From:  whitely525@yahoo.co.uk
Newsgroups: uk.finance
Subject: Re: Fixed or Tracker Mortgage.
Date: Mon, 08 Oct 2007 05:25:25 -0700
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On 7 Oct, 16:43, John Boyle  wrote:
> In message <1191760347.663073.281...@50g2000hsm.googlegroups.com>,
> whitely...@yahoo.co.uk writes
>
> >But you don't really know until the fixed rate is over.  Only then do
> >you know if your gamble has paid off
>
> Thats where you misunderstand. You dont 'take a gamble' with a fixed
> rate.

It is not misunderstanding.  Fixed rate deal is a more complex
financial instrument for those who think they can call interest rates
better than the market maker.

Ever notice how 20 year fixes are almost unheard of in the UK
market..?  Gambling on short term interest rates is one thing, but
people are much less confident about calling interest rates in the
longer term.

> >because you know what happened to
> >interest rates
>
> No, you dont take a fixed rate to gamble on getting the cheapest deal,
> you do it so as to be sure of your payments.

I think the million + people currently coming off fixed rate deals may
take a different view..!

> >and you also know what new fixed rate deals are
> >available
>
> Irrelevant. You could just switch to variable.

Yes.. some people can see the error of their ways, especially if they
found they gambled in the wrong direction.

> >(and you should know how much it will cost you to switch).
>
> That risk can apply to any switch which may take place, i.e. when your
> tracker suddenly looks expensive when compared to current offers.

Flexible mortgage with lifetime tracking BoEBR by a reasonable margin
- I think you are never going to get much better than that.  The only
way you can get better is by gambling you can buck the market (over
the lifetime of the mortgage).

Of course it could be that over the lifetime of the mortgage you can
come out on top by taking this gamble.  But you will never know until
the end of the mortgage.  That is why I say that you really want to
know where you are, get a good tracker..


> --
> John Boyle