Interest Rates down to 1%

[Uncle Spielberg]

The key is to get out of SVR and tracker rates and into fixed rates 3-5 years. Its all timing but if any lender has a 5 year fixed rate with free survey and free legals up to 75% loan to value anything near 4% people would be mad not to re mortgage onto it if they are on svr and have no penalties. I think 5 year fixed rates may fall close to 4% but doubt they would ever come down much below that. PM me if you want any figures.

 

[bhafc99]

Good posts Uncle Spielberg. Lenders are advertising decent rates everywhere, but it's only when you check the T&Cs you see it's for 60% LTV minimum.

FTBs and remortgagers who've lost some equity over the past 18 months are all stuffed with shit rates, and this cut - just like all the others - will mean nothing.

We remortgaged last autumn and were valued at 85% LTV, meaning we had to take a fixed rate of 6.25%. Since then BoE rates have plunged from 5% to 1%, so - logically - you'd think I'd be sick at being stuck on 6.25% when surely the deals now are so much better. Except they aren't. In fact, they're probably worse.

 

[Springal]

I am on a tracker, that is 0.4% about BoE rate, with RBS which is good. It is interest only on 90% LTV [although I have about 5% of LTV saved up in savings.] I need to remortgage next May [was a 2 year deal.] Realistically what should I be doing? Carrying on as I am doing and saving like mad hoping to get another 5% [so i can pay off 10%, meaning I have about 80% LTV?] Also by March next year, are we likely to see slightly better deals for people remortgaging or am i still looking at a 3 year, 5% fixed deal as my best bet? Just trying to plan for the future while I have a mortgage that is only [with current cut] about £150 per month.

Also, when I remortgage will I need a new survey and could that affect things with current market trends for property prices.

 

[Springal]

Good posts Uncle Spielberg. Lenders are advertising decent rates everywhere, but it's only when you check the T&Cs you see it's for 60% LTV minimum.

FTBs and remortgagers who've lost some equity over the past 18 months are all stuffed with shit rates, and this cut - just like all the others - will mean nothing.

We remortgaged last autumn and were valued at 85% LTV, meaning we had to take a fixed rate of 6.25%. Since then BoE rates have plunged from 5% to 1%, so - logically - you'd think I'd be sick at being stuck on 6.25% when surely the deals now are so much better. Except they aren't. In fact, they're probably worse.

It is all relative though, if you are on a deal you can afford its fine, its all ups and downs and sometimes I wish i was on a 5 year fixed deal as atleast I know where I stand every month!

 

[albionant]

What's the best fixed on the market if you are looking at around 60% LTV?
I have a fixed with Yorkshire BS, when it expires do I automatically fall into there variable rate or can they ask for there money back or force me to take out another fixed.
Thanks

 

[NMH]

It's a fairly obvious statement I know, but not everyone gets it;
Anyone saving bundles from a tracker mortgage rate, would always be wise at a time like this to plunge as much of that 'saving' into the mortgage anyway.

Also, if this is a bad time for saving, then best to expand on solid investments instead.
People are ready to bargain for cash money now.
Selling internationally is also a reasonable idea if you have something. The pound being weak means that foreigners will grab at the cheapness of it at their end - and once you have their money in pounds, it goes the same distance or better when spent inside this country.

Think of something that is desirable abroad, and .... carpe diem!

 

[Blackadder]

It's a fairly obvious statement I know, but not everyone gets it;
Anyone saving bundles from a tracker mortgage rate, would always be wise at a time like this to plunge as much of that 'saving' into the mortgage anyway.

Well said. I have a tracker. I have actually increased my payments,whilst the interest rates have being going down recenty. As a result the mortgage capital has imploded. I hope to have the thing paid off soon.

 

[Uncle Spielberg]

What's the best fixed on the market if you are looking at around 60% LTV?
I have a fixed with Yorkshire BS, when it expires do I automatically fall into there variable rate or can they ask for there money back or force me to take out another fixed.
Thanks

You will default onto their svr but they should be able to offer you some fixed rate options.

If you want a longer term fixed rate at 60% ltv or under I would say 4.69% fixed for 5 years, £ 995 fee added, free survey, free legals

 

[withdeanwombat]

Looks like the savings rate on my ISA is well and truly f***ed then. Vote the Tories back in for some more rampant inflation.

