Interest Rate Down to 1.5% now
08 January 2009, 01:08 PM
#31
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But surely, if the bank do not start lending again, house prices will continue to devalue, making their investments worth even less? 
08 January 2009, 01:09 PM
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That's actually a good deal really. It means you have a relatively recent mortgage and while those on trackers or SVRs are seeing the payments go down (possibly not much further though as most agreements have a collar level they won't go below) anyone looking at a new mortgage is being asked for a massive deposit or facing much higher rates than yours. Check it out, you are probably still on a good deal by comparison.
5t.
5t.
08 January 2009, 01:18 PM
#35
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That's actually a good deal really. It means you have a relatively recent mortgage and while those on trackers or SVRs are seeing the payments go down (possibly not much further though as most agreements have a collar level they won't go below) anyone looking at a new mortgage is being asked for a massive deposit or facing much higher rates than yours. Check it out, you are probably still on a good deal by comparison.
5t.
5t.
Now paying 1.73%, looking forward to the next reduction
08 January 2009, 01:20 PM
#36
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We put about 22.5% down to get a 10 year fix at 5.25%
I struggle to comprehend how low these rates are now.Yes they were low when the boom all first started but to me,5.25% was a great deal in the mortgage market.
I was more used to seeing historical figures of 10-15% and a lot of the older generation (my house cost me just £3000,you know.Your parents etc) were paying double digits interest rates
Seems really odd times to me (and,the lenders aren't bound by the bank rate at all are they? If they want to wack it up to whatever % they can can't they? It's just the government asking them to follow suit,except trackers of course)
I struggle to comprehend how low these rates are now.Yes they were low when the boom all first started but to me,5.25% was a great deal in the mortgage market.
I was more used to seeing historical figures of 10-15% and a lot of the older generation (my house cost me just £3000,you know.Your parents etc) were paying double digits interest rates
Seems really odd times to me (and,the lenders aren't bound by the bank rate at all are they? If they want to wack it up to whatever % they can can't they? It's just the government asking them to follow suit,except trackers of course)
08 January 2009, 01:35 PM
#42
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We put about 22.5% down to get a 10 year fix at 5.25%
I struggle to comprehend how low these rates are now.Yes they were low when the boom all first started but to me,5.25% was a great deal in the mortgage market.
I was more used to seeing historical figures of 10-15% and a lot of the older generation (my house cost me just £3000,you know.Your parents etc) were paying double digits interest rates
Seems really odd times to me (and,the lenders aren't bound by the bank rate at all are they? If they want to wack it up to whatever % they can can't they? It's just the government asking them to follow suit,except trackers of course)
I struggle to comprehend how low these rates are now.Yes they were low when the boom all first started but to me,5.25% was a great deal in the mortgage market.
I was more used to seeing historical figures of 10-15% and a lot of the older generation (my house cost me just £3000,you know.Your parents etc) were paying double digits interest rates
Seems really odd times to me (and,the lenders aren't bound by the bank rate at all are they? If they want to wack it up to whatever % they can can't they? It's just the government asking them to follow suit,except trackers of course)
No they aren't bound you are right there. If you had that sort of deposit and if you can find a few more grand to make 25% have a chat with the bank and see what they can do. It still might not be worthwhile swapping.
Ours is the same (only 2 years though) but when we spoke to our bank they couldn't actually do better unless we came up with even more of a deposit which we didn't want to do.
EDIT for Chris - we put down 10%, seriously look into it i doubt you will get a better rate unless you can come up with some serious wedge. There was an article the otherday saying that to get the best rates you need a 40% deposit!!!
Many mortgages need 40% deposit - Personal finance and investing news | Money saving tips | Financial news | Personal finance news - MSN Money5t.
Last edited by fivetide; 08 January 2009 at 01:39 PM.
08 January 2009, 01:43 PM
#44
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No they aren't bound you are right there. If you had that sort of deposit and if you can find a few more grand to make 25% have a chat with the bank and see what they can do. It still might not be worthwhile swapping.
Ours is the same (only 2 years though) but when we spoke to our bank they couldn't actually do better unless we came up with even more of a deposit which we didn't want to do.
EDIT for Chris - we put down 10%, seriously look into it i doubt you will get a better rate unless you can come up with some serious wedge. There was an article the otherday saying that to get the best rates you need a 40% deposit!!! Many mortgages need 40% deposit*-*Personal finance and investing news | Money saving tips | Financial news | Personal finance news - MSN Money
5t.
Ours is the same (only 2 years though) but when we spoke to our bank they couldn't actually do better unless we came up with even more of a deposit which we didn't want to do.
EDIT for Chris - we put down 10%, seriously look into it i doubt you will get a better rate unless you can come up with some serious wedge. There was an article the otherday saying that to get the best rates you need a 40% deposit!!!
Many mortgages need 40% deposit*-*Personal finance and investing news | Money saving tips | Financial news | Personal finance news - MSN Money5t.
08 January 2009, 01:58 PM
#45
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The Govt want us to go out and spend spend spend out way out of the mess they've got us into.
And with '000 of jobs going everyday, anyone who does that is a fool.
08 January 2009, 02:06 PM
#46
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Then, due to these record interest rates, and the rising cost of imports, inflation will start to rise. This will eb made worse if the Govt decides to print money. To combat this rise in inflation, the BoE will have to raise rates.
I'm prepared to be taught a lesson in econimics though, by some of the experts on here.
