Mortgage Rate Rises

413x said:
Just because things are unfair doesn't mean it isn't a good idea to make a changes.

Just a bit more flexibility would help a lot. Longer term mortgage fixes are a thing in other countries for example.

Banning of ercs being different between lenders. (I remember one person on here who had a 3pc etc through the entire term!)
Never once did my broker tell me about ercs. Was luck. I got one with a 3,2,1 sliding scale!
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You have always been able to get 10 or 15 year fixes
Most times brokers will not show them as they already gauged from your answers to questions they wouldn't be for you

Lifetime mortgages are also a bit problematic for many so whilst personally I think long term fixes are good, beyond 10 or 15 years I think the risks probably outweigh the benefits.
(risks being ERC primarily, but lack of flexibility on switching etc being another)

A 15 year fix on a 25 year term you are down to around 55% remaining mortgage for example, so should be able to pick up the best rates at that point.
Your also, or should be, significantly less leveraged than when you started out.
 
413x said:
Just because things are unfair doesn't mean it isn't a good idea to make a changes.

Just a bit more flexibility would help a lot. Longer term mortgage fixes are a thing in other countries for example.

Banning of ercs being different between lenders. (I remember one person on here who had a 3pc etc through the entire term!)
Never once did my broker tell me about ercs. Was luck. I got one with a 3,2,1 sliding scale!
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Thats nice but what about the people who would be on a 30 year fix at 4% when everyone else enjoys a decade+ of 2%?

The whole idea with mortgages is that you pick the one that suits your circumstances. I think we could have got a 10 year when we fixed which is plenty long enough for the vast majority of people. We could have got one with no ERC, we could have got one with interest only or repayment, we could have got one with a higher yearly limit on overpayment etc.

When people don't take the time to dig into something like a mortgage to find out if its the best thing for them then I despair. Its hundreds of thousands of pounds for christs sake.

There is plenty of flexibility in existing mortgages. The only thing I think they really should change is the way they try to confuse people with fees. Plenty of people can't/don't make the effort to work out the difference between a 2 year with fee X and a 5 year with fee Y etc. Its 100% designed to confuse customers. There should really be 0 fee involved in going direct to a mortgage provider and any costs they incur should be taken into the interest rate they charge on the fix.
 
fredwi said:
He should be it’s not our fault we’re all getting shafted currently
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_Jimlad_ said:
it might not be our fault, but we all got comfy with 1% interest rates for far to long, there was only ever going to be one direction that they would go in.
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I have been paying the same 5.5% I was when I took it out in 2008.

I have boe base rate + .5% tracker.
 
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fez said:
Thats nice but what about the people who would be on a 30 year fix at 4% when everyone else enjoys a decade+ of 2%?

The whole idea with mortgages is that you pick the one that suits your circumstances. I think we could have got a 10 year when we fixed which is plenty long enough for the vast majority of people. We could have got one with no ERC, we could have got one with interest only or repayment, we could have got one with a higher yearly limit on overpayment etc.

When people don't take the time to dig into something like a mortgage to find out if its the best thing for them then I despair. Its hundreds of thousands of pounds for christs sake.

There is plenty of flexibility in existing mortgages. The only thing I think they really should change is the way they try to confuse people with fees. Plenty of people can't/don't make the effort to work out the difference between a 2 year with fee X and a 5 year with fee Y etc. Its 100% designed to confuse customers. There should really be 0 fee involved in going direct to a mortgage provider and any costs they incur should be taken into the interest rate they charge on the fix.
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I don't think the brokers are very good myself.
I used l&c who came highly regarded. All they seemed to do (in hindsight) was pick the best one on a price comparison website. I never got a whiff of a 15 Yr.

But really there wasn't much help except 'this is the best rate'

Never even knew what an erc was until looking to get out of the previous one. Parents never said about it, broker didn't. No one. Maybe it's because rates were stable for so long it wasn't worth considering? I don't know. But point is I am quite financially savvy but wasn't until I went through it I learnt the bulk.

Standardised ercs, more education easier rules taking mortgages to new properties, less brutal svr would all be a few things that could help a lot.
 
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The other consideration is that other things were different as well.
Comparing years is very difficult to really do, its always easy to look at the part of the data set that suits.

Eg when I first purchased, the tax threshold was much lower, and the basic rate was 25%.
When I started work a few years earlier iirc it was 27% for the basic rate.

See for comparable rates. https://graphwise.weebly.com/income-tax.html

Dont get me wrong, I am not saying that purchasing a house is easy now. In my living memory and with the conversations I had with my grandparents, its never been easy for normal people to buy and get on the property ladder.
Maybe easier, (and I would certainly take lower prices and higher interest rates over higher prices and low interest rates), but not easy.
 
