Interest Rates down to 0.5%!!

Stuck on a fixed-rate mortgage for the next couple of years as we bought our house just before everything crumbled.

I reckon to begin with we paid about 10k too much for the place, and that's not counting the depreciation over the period of recession. Haven't checked, but I'm 100% sure we're in a negative equity position now.

My question is - can the bank, having noticed you're in negative equity, force repossession even if you've been meeting your payments every month - or is that simply reserved for those who fail to meet payments?
 
Pestilence said:
My question is - can the bank, having noticed you're in negative equity, force repossession even if you've been meeting your payments every month - or is that simply reserved for those who fail to meet payments?
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Read the contract. ;) The bank can't force a reposession like that.
 
The massive issue still is even if you put 15% deposit down 2 years ago and now are coming up to a remortgage your house wont be worth what it was so we are most of us not in the 60-75% LTV areas so we cant get any decent rates anyway. This interest rate drop does utterly nothing until the banks start offering some realistic mortgages.

Whilst 100% mortgages ruined lots of people we had one and paid it in full every month and made a nice profit on a flat which allowed us to get a house and use the equity for a deposit, so the 100% thing wasnt bad for everyone, now it seems you cant even get a 90% mortgage.
 
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Concorde Rules said:
Unless you have done a university course in economics, the bank of england are probably more qualified to think what is correct than you are :p
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A rather narrow minded view.

I've never stepped foot in a university, let alone studied at one yet I can see a number of crucial mistakes - but then I actually gain from the markets so I at least know I'm doing things right, perhaps the BoE should hire me? :p

Some of the greatest economists are none academics, the most celebrated business minds too.

To be honest the media is awash with *analysts confabbing over what's already happened, no point picking over the pieces now, look to and work to prevent the same things happening in the future.

*if they really knew what they were talking about they wouldn't be analysts.

You have to ask yourself what exactly this stimulus is actually stimulating and why they thought it a good idea? This is unprecedented territory for the banking sector, a now very defensive and illiquid banking sector at that.

Total debt overshadows total cap, as we speak our banks are in fact bankrupt, the government is propping up the good majority.

Who typically has money to spend in an economy? OAPs, savers and workers, all have cash flow in some form.

We can remove workers from the equation as they now direct their funds to surviving in a rocking market with soaring redundancy.

Instead focus on the considerable and regular 'natural' source of economic stimulus that is retirees and savers, this key cash flow has been slashed thanks to the rate cuts.

Bank were not going to lend, the government should have known that, if banks weren't going to lend why reduce rates? Reduced rates just have a negative effect on the economy and has spurred the government on to quantitive easing damaging sterling by reducing it's value. We knew all this. Yet 'we' ran head first in to it, Gordon is a moron.


Excuse the rush and mistakes, I should be working!
 
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Edleake said:
Bank were not going to lend, the government should have known that, if banks weren't going to lend why reduce rates? Reduced rates just have a negative effect on the economy and has spurred the government on to quantitive easing damaging sterling by reducing it's value. We knew all this. Yet 'we' ran head first in to it, Gordon is a moron.
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I really have to agree with this. Considering these problems came to a head only recently and we are already at 0.5% interest, with £150billion of cash being invented and trillions of bank debt now owned by the tax payer should go some way to show people that prudent financial decision making has gone out of the window.

Gordon brown burned every penny of money this country had spare, and then took on more debt to spend more. What exactly do we have to show for it? A regenerated transport system? A better NHS? Higher quality schooling? Nope, we have a financial system that has collapsed under it's own greed and no room to maneuver.

Anyone who thinks Gordon Brown will be remembered as a great economist is a fool, and it's not even about making a few mistakes. He demonstrated typical labour tax and spend policy and now we face the same broken situation that previous labour governments left us with.

The irony of this is that my dad warned me about this back in 97 (since I have never lived through a labour government), but I typically didn't heed his experience - "new labour" blah blah blah. Oh how I've learned. Will I ever vote for another labour government in my lifetime...?
 
AJUK said:
You clearly have no comprehension whatsoever how money works and how BoE independence has lead to a lack of regulation - the root cause of the problem we are facing. It is all Brown's fault.
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I would level the same accusation at you, if you're naïve enough to think that all of this comes down to one individual.