08 January 2009, 02:10 PM
#47
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That's about right actually. The scary thing is the extent to which we're bottling up inflation is pretty much a total guess, this sort of co-ordinated anti-recessionary action has nver been seen before. What i would challenge though, is the timespan of 18 months. I would love that to be right. But the chances of it actually panning out like that are, unfortunately, minimal.
08 January 2009, 02:28 PM
#49
As I see it the Gov are trying to put money in peoples pockets(by making them pay less on their mortgages ie, lowering the interest rates ) to give the feel good factor again and hence get people to spend to get the economy moving .
If this succeeds and they then raise rates up high again ,they will just undo the whole healing process and probably start us in a downward spiral again .
For that reason I see a good few months of this low rate and then a gradual increase over several years after that until the ship has found calmer waters .
IMO for what its worth .
If this succeeds and they then raise rates up high again ,they will just undo the whole healing process and probably start us in a downward spiral again .
For that reason I see a good few months of this low rate and then a gradual increase over several years after that until the ship has found calmer waters .
IMO for what its worth .
08 January 2009, 02:42 PM
#50
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As I see it the Gov are trying to put money in peoples pockets(by making them pay less on their mortgages ie, lowering the interest rates ) to give the feel good factor again and hence get people to spend to get the economy moving .
If this succeeds and they then raise rates up high again ,they will just undo the whole healing process and probably start us in a downward spiral again .
For that reason I see a good few months of this low rate and then a gradual increase over several years after that until the ship has found calmer waters .
IMO for what its worth .
If this succeeds and they then raise rates up high again ,they will just undo the whole healing process and probably start us in a downward spiral again .
For that reason I see a good few months of this low rate and then a gradual increase over several years after that until the ship has found calmer waters .
IMO for what its worth .
That's how I see it too. Don't know if my mortgage lender will go any lower, i'm already on 1.74% so hoping for 1.24% now but will wait and see what they announce. Think they might be forced to as one who took Government handouts.
As you say they can't just whack the rates up as it would kill the economy stone dead.
08 January 2009, 02:49 PM
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And then it's welcome to Zanu NuLabours paradise. We hope you enjoy your stay.
08 January 2009, 02:55 PM
#53
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Not so sure inflation will rocket though as like everyone is saying above what difference is it making. I'm certainly not going out and blowing the hundreds i'm saving a month as i'm using it to pay off debt and my impending wedding (low interest rates couldn't have come at a better time for me!). New toy expenditure is over for a long time and with everyone worried about their jobs then extra money in your pocket from cheaper mortgages should stay exactly there, in your pocket or pay off existing debt.
08 January 2009, 03:03 PM
#54
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I took a 2 year tracker last Feb time when it was at 5.75% and our rate floated 1.24% above BOE so 6.99% that was a 100% mortgage no deposit.
We moved into house May time and thats when mortgage started.
Currently as Lloyds / C&G have passed it all on its 3.24% and now will be after today 2.74%.
Original payments - £1100
Current payments - £500
New payments - £x ? £420?
Gonna be fun when we have to remortgage
think I took the right option with the tracker though. Come next May reckon it'll be around 8% ish, having said that both me and other half have over the last year been fortunate enough to increase combinded income by over £10k PA so should be ok + I've paid off a £15k loan
We moved into house May time and thats when mortgage started.
Currently as Lloyds / C&G have passed it all on its 3.24% and now will be after today 2.74%.
Original payments - £1100
Current payments - £500
New payments - £x ? £420?
Gonna be fun when we have to remortgage
think I took the right option with the tracker though. Come next May reckon it'll be around 8% ish, having said that both me and other half have over the last year been fortunate enough to increase combinded income by over £10k PA so should be ok + I've paid off a £15k loan
08 January 2009, 03:06 PM
#55
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I assume you continue to pay the full £1100 as an overpayment of £600 every month, thereby effectively dropping £7200 a year from your capital and reducing the interest ?
08 January 2009, 03:07 PM
#56
I may be wrong but inflation seemed to be rising (IMO )because everyone was having us over as mugs .Oil going through the roof ,gas /electric going throught the roof,food prices going through the roof ,just about everything we needed was increasing way beyond most peoples pay rises etc .Everyone wanted an extra slice from us .
Not so strange to see it come down now that the country has been brought to a grinding halt .People have nothing else to give .Not surprising is it really .
Not so strange to see it come down now that the country has been brought to a grinding halt .People have nothing else to give .Not surprising is it really .
08 January 2009, 03:08 PM
#57
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Those thinking it will be 8%+ next year need to think how will this happen? Jump from 1.5% to 8% in one go? Nope. Do it by .25% rises monthly at worst possibly quarterly. Then when exactly will these rises start? No time soon that is for sure so how on earth can it ever be 8%+ in 12 months?!
08 January 2009, 03:12 PM
#58
To go back to an earlier question, isn't one of the reasons they are dropping the rate is to get more disposable income into the homes in the uk and thus kick start spending again? obviously this is only going to affect tracker mortgages but there is alot of them out there!
Dave
08 January 2009, 03:19 PM
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Those thinking it will be 8%+ next year need to think how will this happen? Jump from 1.5% to 8% in one go? Nope. Do it by .25% rises monthly at worst possibly quarterly. Then when exactly will these rises start? No time soon that is for sure so how on earth can it ever be 8%+ in 12 months?!