Hi All,

Can someone offer advice. I'm not clued up on mortgages so have got a IFA. He has advised me to go for the Nationwide Tracker at 1.18% above BOE Base rate. The paperwork has started so I will still get this deal have been told offer letter in post. The only problem with this is it has a collar 3.93%. I understand we wouldn't benefit from another drop.

After yesterdays interest drop, My father in law has told us we have gone wrong again and need a mortgage without a collar. I am now wondering if we should wait and see what the banks are doing.

Our fixed rate deal ran out on the 2nd November so want to sort something out, my father in law has now made me feel stupid.

Only after advice, but have I been stupid and should I wait another month.

Even with a collar, you have a great rate and something that many would be jealous about!

If you looked around now for something better - you won't find anything. There are no trackers, and when they do reappear, they won't be at 1.18% above base!

In hindsight, yes, you could have got a rate without a collar, but would the margin have been so good, would the fee have been comparable and hindsight is a marvellous thing!

Dont feel stupid, I wish I had your rate!

If I read your post right, if rates fell a further 0.25% you would still benefit but that would be it. I don't think you should wait - I think this is a great deal and I doubt there are many mortgages out there without a collar - go for it and don't listen to your father in law!!

Thank you BOO1234567, I was kind of hoping for that advice. You did read it right, its just a bit confusing for me as I was always on a fixed rate before so never really worried about things.

I know no one can predict the future interest drops/ increase, but father in law thinks he can and has put doubts in my head. He seems to think rates will drop to 1% or lower in the next 2 years.

Thanks again.

Thanks Integra, you have all made me feel better.

Lloyds charged me £99 for administration when I enquired about a fixed rate deal 4.99%, and also wanted to charge me £2000 for doing it, the morgagte is for £83000.

I never really understood what was happening but I can't help but thing he never explained things to us very well. And I've now losted the £99.

Glad I found a FA who has been great and explained everything. Its just my father in law confusing matters again.

Father - in -laws have a tendancy to be like that - you just have to bite your tongue and agree with him! lol

Have done for the last 8 years. Its getting a bit sore now! LOL

I think theres a different forum for father in laws........

Penz, I'm in the business, and my father in law still thinks he knows best about my mortgage, so I certainly feel sorry for you!

There are rumnours that the base rate will drop lower over the next 6 months, but there is no certainty it will stay that low.

As I said before, I would be happy with your rate, collar or not. When you were looking for the rate, you probably dismissed alternatives (that had no collars) for various reasons - higher margins or costs for instance, andI am sure your Father in Law would have done the same. They love hindsight, giving advice and being right ... especially with other people's problems!

As you say, perhaps there should be a forum dedicated to In Laws!

To be honest I only just found out what a collar was! I now only wished I left the term of the mortgage alone. We were advised by Father in Law to increase back to 25 years instead of 20 to keep monthly payments down. His son agreed so I had to agree.

I wouldnt worry too much about that - you can always switch the term back at a later stage - when you are earning more / can afford more.

Nationwidse accept overpayments of up to £500 per month, so you can effectively reduce the term by increasing your monthly payments, in the knowledge that you could always reduce them back down when you need the money for other things.

Hi,

Just been caught out myself with Halifax tracker mortgage, which has a collar at 3% and therefore any further cuts may not be passed on, my min is therefore 3.79%. Which does look great but not so great if mortgages reach 1% or lower!

Really peed off for several reasons:

1) I had the choice of an Abbey tracker with identical terms except that it cost a bit more to set up.

2) If the IFA I used had made me aware of the collar I would have gone for the Abbey mortgage.

3) If the KFI (Key Facts Illustration) had included this detail I again would have gone for the Abbey mortgage.

With this Halifax mortgage the change to the terms is discretionary so they may not hold the collar rate. What are the chances of that if they can get more money out of you?!!

But what they do have to do(Halifax) is if this collar rate is breached by the BOE base rate and they then change your terms, they have to give you the opportunity to remortgage onto a different product without penalty. Check out if this is the same with your product.

Also, double check where the collar applies on your mortgage, to the BOE base rate or the total rate you are paying i.e. if it applies to BOE base rate then your rate will actually be 3.93% + 1.18% = 5.11% as a minimum.

I am going to pursue this with the Ombudsman, the whole point of the KFI is that you should clearly understand what you will be paying over the term of the mortgage. It's important because if you were using savings/investment interest to pay some of your mortgage that will track lower but you mortgage doesn't.

The reason your FIL knows about this is becasue it has been on the radio and in the newspapers recently because these collars are now being triggered, and when the terms and conditions were originally drafted nobody probably thought they would be invoked. Ask the smarty pants who his mortgage is with and if he has a collar, this may be why he knows!

I shall also be writing to the chancellor to see if this is acceptable practice for a governement owned organisation. They really do not know what they have let themselves in for!

FIL has already paid mortgage so hes quite smug on that.

My illustration says:

Mortgage lender

Nationwide Building Society

Mortgage product

2 Year Tracker plus 1.18% Option A Remortgage less than 60% (Using Nationwide Solicitors)

Interest rate type and interest

A variable rate which is 1.18% above the Bank of England Base Rate, currently 4.50% for 2 Years, to give a current rate payable of 5.68% which will not go below a floor of 3.93%

Nationwide Building Society's Variable rate, currently 6.49% thereafter The tracker rate will be increased/decreased within 30 days of any increase/decrease in the rate set by the Bank of England.

Restrictions on this mortgage

No restrictions apply

7. Are you comfortable with the risks?

What if interest rates go up? Your mortgage payments are collared which means that although the interest

What if interest rates go up? Your mortgage payments are collared which means that although the interest

rate may fluctuate, it cannot fall below a floor of 3.93% until this period ends. This means a minimum

payment of £*****. After this period any interest rate increases will be added to the reverting variable rate.

The monthly payments shown in this illustration could be considerably different if interest rates change. For

example for one percentage point increase in Bank of England base rate, your monthly payment will

increase by around £*****.

I don't know what you can read from this. I hope it means it will come down to 3.93%.

Penz.............You have stated u have seen an IFA, u've gone to yr father in law, u've asked on here & now yr posting war & peace!

What is the point of seeing an IFA who is qualified, regulated and can be sued if he gives you the wrong advice I am presuming you have met this advisor face to face

This is a general discussion forum with people from all walks of life, who maybe in the day are lecturers, electricians, cleaners etc & they have a DIY interest in mortgages (not knocking it) and give opinion NOT ADVICE. BUT rather than discuss with advisor you print war & peace on here!! This is beyond my comprenhension!

I apologise Affinity if I have caused you annoyance. Its my lack of knowledge that has brought me to this site. I am very happy with my IFA who has talked me through most things and I was and still am very happy with the service he has provided me. It was more the interferrance from my FIL which caused me to doubt the IFA, and we never went to him he just steps in all the time.

I don't understand why you believe I have posted war and peace. I was more than happy with the comments I recieved from BOO1234567 and Integra. I was replying to the last message from Fillip66 as I hoped I understood the illustration correct about the collar being 3.93% not 5.11% without phoning my IFA again.