Bank Base Rate down by 1.5 %!

Still 2 years left on my fixed rate mortgage so all I'm doing is losing a few quid on my rather meager savings.
Good news for you guys on variables and trackers though. :)
 
Scam said:
What are you contesting? The fact that savers will lose out? Isnt inflation nearly 5% at the moment? I was hard-pressed to find an ISA paying much over 6% just a few weeks, what's going to happen now? Woop, i can get a rate below inflation and actually lose money?!
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Savers will lose out if all the money the banks have lent becomes bad debt and the banks go out of business.

Ah but the we have real deflation atm. That's what the BoE is really worried about.
 
Awesome, I'm renting and don't have enough deposit to go for a mortgage, I'm soo happy today :/
 
Tracker +.49% for the full term. They have to pass on the full cut within 30 days. Woohoo!

Time to redirect the 250 odd quid saving into overpayments...
 
I finished my tracker which was 1% below base (that was a good deal) about 2 months ago, wish I could get that deal again ;)

Going to have to keep my eyes peeled for a good deal.
 
HEADRAT said:
The fear I have it this rate cut will be meaningless, the Bank of England base rate is one thing, what you can actaully get a mortgage for is quite another!

If you currently on a tracker that follows BOE base rate you're laughing, those that are looking for a new deal once there currenty mortgage is up for renewel might have a harder task.
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Agreed, while those people on existing trackers will see the rate go down I would expect new mortgages to actually go up.

Banks won't be making as much money given that they will have to drop the rate by 1.5% for those mortgages that follow the BoE base rate) so they will have to make up the shortfall by raising rates on new loans.

Good if you have an existing mortgage, but not so good if you're remortgaging.
Will be interesting to see what happens to LIBOR as well, I can't imagine it will drop by anything like 1.5%.
 
My mortgage comes to an end any time now, any advice on what I should be looking for with my new one? Is it still best to go for a long term fixed rate? (I don't know anything about trackers)
 
Skiddley said:
Tracker +.49% for the full term. They have to pass on the full cut within 30 days. Woohoo!

Time to redirect the 250 odd quid saving into overpayments...
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Thats a good point actually. At what point does it make more sense to put money going into an isa into mortgage overpayments?
 
Messiah Khan said:
Snap. I still need to save about another £10-£15k before I can even consider getting a mortgage.
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Same boat as you, need at least £20k between myself and the Mrs, but getting her to save is impossiblr, always clothes, cigs, lash, and whining how she has no money :rolleyes::rolleyes:
 
leaskovski said:
Thats a good point actually. At what point does it make more sense to put money going into an isa into mortgage overpayments?
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At any time your mortgage interest rate is greater than your ISA interest rate (including any deductions for tax), which will be always, although bear in mind that some mortgages prohibit or limit overpayments - e.g. mine limits overpayments to 10% of the total capital per year.

Only reason not to imo is I think it's a good idea to have a cash buffer for emergencies and unexpected costs.
 
eidolon said:
My mortgage comes to an end any time now, any advice on what I should be looking for with my new one? Is it still best to go for a long term fixed rate? (I don't know anything about trackers)
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If your mortgage is coming to an end the best option is probably to leave it open for now. Just check your terms but usually is around base + 1.99% which would put you at 4.99% and with more rate cuts expected no point fixing it yet. However sometimes they are linked to LIBOR which is not so good news. Problem is right now for new deals you might get an ok rate percentage wise but they are hammering people with hefty arrangement fees which doesn't make the mortgage worthwhile at all.
 
With a shortage of money in the system this move seems a bit short sighted. The banks money comes from savers, and with interest rates this low where's the incentive to save?
Jimathy said:
If you've got savings then you'll probably be better off paying some of the mortgage off with it all.
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And if you don't have a mortage?
 
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Yeah well I got my boss a mortgage at bank of england base rate plus 0% for two years then 0.95% above base for the rest of its life just before the whole financial thing went belly up.

That was an amazing mortgage deal and I have yet to have seen better and doubt I will ever see it again.

Interestingly enough, I was talking to the manager at Yorkshire Bank who it was with and they said that mortgage was only available for 6 weeks before the pulled it after realising it was too generous and that only 2 people took it out in the Northeast so I think my boss owes me a payrise now :D
 
jamief said:
Are you a complete buffoon?
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You build a strong economy on savings, not debt. The reason we're in this mess is that interest rates were too low for too long. Banks now need *more* money, not less, and cannot afford to lend without attracting more savings (or foreign money) to balance that debt.

Make no mistake. Today's move is not a good sign. It is a very, very, very bad sign indeed. The BoE knows what's ahead.

I feel sorry for those who are unprepared for the next decade. :-/

Andrew McP
 
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