[News] Base rate cut.

[GOM]

Sorry was thinking of new policies. The banks are going to need to make money. They can’t rely on Tory Government funding forever.

The banks seem to be making plenty of money, and please remind us what the Tory government funding is.

 

[Deleted member 37369]

Indeed, surely a tracker deal has to go down?

Unless the tracker deal has a 'collar' in the T&Cs ... ie whatever happens to bank base rate the rate on the mortgage deal won't fall below a certain rate. So the opposite to a capped rate.

 

[knocky1]

The banks seem to be making plenty of money, and please remind us what the Tory government funding is.

You'll have to ask a lot nicer than that. False politeness and a fallacious sense of being part of a large group are not pleasant attributes.

 

[narly101]

Unless the tracker deal has a 'collar' in the T&Cs ... ie whatever happens to bank base rate the rate on the mortgage deal won't fall below a certain rate. So the opposite to a capped rate.

Pleased with the drop and my mortgage tracker - will now drop to 1.1%. Make hay while the sun shines.

 

[GOM]

You'll have to ask a lot nicer than that. False politeness and a fallacious sense of being part of a large group are not pleasant attributes.

Politeness may not be one of your traits but is the norm for myself, so nothing false there. I am part of the NSC group, or family as some may call it, so nothing fallacious there.

However your ability to avoid answering a direct and simple question has been noted as an attribute of yours.

 

[Weststander]

Unless the tracker deal has a 'collar' in the T&Cs ... ie whatever happens to bank base rate the rate on the mortgage deal won't fall below a certain rate. So the opposite to a capped rate.

Or if it isn’t directly related to BoE rates, eg LIBOR instead, which the private banks set.

 

[The Maharajah of Sydney]

Our mortgage is directly linked to BoE base rates, without a floor, so we will benefit straight away.

Depending on how many basis pts your tracking rate is set below the BoE base rate (or above if BoE base rates fall further into negative territory), without the restriction of a collar you might well end up with your bank paying you for your mortgage like this Spanish bank has had to for some of it's customers since 2015.

 

[Deleted member 37369]

Or if it isn’t directly related to BoE rates, eg LIBOR instead, which the private banks set.

Very true ... although your 'normal' man in the street is less likely to have a LIBOR linked mortgage.

 

[Weststander]

Depending on how many basis pts your tracking rate is set below the BoE base rate (or above if BoE base rates fall further into negative territory), without the restriction of a collar you might well end up with your bank paying you for your mortgage like this Spanish bank has had to for some of it's customers since 2015.

View attachment 120898

Switzerland has experimented with negative interest rates since 2015 (to devalue the SF and its negative effects). In two Cantons this has directly created negative mortgage rates. Borrowers are literally paid interest for borrowing a capital sum to buy a home.

https://www.ft.com/content/67f75b4c-fbe9-11e9-a354-36acbbb0d9b6

 

[Weststander]

Very true ... although your 'normal' man in the street is less likely to have a LIBOR linked mortgage.

True, just 200,000 of those.

 

[Uncle Spielberg]

I have been inundated with my clients today. My advise would be if you have a mortgage to review shortly, start looking 4-6 months before and apply no later than 3 months before your rate ends as the " free legals " are usually poor to dreadful and time is needed. I would if you are thinking of re mortgaging or getting a new mortgage sit tight for a week as there will be a trend re fixed rates and if they will fall further. They won't make a snap decision on that and their profit margins are very tight already. Here to help via confidential pm. Gareth/US