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 ?
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?