Attaboy!

Hows things at Nuns Corner,where I once had the misfortune to work? And at Legsby Avenue,where I always wanted to live!

 

[seagullsovergrimsby]

Attaboy!

Hows things at Nuns Corner,where I once had the misfortune to work? And at Legsby Avenue,where I always wanted to live!

The statue of Grim is no longer in the grounds of the college (now the Grimsby Institute and hoping soon to be a university ) ever since his knob was removed with a hacksaw. Legsby Avenue seems to be ok as we had a reccy around the area when my eldest son and his bird moved into their first flat together in Wintringham Street last March.

 

[mattb]

this doesn't bode well for my holidays in the summer, the pound could fall further now

 

[seagullsovergrimsby]

not if you take a holiday somewhere in the UK

 

[Shropshire Seagull]

This is a truely terrible move for savers.

Back when I did my Economics degree I'm sure I recall economists agreeing that savings were a bad thing because it takes money out of circulation.

Not disputing that some people are financially geared up to live of their savings interest as historically this has been a pretty safe an secure investment - but times have changed now.

Maybe an alternative would be to buy some cheap property with your savings and take the rental income as your "interest"?

I think its called buy-to-let - which now looks a lot less risky than stuffing it in a building society or under your bed.

 

[Don Quixote]

Its only temporary don't worry. They'll be banged up later on.

 

[timbha]

Its only temporary don't worry. They'll be banged up later on.

that's my concern. People will get used to low interest payments and spend the money saved on other things. When rates go up they'll be unable to meet the higher repayments and will be stuffed.

Good time to invest money saved into S&S ISA for 5+ years.

 

[Robbie G]

Back when I did my Economics degree I'm sure I recall economists agreeing that savings were a bad thing because it takes money out of circulation.

Savings are generally good for long term as savings leads to investment. Hence the massive rise of Japan where people saved considerably.

Obviously, short run, savings reduces the amount of consumption and so you can argue this does reduce demand and output. Savings doesn't lead to money being taken out of circulation though because banks should use it for loans etc.

 

[beorhthelm]

Back when I did my Economics degree I'm sure I recall economists agreeing that savings were a bad thing because it takes money out of circulation.

thats an odd one. so if no one saved, where would the money for the loans come from?

Maybe an alternative would be to buy some cheap property with your savings and take the rental income as your "interest"?

well thats exactly what alot of people have been doing for the last 10 years, they changed the pension regulations to allow property to be treated as a pension (put in a SIPP?) for favourable tax. some suggest its one of the things that fueled the house price boom, certianly in the 1/2 bed flat first time buyer type market.

 

[Dandyman]

To be fair, they DO pass it on but to the WRONG people.

If you've got shit-loads of equity in your property then there has NEVER been a problem getting re-mortgage finance. It's at the 'top-end' of the mortgage market where the problem lies.

Even with Base Rate at 1.5%, the best deal you can get from Abbey for a 90% mortgage is 7.09% and you have to pay a £2,499 fee for the privilege, which CAN'T be added to the loan!

If you want 95% - i.e. most first time buyers, forget it.

It's all very well the mortgage lenders saying they are opening up the market but they're doing it to the wrong people.

Bastards.

My partly nationalised lender is now charging me 4% - decent rate?

 

[sparkie]

In a couple of years I'm sure we'll look back at 1% interest rates as a golden age.

Once rates fall close to 0 and then the only thing the central bank can do is print money, and high inflation will be back in spades... 8%, 9% wouldn't be surprising, maybe over 10%. Bag a long term fix as soon as you can I think.

 

[strings]

Back when I did my Economics degree I'm sure I recall economists agreeing that savings were a bad thing because it takes money out of circulation.

Not disputing that some people are financially geared up to live of their savings interest as historically this has been a pretty safe an secure investment - but times have changed now.

Maybe an alternative would be to buy some cheap property with your savings and take the rental income as your "interest"?

I think its called buy-to-let - which now looks a lot less risky than stuffing it in a building society or under your bed.

I wish my savings were big enough to do that - it'll be a couple of years before I have enough for a buy-to-let morgage, but this was my intention.