Chris Wilson said:
Mortgage selection should be taught in schools instead of a lot of the junk they find time to mull over. Loans and general banking, too.
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I highly disagree.

The problem with much education is that it is hard to keep up with trends.

When I left school the trend was for endowment backed mortgages, most people took these.
The school would in that scenario have been pushed to really only push this angle with maybe a minor link to the at the time "outdated" fixed rate.
I remember being told by oh so many people I was mad when I took out a fixed rate repayment mortgage, they were all telling me how in 25 years or so they would be paying off their mortgage a buying a new car with the exess.
We all know now how that played out.

Then there was the fad of interest only, for domestic properties and no legislation to ensure people were going to be able to pay it back.
I remember a broker angling to me one of these, and I said to him, I am zero on the risk scale for my main house, I want a long term fix, heres the 15 year I am going to take out with Britannia, can you beat that.
he asked me as I was part of the inheritance generation why that was my mind set.

We also had trackers, which suited some, but again were a risk for many.

Now we are back to the staple, repayments, often fixed.

You also had from memory, significant changes to product fees.
I remember my first mortgage have to pay a one off fee as my mortgage was above iirc 80%. It was some sort of insurance in effect for the mortgage lender. I forget the term now but it was industry standard and something like 1% of the amount over 80% of house valuation being mortgaged.
It was more than my solicitors bill I remember.
All this stuff changes. Its another reason why people comparing simple figures from year x to y doesn't really make for fair comparison.
 
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Mercenary Keyboard Warrior said:
I highly disagree.

The problem with much education is that it is hard to keep up with trends.

When I left school the trend was for endowment backed mortgages, most people took these.
The school would in that scenario have been pushed to really only push this angle with maybe a minor link to the at the time "outdated" fixed rate.
I remember being told by oh so many people I was mad when I took out a fixed rate repayment mortgage, they were all telling me how in 25 years or so they would be paying off their mortgage a buying a new car with the exess.
We all know now how that played out.

Then there was the fad of interest only, for domestic properties and no legislation to ensure people were going to be able to pay it back.
I remember a broker angling to me one of these, and I said to him, I am zero on the risk scale for my main house, I want a long term fix, heres the 15 year I am going to take out with Britannia, can you beat that.
he asked me as I was part of the inheritance generation why that was my mind set.

We also had trackers, which suited some, but again were a risk for many.

Now we are back to the staple, repayments, often fixed.

You also had from memory, significant changes to product fees.
I remember my first mortgage have to pay a one off fee as my mortgage was above iirc 80%. It was some sort of insurance in effect for the mortgage lender. I forget the term now but it was industry standard and something like 1% of the amount over 80% of house valuation being mortgaged.
It was more than my solicitors bill I remember.
All this stuff changes. Its another reason why people comparing simple figures from year x to y doesn't really make for fair comparison.
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They should teach the pros and cons of all the variants.
 
kona786 said:
If that were to be the case the banks would be out of business.

Keep the genpop dumb AF. That's how they like it.
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No doesnt work like that.

What happens is the financially savvy can get the best deals and the ones less so take the worse deals.

It partly annoys me since being being finacially savy comes with the turf for me as an accountant.
I dont get to build myself a cheap extension, do some on the side programmig etc that others get to boost their income.
The bit I am good at is finances, all the "protections" that keep getting applied to narrow the gap end up costing me more.
Changes such as to insurance rules means the bottom moves up.
 
Chris Wilson said:
They should teach the pros and cons of all the variants.
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You can't, its constantly changing.

Would you teach MIRAS now, even though its been what 20 years since it existed.
You could skip it, then in a years time the government introduce an equivalent to help with cost of living.

Basically impossible to teach the subject of finances as a one off fixed in time thing. The industry evolves constantly.
 
The education system (like the NHS) is not fit for purpose. It's not really changed in decades.

They absolutely should teach the basics of household finances. Not to the extent they go through all the mortgage options, but an understanding of interest rates, ERCs, fixed, variable, repayment, interest-only etc etc with the pros and cons would be invaluable. The rest can be found through a mortgage broker.

I'd add on loans, credit cards, car finance such as leases and pcp, ccjs, bankruptcy risks
 
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TheOracle said:
The education system (like the NHS) is not fit for purpose. It's not really changed in decades.

They absolutely should teach the basics of household finances. Not to the extent they go through all the mortgage options, but an understanding of interest rates, ERCs, fixed, variable, repayment, interest-only etc etc with the pros and cons would be invaluable. The rest can be found through a mortgage broker.

I'd add on loans, credit cards, car finance such as leases and pcp, ccjs, bankruptcy risks
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Reminds me when we were learning GCSE Maths and all the kids would protest they'd never need this knowledge. I imagine talking about house buying will trigger an even more vocal response lol!
 
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