2 months into a 3 year fixed rate, rates have significantly dropped and lender won't budge

csgohan4

OP you made the mistake of staying with the current lender. I just moved lenders for my re mortgage and went from 2.79% to 1.18%, the current retention offers were around 1.69%, no thanks. 

I hope you do comparisons for your insurance and utilities as loyalty doesn't pay

Thrugelmir

Edi81 said:

Oh and loyalty doesn't mean anything with banks. In fact, they love people who bank exclusively with them as they can offer rubbish deals and people still stay.

Customers aren't loyal. Business is business which ever way you cut it. 

fewcloudy

NicLou2020 said:

Mickey666 said:

So, two months in, rates have dropped and you're moaning already.  Supposing Halifax gave in, lowered your rate and then rates dropped again in another few months?  What then, more moaning?  Maybe you should have chosen a variable rate mortgage?

Surely you understand that the whole point of a fixed rate is so you can know for sure what your repayments will be regardless of what happens in the markets?  In which case, you should still be able to afford the repayments.  Basically, you're insulated from the markets.  Who knows what the rates will be in two years time?  Perhaps they will be higher than you're paying now and you'll be happy again.  You really can't have it both ways.

 I am actually annoyed at myself for being so 'unusually' organised and missing better rates by literally 6 weeks.

Hi NicLou2020
I do not see how you have been disorganised in this? Unlucky maybe, but maybe not, as 3 years is a long time, we shall see.
IMO, disorganised is someone who just drifts onto the SVR when their first Fixed Rate has finished and is none the wiser for years, that is not you.

ACG

As others had said, if rates had gone up would you be happy for them to increase your rate? 
You went with a fixed rate mortgage for 3 years which is exactly that. Being 2 months into it is no different to being 2 years into it. 

It sounds like you want your cake and eat it, you want a fixed rate to protect against rate rises, but you want it to come down when the rate comes down, unfortunately it does not work like that. I used to work for another large bank and the amount of times we heard that people will take their business elsewhere if we do not give them what they want - no matter how silly their request was ridiculous. Every bank would treat you exactly the same because they have to, it is called Treating Customers Fairly (TCF) - many people think that means banks giving you whatever you want, but in reality it means treating everyone equally. If you get a rate reduction then it would mean everyone else who took out the same product would be eligible for one when in reality, none of you are eligible. I have no allegiances to Halifax, but they are not in the wrong for declining your request whether or not you agree is another matter but that is just now how banking and finance works. 

Someone once described it as you looking at it from the bottom up, you can see Halifax. Where as Halifax look at it from top down, so all they can see if lots of little dots (their customers)... That goes for pretty much any big business but more so in finance where there is so much regulation. 

getmore4less

Halifax are not a good lender they charge higher rates for smaller mortgage.

Even in Jan a rate over 2.89% look high unless on a horrendously high LTV.
where else did you look?

ericlered7

Were Halifax's rates really that bad in January this year? 2.89% yikes! Have they really dropped from that to 1.64% a drop of 1.25% when the base rate only dropped 0.65% ?

cymruchris

As someone mentioned - work out your payments for the duration of the fixed rate - and then work out your payments if you were on the new lower rate. If the difference between the two is greater than the fee being charged by a significant amount - then it’s worthwhile making the change. If not, best to sit as you are, and enjoy your relatively low fixed rate that many others don’t have access to. There will always be those that get better deals, and those that are worse off than you. Fixed rate is designed to limit your risk of increased mortgage payments, you’ll generally pay a slightly higher rate compared to a standard variable rate deal at the time you took it out, but mortgage rates do go up and down. 

A long time ago they were up in double digits, if the market suddenly went that way you’d be protected for the duration of your fixed rate. Once you understand the products more, and how they work, you can make more informed decisions in the future. Whatever financial product you’re taking out next time - spend a while researching the potential impact of rate increases and decreases before signing up. 👍

getmore4less

ERC would be 3%, £3200 
Sticking with the 3 years and 25y term to get a feel for the savings once the ERC is added.
£106,700 @ 2.89%
£110,200 @ 1.64% 

1	£106,700.00	2.89%	£499.90	£97,575.64
2	£109,900.00	1.64%	£499.90	£97,004.87

£500 is a big enough difference to do the proper calculation with real numbers and dates.

Still think that 2.89% looks wrong for Jan 2020 rates.
What were the details of your mortgage including LTV?

NicLou2020

getmore4less said:

ERC would be 3%, £3200 
Sticking with the 3 years and 25y term to get a feel for the savings once the ERC is added.
£106,700 @ 2.89%
£110,200 @ 1.64% 

1	£106,700.00	2.89%	£499.90	£97,575.64
2	£109,900.00	1.64%	£499.90	£97,004.87

£500 is a big enough difference to do the proper calculation with real numbers and dates.

Still think that 2.89% looks wrong for Jan 2020 rates.
What were the details of your mortgage including LTV?

Thank you for your help. I've checked the letter back in January and I was borrowing £112,408 and my house was worth £172,840. I currently owe £110,641 and have a remaining term of 22 years and 10 months. You are correct that ERC is currently 3%. I'm currently paying £553 per month on the 2.89% and when I check the calculator today on a LTV of 60-75% they are showing 1.57% at £477 per month.
Not sure if this is worth mentioning, but back in Jan when I was refixing my deal, I did look at alternative lenders (online via MSE) and whilst lower rates were available to me, they also came with arrangement fee's. I also had a very 'untimely' mistake made on my credit file by BT who marked my account as AP in error and this had caused my credit score to plumet by 200 points!... after lots of phone calls and complaints (& sleepless nights) I managed to get this removed from my Equifax report and my score subsequently went back up but I was really worried about applying with an alternative lender whilst this was being resolved.
Halifax want the £3200 upfront if I switch to a lower rate with them, which I just don't have as a single parent with one income.
Do you think I should speak to an independent mortgage advisor to see if I can switch lenders and get the £3200 added to my loan but pay it off asap by overpaying? - sorry - I'm just really not sure what to do as I'm really concerned that the rate Halifax have fixed me into wasn't even competitive at the time. Also id there anything I can do about that? - they've said that if I'm unhappy I can contact the Financial Ombudsman.
Finally, I feel extremely angry that a mistake from BT on my credit file made me financially vulnerable at such a pivotal time - do you think there is anything I can do to claim compensation from BT?
Many thanks again for your help and constrtuctive feedback

NicLou2020

ericlered7 said:

Were Halifax's rates really that bad in January this year? 2.89% yikes! Have they really dropped from that to 1.64% a drop of 1.25% when the base rate only dropped 0.65% ?

Hi - yes, in fact the 5 year deal was 2.94%.