If it makes you feel any better I don't think anyone in the US, including Warren Buffett himself, could get an interest rate like that today.

MR ALTO AND I HAD A FIXED RATE MORTGAGE AT 4.97 PERCENT WHICH WAS DUE TO END AT THE END OF THE YEAR.

End? As in be paid off? Or do you mean you have an ARM, which was adjusting at the end of the year? I'm pretty sure you mean the latter, but they're two different things.

Unfortunately, that's the game you play with adjustable rates. Is there a reason you're not going for a fixed rate? I'm not familiar with lending practices in the UK, but if you're going to be in house for the foreseeable future, a fixed rate today is likely lower than whatever your adjustable is going to become in five years.

Eid, it was our 2-year fix that was ending (first 2 years of a 25 year mortgage).We did opt for a new fixed rate (here, you fix for 2, 3, 5, 10 or 25 years), and we did so just before the Bank of England slashed interest rates by 1.5 percent to 3 percent. So the adjustable rate (variable rate) is now cheaper than our fix.

kellydamnit puts it in perspective, though- these are good rates on a global scale, and I suspect (hope) the very low rates won't last too long.

Yes, you have to look at the rate over the life of the loan. I find it interesting, though, that you have a completely different adjustment schedule over there. Here, you fix for five years (let's say) and then your rate adjusts annually thereafter until it's paid off. Do you get to pick the amortization schedule? Here, it's usually 15 or 30 years for a fixed rate loan, or 30 years for most ARMs. When you re-fix the loan, do you adjust the payoff date, or is it still going to be paid off after the same number of years?

In the UK fixed rates are usually for anything between the first 1-5 years of the loan (which, typically, would be for 20 or 25 years) although some lenders do offer fixed rates for longer periods (Nationwide, for example, offer 25-year fixed rate loans or at least they did until this latest crunch).

At the end of the fixed term, the loan reverts to SVR (Standard Variable Rate), so borrowers either have to pay that (and if rates have dropped since they fixed, then they might be better off at SVR until rates start to rise again) or they can fix again for another few years.

I fixed my loan 7 years ago when I bought out my ex-husband, for five years, and then again 2 years ago for another five. For me a fixed rate is essential, because I have only my salary, and so I need to know exactly how much I'll be spending on the mortgage each month. It's a chance you take as to whether or not interests rates will rise or fall once you've fixed.

Right, but what's the amortization schedule? How long does it take to pay the average UK mortgage off? And does that date reset when you re-lock the rate?

Usually the loan is for 25 years with the lender. You can fix the rate for the first few years, as said above. Then at the end of that fixed-rate period you're free to remortgage with a new lender, either over a new 20 or 25 year term or for a shorter term, or just for the remainder of the existing term.

When I remortgaged to buy out my ex, I did it over 23 years. At the end of the 5 years, I fixed again (with a new lender at a better rate) for 17 years. When my current fixed rate comes to an end (in 2011) I'll fix again but for 12 years. So I'll be seeing a light at the end of the tunnel in terms of paying off the loan.

Some people overstretch themselves at the outset and so when their fixed rate period is up, they'll fix again for another few years at the lowest rate they ca find, but with a new 25-year term, and then do the same thing again in a few years time when that fixed rate period is at an end. That's bad planning, because it means they never pay the loan down.

And a lot of people have interest-only mortgages where they're supposed to have some kind of investment plan running alongside, which is designed to pay off the capital at the end (and, if it's performed well, also give them a bonus) but if people are overstretched and overcommitting at the outset, they'll take on the biggest interest-only mortgage they can afford at the lowest fixed rate for a short period, in the hope that they can fix again at the end. But the credit crunch put an end to a ton of low fixed-rate loans, which meant that a lot of people found themselves with unaffordable loans.