Gary Jones says:
May 19 2021 at 3:37 pm
Hi PSR, if the floating rate they have put you on isn’t better than the fixed rate your previous arrangement was, given that it was taken out in 2006 when base rates were 4.5 to 5%, you need to go and complain.

Unless they are quoting the most expensive floating rate mortgage in Britain ?

Reply
Pilgrim Slight Return says:
May 19 2021 at 4:26 pm
Our fixed rate for 15 years was 2.29%.

Their floating rate is going to be 3.59% and I’m writing a really pissed off letter right this minute. We do actually complete the mortgage this December.

15 year, fixed rate, at 2.29%, in 2006?

I guess it’s possible but seems unlikely.

But OK, if it were done then how were it done?

The risk of rates rising was laid off into the interest rates futures markets. You know, those speculative markets that produce no real output or benefit as PST and the P³ would insist.

Someone, somewhere, has to take the risk of interest rates changing over the term of a fixed rate mortgage. Probably better to dump it on those who actively desire to speculate in risk, no?

14 thoughts on “Rilly?”

  1. He’s complaining about what works out to be 0.758% extra interest on half the balance he currently owes.

    I wonder what the floating rate was back in 2006 and whether this wasn’t all explained to him at the time he took the mortgage out.

    This ‘seriously pisses’ him off. And he’s going to write a letter about it.

    What a twat.

  2. I call BS. According to the BoE data (here:https://www.bankofengland.co.uk/boeapps/database/FromShowColumns.asp?Travel=NIxAZxI3x&FromCategoryList=Yes&NewMeaningId=FR5Y75,RFRM5Y&CategId=6&HighlightCatValueDisplay=Fixed%20rate%20mortgage,%205%20year) 5 year fixed rates in 2006 bottomed at 4.96% in March, and could have been as high as 5.6% after August.

    I wouldn’t be surprised if he was actually quoted 2.29% fixed over base in 2006, and he was (is) so dim he thought that was 2.29% in total. If so he’s been paying 7%+ for the last 15 years when rates have been virtually zero for most of that time.

  3. Assuming PST rather than Jim is correct, which I wouldn’t bank on, PST is complaining about additional interest of perhaps 50 to 100 pounds in total. Maybe Nationwide have some sort of minimum to allow for Admin.

    Jim’s point does ring true though.

  4. Tim’s point is a good one. The risible PSR (along with Muprhy and his camp followers) berates the evil financial industry for producing nothing of value, but is quite happy to benefit from a mechanism for his interest rate to be fixed, even if the dim [email protected] has paid hugely over the odds for his peace of mind.

    I believe PSR works as an adviser in “social housing”. Let’s hope the advice does not extend to finance.

    Would have been lovely if PSR had a foreign currency mortgage and the pound had tanked (due to far right Brexit voters).

  5. I agree with Jim. 2.29% in 2006 is too good to be true.

    Strange he didn’t try and renegotiate in say 2009 but perhaps there were large penalties.

    Also strange only 7 months left after a 15 year mortgage unless he has been repaying capital (although I thought you couldn’t do this with fixed rate mortgages?)

    Story doesn’t really add up.

  6. “luckily a former member of the Board at Nationwide has stepped in to help……”

    Not sure what the NKVD dept in Nationwide BS does tho………

  7. Andrew

    That’s an astonishing breach of the Murphy comments firewall! What an ignorant tool the man is.

    Well done to you or whoever it was – priceless!

  8. @BraveFart

    I wish I could claim credit. I add my congratulations to the author.

    I can only assume that Nationwide bought out NKVD Solicitors and are using them in-house.

  9. Bloke in North Korea (Germany province)

    Will there come a point when crashing bitcoin would ruin China, or at least the bits of it that are mining stuff to help mine the stuff?

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