Bank Base Rate down by 1.5 %!

chipperhead · 6 Nov 2008 at 15:31

megakid said:
I'm tracking at a discount of -0.29%.

2.71% for me on a fully flexible interest only mortgage - Which begs the question - should I continue to overpay or shall I invest all the money and just pay interest?

That's fantastic, is this for term?

megakid · 6 Nov 2008 at 15:33

chipperhead said:
That's fantastic, is this for term?

No - just until September 2009 then it's +0.99%. At that point hopefully I can remortgage on a low rate fixed? We'll see.

Sagalout · 6 Nov 2008 at 15:57

LOAM said:
Surely this sentence breaks some form of logic rule doesn't it ?

Haha, yeah, I was thinking the same!

NickK · 6 Nov 2008 at 16:02

Greebo said:
Doubt you will see any "good" long term fixed rates on offer cause the banks know that information too!
*snip*
If you think you might be able to pick up a 3% fixed rate for 24 years your dreaming

Yup very true but anything that's low enough for the first few years is good for a couple of reasons:
a) With the interest low the same payments on the mortgage affect the capital (thus the total amount repaid and the monthly cost when the rate increases at the end of the fixed term).

b) Option to get some redecorating etc in before hand. This is based on the fact that the owner can afford the repayments *before* the rate drop thus not spending further into debt.

Clipsey · 6 Nov 2008 at 16:05

HEADRAT said:
Rates as low as 2% are being predicted for next year, your gonna love it

Now that I can hope for!!

Jonnycoupe · 6 Nov 2008 at 16:11

megakid said:
I'm tracking at a discount of -0.29%.

2.71% for me on a fully flexible interest only mortgage - Which begs the question - should I continue to overpay or shall I invest all the money and just pay interest?

How does overpaying an interest only mortgaga work? :confused:

scorza · 6 Nov 2008 at 16:16

Jonnycoupe said:
How does overpaying an interest only mortgaga work?

You still have to pay off the capital eventually. Reducing the capital during the mortgage means you reduce the interest payable each month.

Jonnycoupe · 6 Nov 2008 at 16:20

Ah right. Suppose thats better rate saving than stuffing it in a saving account.

TomO · 6 Nov 2008 at 16:29

lowering interest rates isnt to penalise savers. its to encourage spending, not necessarily by more borrowing, but also from money that people would have saved at a higher interest rate but will instead spend now.

from my point of view this is great news as i will be saving a fortune each month, i was looking forward to the 50 basis point drop, so this is a great surprise!

Jonnycoupe · 6 Nov 2008 at 16:32

I dont think this cut is really aimed at the consumer market is it? More for interbank lending?

HEADRAT · 6 Nov 2008 at 16:46

Savers won't suffer too much, the banks want you money to help with their capitialisation, there will still be some great saving rates in my opinion.

The BOE is guaranteeing the lending between banks (LIBOR), so the fact it's been so high seem crazy!

csmager · 6 Nov 2008 at 16:51

Jonnycoupe said:
I dont think this cut is really aimed at the consumer market is it? More for interbank lending?

Although it might have an affect on interbank rates, it's aimed squarely at consumers in an attempt to make them spend their way out of a recession.

meghatronic · 6 Nov 2008 at 16:57

HEADRAT said:
Savers won't suffer too much, the banks want you money to help with their capitialisation, there will still be some great saving rates in my opinion.

The BOE is guaranteeing the lending between banks (LIBOR), so the fact it's been so high seem crazy!

I stand to lose money here. My interest rate is linked to the base rate. I will lose a lot.

HEADRAT · 6 Nov 2008 at 17:00

meghatronic said:
I stand to lose money here. My interest rate is linked to the base rate. I will lose a lot.

Then you probably selected the wrong product, I suppose you were hoping that interest rates were going to stay high?

Energize · 6 Nov 2008 at 17:24

Now watch as everyone withdraws their savings due the crap interest rates. I'm just glad I have a fixed rate account and bought gold.

spoonz · 6 Nov 2008 at 17:57

YAY

My +0.79% tracker started 2 months ago, I didnt go for fixed precisely cause this could happen.

No fees, no ties, so I can jump on a fixed next day if the worst happens.

spoonz · 6 Nov 2008 at 17:59

chipperhead said:
No mate, I don't expect 3%. A fixed rate for 25 years at 5% and I'd certainly consider, although I can't find any 25 year fixes at the moment.

Just get a term tracker. 25 year fixed is madness. What it it drops to 1% for 10 years.(unlikely but not impossible). Your redemption would be HOOOOOOOOOOOGE

AJUK · 6 Nov 2008 at 18:00

Of course, everything is under control now after WonderBrown saved the world financial system single handedly, or so he tells us. This smacks of panic and confirms nothing more than we are deeper in the 'Brown' stuff than we first thought.

sven256 · 6 Nov 2008 at 18:05

Energize said:
Now watch as everyone withdraws their savings due the crap interest rates. I'm just glad I have a fixed rate account and bought gold.

Ouch I would not be glad I bought gold, with how much it has dropped recently, unless you bought it a fair few years ago.

I think my saving may go into oil. with the price atm it looks a very good buy.

Slam62 · 6 Nov 2008 at 18:10

smacks of desperation, somebody knows something I don't