. Skipton had to raise their rates and break the rate collar some years back. Otherwise the Directors would have breach of their legal fiduciary responsibilities.