Fixed rate 10yr mortgage 6.59%

abbeywindows

amnblog wrote: »

You have what you wanted - security of payment.

You were not seeking the lowest rates with the highest risks.

A 'balanced payment' was what we were after, but how is it secure anyway if costs are soaring around you for other items? Surely advisors point out risks?

Could I ask, how many 10yr fixed rate mortgages did you give out at that time? And if not why did you advise against it? From what you have said in two short sections, you have covered security and risk, a pretty basic expectation wouldn't you say?

abbeywindows

mememe44 wrote: »

You said in your OP you thought interests rates were going to go up so you decided to fix to protect yourself.

You got it wrong.

Well done on that one Sherlock, I had been pondering that fact

No one can advise you what will happen with interests rates as no one actually knows.

But they probably have a better idea than me, given it's their field of expertise

You can't now claim you were missold given you knew exactly what you were doing at the time.

Yes I, a layman thought they were going to go up, yet in 20minutes that has already been challenged and rightly so, my question is around why advisors do not advise against bad decisions or question the basis for a decision and point out an alternative product?

This of course does not apply to all advisors, but certainly the ones I had

If interests rates had gone up to 15% would you be insisting you were missold what would be a lower rate then?

Seriously? In a world where Every man and his dog are claiming PPI and you take an issue with me asking if there is anything you can do when you receive poor financial advice? Good work. I think you skipping this thread would have saved us both time

Thrugelmir

abbeywindows wrote: »

Now with four years left, we still have a £5400 ERC if we want to get out of it. Now I appreciate this is my mistake, but if I think about when we took it out, we were told, that this would be to secure Halifax for the money they would have made. However with plummeting rates, they've actually made a fortune(to me) on us over the past 6 years. How can they therefore still demand another £5400???? ("Because you signed up to it" would not be a useful answer right now).

To put your mind at rest. Your lender is making the same margin out of you now as was the case 6 years ago. You fixed your rate. Correspondingly the bank borrowed the money at a fixed rate to match. Banks aren't in the business of speculating on mortgage books. Locking rates guarantees the return on the lending margin. Mortgage lending is at best around 1% gross margin.

The ERC is to protect the lender from losing money. If interest rates rose you would be extremely unhappy if they broke the contract. Works both ways.

Personally I would focus on overpaying by as much as I could.

mememe44

You didn't recieve poor financial advice though- you've said yourself, at the time you thought you were making the right decision.

Everyone knows interest rates change. You thought they'd go higher but they didn't.

If you'd been offered a tracker at the time you wouldn't have taken it based on what you've said as you thought you'd be worse off.

Hindsight is a wonderful thing but you can't blame others for your choices.

abbeywindows

mememe44 wrote: »

You didn't recieve poor financial advice though- you've said yourself, at the time you thought you were making the right decision.

I thought I was making the right decision - correct. Trusting a financial advisor for advice - incorrect? What should I have done here, gone to a financial advisor to see if the financial advice I was given was ok?


Everyone knows interest rates change. You thought they'd go higher but they didn't.

Correct, but I'm pretty sure a decent advisor would have stated a case against it.

If you'd been offered a tracker at the time you wouldn't have taken it based on what you've said as you thought you'd be worse off.

No, but a short term fixed probably would have been a sensible way forward.

Hindsight is a wonderful thing but you can't blame others for your choices.

I think they said the same about PPI :-)

abbeywindows

Thrugelmir wrote: »

To put your mind at rest. Your lender is making the same margin out of you now as was the case 6 years ago. You fixed your rate. Correspondingly the bank borrowed the money at a fixed rate to match. Banks aren't in the business of speculating on mortgage books. Locking rates guarantees the return on the lending margin. Mortgage lending is at best around 1% gross margin.

The ERC is to protect the lender from losing money. If interest rates rose you would be extremely unhappy if they broke the contract. Works both ways.

Personally I would focus on overpaying by as much as I could.

Great response and kind of answers my frustration on them making (or not making ) money on my mortgage and also expecting the ERC.

I fully see your point here, but didn't think their rates were locked in.

I'm surprised the thread has got this much activity, but thank you.

dimbo61

If I was in your shoes I would either give us a few more details!
IE loan outstanding ? Loan To value ?
(1) Now if you can remortgage with 4 years left on your current deal you maybe able to change onto a tracker deal or Another FIX of 2/3/5 or 10 years some of which are now under 3%
(2) If you cannot remortgage for whatever reason then read the T&C,s of your Halifax mortgage offer and see if you can overpay ( Many allow 10% each year even when in a FIX)

haras_nosirrah

while the 10 year fix was in hindsight not a great idea (due to drop in base rate rather than your circumstances) the others are right that mortgage advisors did not know what the bank of england base rate was going to do and we still don't. I get people asking me all the time what they think the base rate is going to be in 2 years time and the answer is that it could be anything - therefore if knowing what you are paying is important to you and being able to budget then go for a fixed rate.

Last time there was a recession the rates went up to 15%

If your advisor had said 'yes I understand that you want to budget and that it is important to you to know what you are paying long term but you know what I really think rates are going to fall' and instead they had shot up to 15% and you lost your house due to not being able to meet payments you would rightly be claiming missale as they did not listen to what is important to you i.e. that you did not want to gamble with your house and wanted stability of payments.

If we had a crystal ball we would all be very rich people indeed but all we can do is ask clients what is important to them and advise accordingly - if we speculate on what the rates are going to do and get it wrong then we are for the high jump

pathtofreedom

No one can tell what will happen when you buy property. I bought in july 2007 with a northen rock mortgage, do I blame the mortgage broker, no of course not, as they had no idea of what was coming the same way I didn't.

It has taken years to buy myself out of negative equity but again, these things happen not all areas go up in price. It will probably be another 20 years before the prices where I live are back to 2007 levels.

It is just a fact of life, if you do the sums and can get a deal with a lower interest rate what is your plan now. Imagine there was no fee, if you could remortage tomorrow, would you do another 10 year fixed, or a tracker or what? I am guessing you're put off fixed right now, but if it was me I'd want a 10 year fixed right now for the same reasons you wanted one when you took yours out.

All you can do is compare all the deals out there talk to a broker, see if you have enough cash to pay the fees, or if not do you have enough equity to still get a good deal if you add that to the new mortgage. Do you over pay right now if not maybe think about it and save yourself some interest.

People who remortgage every 2 years might be on a lower rate than you currently, but each time they are paying for valuations, solicitors and maybe setup fee's. All of that can add up so your 6% once you factor no remortage costs probably isn't as bad a deal as you first think.

andyfromotley

Ha Abbey,

don't worry, you are with me. After getting my first hefty mortgage in 1987 only to be someone who suffered the horror of the 15% interest rates. (it went up 3% once DURING one round of golf!!) i have always been averse to being left to the vagaries of the market. So i have pretty much resolutely fixed ever since and have pretty much lost out on every deal since! You just have to look at it as the price you pay for certainty.

Take emotion out of it. Its now a financial calculation, are you better off financially just swallowing the charge and remortgaging (almost certainly) You weren't mis sold and having tried vigorously a couple of times myself you won't dodge the ERC.