Let's say Brown had a direct control over interest rates instead of the Bank of England - what rate could he have picked to get us out of this mess? None, because interest rates are not the be all and end all of the economy as you seem to believe.

Secondly, how you can compare Zimbabwe, a hyperinflationary country, with the UK where inflation will probably become deflation in 2009 if it hasn't already, is beyond me.
 
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Robbie G said:
I would level the same accusation at you, if you're naïve enough to think that all of this comes down to one individual.

Let's say Brown had a direct control over interest rates instead of the Bank of England - what rate could he have picked to get us out of this mess? None, because interest rates are not the be all and end all of the economy as you seem to believe.
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I don't think you can blame Brown for the wider financial crisis, but you can blame him for governments reaction to it and the fact we have nothign in reserve for a rainy day like this. The man is clearly a fool who only cares about his political reputation.
 
I'm on a 2 year fixed mortgage that runs out in October. I got a mortgage for 100k. When it comes to remortgaging, will I have any problems?
 
msm722 said:
I'm on a 2 year fixed mortgage that runs out in October. I got a mortgage for 100k. When it comes to remortgaging, will I have any problems?
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All depends on your LTV in October and what the mortgage companies are doing (e.g. Northern Rock said they're going to be offering 90% LTV mortgages soon I think). If you bought 2 years ago then you probably will have problems re-mortgaging (I'm in the same boat btw).
 
msm722 said:
I'm on a 2 year fixed mortgage that runs out in October. I got a mortgage for 100k. When it comes to remortgaging, will I have any problems?
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Why would you want to remortgage? In most cases it will be cheaper to just drop onto your lenders SVR/BMR.
 
DarthBallz said:
all I know is my mortgage payments went from £600 per month to £300.

long live Cpt. Credit Crunch!!
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Yes but you house also went from (Value) to (Value - 30%) and falling. With the likelhood that it will take approximatley a decade to regain its former levels.

Hopefully however you purchased a house, not an investment, and all that is not relevant to you as you have a home that now costs you less a month!
 
The irony is your house was overinflated so anything you were and are still paying is still over the market value (the real value, not current pricing strategy, if you can call it that). The housing market was a ticking timebomb ready to go off, the ashes hav yet to settle, in fact we have several more years of fallout to contend with... it could get even worse if American starts to default heavily, the fall, sorry 'conservatorship' of Freddie Mac has opened up middle America to serious pain.

I nearly laughed myself to death when Darling suggested the green shoots of recovery where on their way. Seriously, how on earth is this guy allowed to control our economy, blunder after blunder? It would take a few minutes to sit down with the technicals to see exactly what the market has done, is doing and will 'likely' do, if only he'd open his eyes.

It's not doom and gloom, it's called matter of fact.
 
Edleake said:
I nearly laughed myself to death when Darling suggested the green shoots of recovery where on their way. Seriously, how on earth is this guy allowed to control our economy, blunder after blunder?
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Except he never said that. Baroness Vadera did.
 
Why do people keep suggesting that the problem is the lack of available credit? Clearly the problem is with market confidence and you could give a bank a trillion of extra cash but that doesn't mean they will lend it if in all likelihood the lending won't secure more profit.

Right now in the thick of the mire, it seems all the banks want to do is hold on for dear life, not bail the government out of a decade of bad fiscal policy.
 
nero120 said:
Why do people keep suggesting that the problem is the lack of available credit? Clearly the problem is with market confidence and you could give a bank a trillion of extra cash but that doesn't mean they will lend it if in all likelihood the lending won't secure more profit.

Right now in the thick of the mire, it seems all the banks want to do is hold on for dear life, not bail the government out of a decade of bad fiscal policy.
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Holding on for dear life, they're walking corpses! The reality is a good number of them were insolvent just a month or so back, one school of thought lends itself to letting bad banks die as would any other poor (understatement) performing business.
 
Great time to be studying Economics at the LSE! I will let you know what my lecturer has to say about on this on Monday, it's pretty unprecedented.

Start of the year I had brilliant plans of maxing out the large 0% overdrafts us students get and earning a fair bit of money from the interest - hardly worth doing it now.
 
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