Fixed rate 10yr mortgage 6.59%

A question about : Fixed rate 10yr mortgage 6.59%

Yep, that's correct and let's get it out of the way, I now know it wasn't the best decision I ever made. However we signed up around 6yrs ago (looking like conservatives coming into power = presumed high interest rates) and having a family I wanted to have a balanced payment each month.

Short story short, I then suffered a pay freeze, conservatives got in and everything went up in price bar interest rates, which went down quicker than a Chelsea striker. ( unless your a helpful Chelsea fan and then of course I meant Man Utd :-)

Now with four years left, we still have a Ј5400 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 Ј5400???? (Because you signed up to it would not be a useful answer right now).

I was wondering if there is any precedent set around mis-selling or whether or not any of you think there is anything we could possibly do in this scenario. I have no issues with paying something I signed up for (I obviously do), but I do think there should be some room for manoeuvre.

The mortgage advisors were clearly poor at advising, but I just don't have a clue on where I would start with this one.

Any assistance at all would be greatly appreciated, especially if you are a Halifax CEO who is feeling generous :-D

Best answers:

• Halifax are not making a 'fortune' out of you - they will have borrowed a sum of money to pay for your house outright (minus your deposit) at whatever the prevailing interest rates were at the time you took out your mortgage.
  However in your particular case it sounds like it would be worthwhile just paying the Ј5400 depending on the size of your loan and potential benefits. You are stuck on a very high fix for another 4 years - you can remortgage now for half that amount so you could potentially save a lot more than the Ј5400 penalty you will have to pay.
  Quote:
• Do the sums - depending on your LTV I am sure you could save a packet on paying the ETC and moving to a better rate.
  Unless you have a complaint better than "the interest rate went down and we secured at a higher rate" then you're wasting your time looking at the missale angle.
• To be fair to mortgage advisors, they only advise, the people engaging them make the decisions. If you told them you wanted a long term fixed rate mortgage then that's what they would have looked to get you.
• The bank of england set interest rates not the conservatives and as explained above Halifax make a margin based on what you borrowed at the time, regardless of what happened to rates after that.
  You wouldn't for example expect them to come after you for more money if rates had gone up to 15%.
• You have what you wanted - security of payment.
  You were not seeking the lowest rates with the highest risks.
• 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.
  No one can advise you what will happen with interests rates as no one actually knows.
  You can't now claim you were missold given you knew exactly what you were doing at the time.
  If interests rates had gone up to 15% would you be insisting you were missold what would be a lower rate then?
• 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.
• 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)
• 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
• 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.