Using Spreadbet to hedge mortgage rate risk

[Nordtrader]

Hello all,
Have never traded interest rate / money market products so forgive my ignorance. I recently took on a new mortgage and would like to hedge against rises in ECB rates over the next few years. The standard payment protection insurance offered by my lender seems very expensive so I had the idea that maybe I could setup the equivalent protection / hedge by doing a spreadbet on a related interest rate contract. Any ideas / advice from interest rate / MM experts out there? Is this a barmy idea?
Thanks,
NT

 

[pboyles]

It would be madness to do it with spreadbetting, the charges they will apply over a lengthy period will cost you a fortune.

 

[Nordtrader]

It would be madness to do it with spreadbetting, the charges they will apply over a lengthy period will cost you a fortune.

OK, the spreads must be wider than in forex. Will have a closer look - thanks!

 

[pboyles]

You would have to place a large bet, think about how much they will bill each day for their swop/financing charge and how many days you will be holding it for. You also have to think about how much margin you need to cover drawdowns etc. Thats before they start to screw you with slippage and widened spreads.

 

[MrGecko]

this has been covered before, try searching.