Gully
Monkey in a seagull suit.
The MPC of the BOE have cut the base rate to 5%. Will be interesting to see how much, if any, is cut from mortgage rates.
Interest Rates
- Thread starter Gully
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Beach Hut
Brighton Bhuna Boy
Not much I suspect as they seem to be going the other way for mortgages unless you have a large equity in your property.
Uncle Spielberg
Well-known member
Uncle C
Well-known member
I suspect they may still go up a bit. Almost nobody wants mortgage business any more.
Blackadder
Brighton Bhuna Boy
Depends on the mortgage.
If you have a tracker connected to the base rate, it will fall. I doubt if that will be the case with a lot of variables though!
If you have a tracker connected to the base rate, it will fall. I doubt if that will be the case with a lot of variables though!
Gully
Monkey in a seagull suit.
- Thread starter
- #7
I think that the base rate will probably come down again this year, two further cuts of a quarter to bring it down to 4.5%, that will certainly put pressure on the lending institutions to ease pressure on borrowers...even if they don't act on this reduction.
Uncle C
Well-known member
I think the base rate is almost an irrelavance at present. Its the LIBOR thats influencing the market.
eastlondonseagull
Well-known member
The LIBOR's the important thing to worry about, isn't it?
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Uncle Spielberg
Well-known member
Existing customers on tracker rate will receive a 0.25% reduction
Existing customers on a variable rate, we'll see, doubt many will get 0.25% reduction, a token 0.10% is more likely
Existing customer of fixed rate no change
tracker rates are now around 1% above bank base rate for 2 years, 6 months ago there was a deal 0.36% below bank base rate for 2 years, so lenders raising their margins mean even with 3 rate cuts you are much worse off still
Existing customers on a variable rate, we'll see, doubt many will get 0.25% reduction, a token 0.10% is more likely
Existing customer of fixed rate no change
tracker rates are now around 1% above bank base rate for 2 years, 6 months ago there was a deal 0.36% below bank base rate for 2 years, so lenders raising their margins mean even with 3 rate cuts you are much worse off still
REDLAND
Active member
Uncle Spielberg
Well-known member
looking good for you Redders
Uncle Spielberg
Well-known member
it does seem from the news variable rate borrowers will get the full 0.25% from a few lenders
Uncle Spielberg
Well-known member
The bank of england is still being incredibly cautious 0.75% in total is meagre considering rates were 3.5% less than 2 years ago in a bouyant market when there was loads of money around so even at 5% they seem high to me based on the present ecomonic indicators and the fact the USA have agressively slashed rates to 2.25%.
Lord Bracknell
On fire
I found this article in yesterday's Guardian interesting, in particular the suggestion that the best way for society as a whole to wipe out personal debt is massive inflation (like in the seventies).
If we had 25 per cent inflation, combined with pay increases to match and falling house prices, everything (well, OK, not QUITE everything) would be perfect.
Have we got more debt than money?
For the few thrifty puritans still out there, it's retribution time. The decade-long, debt-fuelled shopping spree, secured against the fake prosperity of soaring house prices, is over.
As individuals, we owe £1.2tn in mortgages. On top of that we have loaded another £220bn on to our credit cards and personal loans. Our personal debts are more than the total annual output of UK plc (£1.33tn in 2007) and are equal to around £25,000 a head - and that includes every baby, schoolchild and granny in the country. Few other nations have maxed out on debt in the same way as Britain - apart from the US, which appears to be hurtling into recession at particle-accelerator speed.
Are we really so leveraged that we don't have the money to repay our debts? The £1.2tn in mortgage debt is more than matched by the value of the UK's housing stock. According to the Halifax, the total value of Britain's houses at the end of 2007 was £4tn. The trouble is, as the Halifax revealed yesterday, those houses were worth 2.5% less than the month before, a slide in value equal to £100bn. But prices would have to crash on a hitherto unforseen scale before we as country moved into negative equity. The crash of the early 90s saw prices fall by around 35% in real terms. Even if that is repeated, our balance sheet will remain positive.
At banks and building societies we have deposits worth £556bn. In our wallets, there's around £48bn in cash. It's not enough to cover the debt, but good for a few rainy days' repayments. The problem is, the people with the savings tend not to be those with the debts. In the 1970s, we wiped them out with inflation. The reality in these low-inflation times is that if you have debts, they will stay real and stay for longer.
If we had 25 per cent inflation, combined with pay increases to match and falling house prices, everything (well, OK, not QUITE everything) would be perfect.
Have we got more debt than money?
For the few thrifty puritans still out there, it's retribution time. The decade-long, debt-fuelled shopping spree, secured against the fake prosperity of soaring house prices, is over.
As individuals, we owe £1.2tn in mortgages. On top of that we have loaded another £220bn on to our credit cards and personal loans. Our personal debts are more than the total annual output of UK plc (£1.33tn in 2007) and are equal to around £25,000 a head - and that includes every baby, schoolchild and granny in the country. Few other nations have maxed out on debt in the same way as Britain - apart from the US, which appears to be hurtling into recession at particle-accelerator speed.
Are we really so leveraged that we don't have the money to repay our debts? The £1.2tn in mortgage debt is more than matched by the value of the UK's housing stock. According to the Halifax, the total value of Britain's houses at the end of 2007 was £4tn. The trouble is, as the Halifax revealed yesterday, those houses were worth 2.5% less than the month before, a slide in value equal to £100bn. But prices would have to crash on a hitherto unforseen scale before we as country moved into negative equity. The crash of the early 90s saw prices fall by around 35% in real terms. Even if that is repeated, our balance sheet will remain positive.
At banks and building societies we have deposits worth £556bn. In our wallets, there's around £48bn in cash. It's not enough to cover the debt, but good for a few rainy days' repayments. The problem is, the people with the savings tend not to be those with the debts. In the 1970s, we wiped them out with inflation. The reality in these low-inflation times is that if you have debts, they will stay real and stay for longer.