JEFF PRESTRIGE: Now is the time to fix the variable rate mortgage


JEFF PRESTRIGE: Despite rates being maintained, for those two million homeowners who have variable rate mortgages, now is the time to pay off

So after all the speculation and all the straw polls suggesting a hike was on the cards, interest rates remain at 0.1 percent for now.

Good news for homeowners with a variable rate rather than a fixed rate mortgage. Bad news for savers who will continue to earn the equivalent of a few peanuts with the money they have spent in their local construction company. Peanuts are quietly ravaged by inflation.

While savers may receive a little bit of encouragement before Christmas next month when the Bank of England’s Monetary Policy Committee takes another decision on interest rates, I wouldn’t bet on it.

Ups and Downs: The Case for Fixing Your Mortgage Rate Remains Convincing

While the base rate may well increase in four weeks, that doesn’t automatically mean savers will benefit. Banks – and to a lesser extent mortgage lenders – are notoriously parsimonious when it comes to passing the benefits of any rate hike on to savers.

Some won’t, while others will delay until New Years – and then pass on only a fraction of any increase. On the homeowner side, the cost of new loans (especially fixed rate transactions) has increased in anticipation of a rate hike. I doubt lenders will now reverse these increases in light of the Monetary Policy Committee’s decision to keep it as it is.

Yet the case for fixing your mortgage rate remains compelling. For those two million homeowners with adjustable rate mortgages, now is the time to fix the problem.

A decent society must take care of its elderly

The House of Commons has barely covered itself in glory in recent days. But it has a chance of redeeming itself in just over a week when MPs consider a Lords amendment on the government’s controversial decision to suspend the ‘triple lockdown’ guarantee on state pension increases.

A suspension which means that the state pension will increase by 3.1% from next April – and not the 8.3% it could have increased if the wage link had been maintained.

Swashbuckler Baroness Ros Altmann led the Lords’ campaign against the breaking of the triple lock. Cleverly, she’s not arguing for the full 8.3% increase to be applied. Instead, she wants an increase that takes into account the threat of rising inflation (five percent or even more) that will weigh on the household finances of many retirees next year.

Altmann says that a decent society should take care of its elderly. She also thinks it odious that retirees are being cheated to fund reductions in alcohol taxes and taxes paid by the country’s banks. Many readers will agree with her. It’s hard not to.

Redmayne Bentley makes it MORE difficult for customers to vote at AGMs

How disappointing to learn from a reader that stockbroker Redmayne Bentley is going against the crowd by making it MORE difficult for its clients to vote at general meetings. Deprive them of their rights to engage with the companies in which they own shares – rather than hold them accountable.

In an email to clients, Redmayne says he will no longer alert clients of upcoming AGMs and shareholder votes (for example, on key issues such as a takeover or rights issue) so that they can participate.

Instead, those who want to get more involved in the companies they invest in will now have to do most of the donkey work themselves, knowing when AGMs are held or key shareholder votes take place. They will then need to email Redmayne the details of their voting instructions, which will then be forwarded to the “parties concerned to organize.”

What a step backwards, especially given the imaginative decision by Interactive Investor last week (revealed exclusively in Wealth) to automatically enroll all investors in its voting service. This now means that Interactive customers will receive details of upcoming votes and can then vote with the push of a button.

Redmayne prides herself on having provided personal investment expertise since 1875. But in this case, she is horribly out of touch and should – urgently – reconsider her decision to make life more difficult for investors who wish to take a decision. interest in companies in which they have a stake.

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