Announcement

Collapse
No announcement yet.

Lack of interest

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Lack of interest

    Apparently the Bank Of England's official interest rate has been cut to 3%, which is the lowest it's ever been in my lifetime.

    #2
    Lack of interest

    It's probably lower than most people on here, 53 years apparrently.

    Just you watch the banks rush to drop their mortgage rates now... best bring some food and drink and a comfy cushion though if you're waiting.

    Comment


      #3
      Lack of interest

      I am on a tracker so i should get the rate cut.
      The way the rate is tumbling, i am hoping i can stay in employment and pay off my house before my 40th Birthday.

      Comment


        #4
        Lack of interest

        We went for a fixed rate mortgage last year, so still have 3 1/2 years to go, but I'm cool with that, we knew that rates can go up as well as down and decided to stick at a rate we knew we could afford and take the risk we might end up paying more in the long run if this happened. though I didn't expect quite this dramatic a drop I'll admit.

        Comment


          #5
          Lack of interest

          We signed up for a lifetime tracker last year, 0.34% above base. Only because I was sick of being hauled in every 2 or 3 years to have the Nationwide try and sell us their expensive and unnecessary insurance policies.

          So in hindsight, thank you to the Nationwide salepeople.

          Comment


            #6
            Lack of interest

            Wasn't it artificially low interest rates that fueled the ridiculous house price mega-inflation and consumer debt bubble?
            So what we're saying is "oh my god, the petrol tank's on fire! Quick, pour some petrol on it!"

            Comment


              #7
              Lack of interest

              ECB has dropped by 0.5% to 3.25%. I'm on a variable mortgage so I'm not sure if they will pass on the full amount to me.

              What are the wider implications of the rate cut? Is it to encourage banks to resume lending?

              Comment


                #8
                Lack of interest

                What are the wider implications of the rate cut? Is it to encourage banks to resume lending?
                Basically yes. I presume it's also supposed to send a signal that they (ECB, BoE) are much more worried about a recession than inflation, and are willing to act "decisively" to ameliorate it, so don't expect any rate rises for the foreseeable future. Hence the scale of the rate cut. There's a widely held belief that one large cut is better for "reassuring the market" than several smaller ones, although I'm far from convinced the benefits outweight the costs. What's interesting is that the Fed has long subscribed to the theory, but the Bank has been much less keen and the ECB not at all. They must be scared shitless.

                Comment


                  #9
                  Lack of interest

                  I signed for a 5-year, base rate plus 0.5%, tracker, just four months ago, when that rate was 5.75% (the base rate was 5.25% at the time). The alternative was a 5-year fixed at 6.75%.

                  It's the only financial gamble I've ever made that's paid off so handsomely (I was brought up with my Dad's mantra of "if you can afford the fixed rate deal, take it, at least you won't be in for any nasty shocks").

                  My monthly mortgage repayments have just dropped from over £1,000 a month to just less than £800. A bit like TG, if I can recycle the difference into paying off the capital element early, I'll knock almost a quarter of my (originally 20-year) mortgage off in the next 3 years.

                  Comment


                    #10
                    Lack of interest

                    I don't have a mortgage and debt but savings, I'm ever so happy...

                    Comment


                      #11
                      Lack of interest

                      Well you shouldn't be. You've just had 1.5% lopped off your savings rates. With 5%+ inflation and 3% base rates, as long as you can pay, you're better off being in debt.

                      Comment


                        #12
                        Lack of interest

                        I've got plenty of money and I'm confident that when I go to the bank tomorrow, I'll be financially sorted for the next few years. I better call my chum, Dave. That getaway car won't drive itself, you know.

                        Comment


                          #13
                          Lack of interest

                          Barclays have yet to drop thier tracker rate, the b*stards.

                          Comment


                            #14
                            Lack of interest

                            Speculation in the papers and on the news here that the ECB will drop it's rate by 0.5% next month and will reduce it down to 2% or less. Are we heading for very low inflation or possibly deflation?

                            Comment


                              #15
                              Lack of interest

                              So is it just a question of when mortgage lenders drop their rates, or might they never do it?

                              (My mortgage runs out in April. I was going to start looking for new deals this month, but perhaps it's not worth the effort?)

                              Comment


                                #16
                                Lack of interest

                                Depends what your early redemption penalties are, if any. All rates are likely to drop from where they are now over the next six months, but whether that stays a permanent thing or not is anyone's guess.

                                An early redemption penalty of 1% of the total value of your outstanding mortgage, is of course 12 times the monthly value of an apparent 1% annual interest rate cut - and you'll have to pay it in one hit - so be careful in comparing offers.

                                Comment


                                  #17
                                  Lack of interest

                                  The best estimate is that the 1.5% cut in the Base Rate might translate into a 05.-0.75% cut in mortgage lenders' variable rates, as inter-bank borrowing rates are still very high.

                                  Comment


                                    #18
                                    Lack of interest

                                    If you have a mortgage with one of the bail-out banks, a rate cut for you would be interesting.

                                    From what I heard on the radio last night, the banks are borrowing that money at around 8%. They can't exactly make a profit if they then lend it back out at 3.5 - 4%

                                    And we need them to make a profit so someone else takes them off our hands.

                                    So they're damned if they do cut and damned if they don't cut.

                                    Comment


                                      #19
                                      Lack of interest

                                      I've sort of assumed that none of the interest rate cuts since Lehman Bros. went tits-up were expected to be passed on to consumers. They were designed by central banks not to stimulate more lending but to increase retail banks' lending margins so that they can re-capitalize quickly.

                                      Am I wrong about this?

                                      Comment


                                        #20
                                        Lack of interest

                                        Depends what your early redemption penalties are, if any. All rates are likely to drop from where they are now over the next six months, but whether that stays a permanent thing or not is anyone's guess.

                                        An early redemption penalty of 1% of the total value of your outstanding mortgage, is of course 12 times the monthly value of an apparent 1% annual interest rate cut - and you'll have to pay it in one hit - so be careful in comparing offers.
                                        Oh, sorry, I didn't mean I was planning on paying the redemption fee. I just meant I was going to see what the lie of the land was.

                                        Comment


                                          #21
                                          Lack of interest

                                          The Irish banks fell over themselves yesterday to say that they were passing on the cuts. Apart from the one I'm with that is.

                                          Comment


                                            #22
                                            Lack of interest

                                            And we need them to make a profit so someone else takes them off our hands.
                                            What about if they made a profit for us? And we kept it.

                                            Comment


                                              #23
                                              Lack of interest

                                              It seems to me that the record in OECD countries of governments owning commercial banks does not contain a whole lot of examples of these institutions making profits and returning them to the treasury.

                                              It does, however, have a pretty serious record of offering opportunities for corruption (see French banks acting as conduits for all sorts of illegal stuff under Mitterand).

                                              Comment


                                                #24
                                                Lack of interest

                                                That's crazt talk, E10. Next thing you know, you'll be talking about progressive tax rates to target the rich instead of the poor. Ludicrous...

                                                Comment


                                                  #25
                                                  Lack of interest

                                                  I've sort of assumed that none of the interest rate cuts since Lehman Bros. went tits-up were expected to be passed on to consumers. They were designed by central banks not to stimulate more lending but to increase retail banks' lending margins so that they can re-capitalize quickly.

                                                  Am I wrong about this?
                                                  Yes, I think you are, in UK terms at least. The latest Base Rate cut was very much about reducing the cost of domestic mortgages and making credit cheaper for small businesses.

                                                  Comment

                                                  Working...
                                                  X