Jan 18

Mortgages are weird

General

In the old days, if you had a mortgage that was fixed rate for 2 years, you’d fully expect to be tied in for 3 or 4 years so that the bank got to charge you a variable rate for a bit and recoup some of the money it threw away on you in the first two.

Nowadays the tie in is the same length of time as the fixed rate. So the interpretation is “you can have this cheap mortgage as long as you change it after 2 years”. Bizarre. It means the cost for comparison is rendered useless once again because you never for the rest of your days have to pay the underlying variable rate. Double Bizarre.