Interest Rates Down to 2%

Caporegime
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12 Mar 2004
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But they haven't though have they? Not all lenders have passed the rate reductions on at all. Others haven't passed it on in full. But almost all have reduced their savings rates!

The government have said they will force the lenders to reduce their rates, since they now have shares in the banks. Though when your using the above technique you fix the savings rate before something like this happens. ;)
 
Suspended
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18 Oct 2002
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I can't see how the Government are going to be able to force any bank to do what it wants, especially those in which it has no stake. The Government are living in the clouds, the BOE BR and LIBOR diverged a long time ago. The BOE BR does NOT reflect the true rate of borrowing that they have to pay to source wholesale funding. I think they are quite right to stick two fingers up to Gordon Brown on this issue.
 
Soldato
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14 Dec 2003
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Oh, and show me any savings accounts that pay more interest then they charge for an IO mortgage!

my IO mortgage just dropped to 3.13% - which it's fairly easy to find savings above, especially if it's one of those accounts you can't take the cash out of (why would you want to if you're saving to pay off the capital on a property?)

I haven't got a savings account as such, currently have around 8k in an investment fund thing which has always done very well (not so well in the first half of this year, but probably better than a lot of others)

I'm pretty much banking on the fact that I'll be able to get a job when I graduate and move onto a normal mortgage or overpay. If not, I could sell the flat and rent with a rubbish Tesco job or whatever.

IO mortgages are a great way of keeping the repayments low for the first few years.

Next month I'll pay half what I did 2 months ago.
 
Soldato
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*snip*The banks despite this massive £40bn+ investment from TAXPAYERS money are just not lending at all... you either have to be super rich or live at home to be able to buy a house these days and its bloody annoying.

I wish Brown and Darling would pass this bill forcing banks to start lending sensibly again not requiring 25% deposit etc. To put this in perspective the average house price is around £160k ergo you need £40000 to put down as deposit...

Well if you've contracted yourself to a massive amount of dept then what the TAXPAYERs are paying are the cost for those debts - a repayment if you will. In another post you've indicated that you're overdrawn etc so you're just paying for your (and others like you) which have placed themselves in debt.

I, on the other hand, have been a saver - I still have to pay for YOUR debts even though I don't have any (at all!).

I'm sat waiting for the house prices to fall, that 160-180K to pay for a two bedroom house down in the south east and I'll then put down that 25% deposit. I will also be able to pay the repayments too (this is aimed an anyone that's overstretched their finances that caused the boom in house prices). How can I afford that - simple I spent over ten years saving. :rolleyes:

However I blame the banks for changing to becoming lending houses rather than savings banks.

I see the future being hard - as everyone is having to pay for the mistake they can't keep the money flowing through businesses.. job cuts ahoy!
 
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my IO mortgage just dropped to 3.13% - which it's fairly easy to find savings above, especially if it's one of those accounts you can't take the cash out of (why would you want to if you're saving to pay off the capital on a property?)

I haven't got a savings account as such, currently have around 8k in an investment fund thing which has always done very well (not so well in the first half of this year, but probably better than a lot of others)

I'm pretty much banking on the fact that I'll be able to get a job when I graduate and move onto a normal mortgage or overpay. If not, I could sell the flat and rent with a rubbish Tesco job or whatever.

IO mortgages are a great way of keeping the repayments low for the first few years.

Next month I'll pay half what I did 2 months ago.

So you're being completely reckless with your finances then? It's your funeral I suppose!
 
Caporegime
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Those people here with savings, don't you have mortgages as well?
Nope :(. Just a nice pile of savings that are getting shafted by people's irresponsibility, and government incompetence.

How can I afford that - simple I spent over ten years saving. :rolleyes:
Dear me, not the old "save up for something so you can afford it trick"? I'm about two thirds of the way through that.

If I lose my job I reckon it will set me back 6 months, a year, tops.
 
Soldato
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5 Feb 2004
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Stroud
An interest-only mortgage would yield a 50% reduction though, which is why I asked...because interest only mortgages are pretty nasty to have right now...because any alternative investments you'll be making to make up the difference will be in danger of leaving you in trouble at the end of term...
You're right of course. That'll teach me for not checking figures before posting :o
 
Associate
Joined
26 Jan 2004
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Another sure sign that the economies of the west are completely up the spout.

Low interest rates are a danger sign. Near zero interest rates mean its time to panic.

Japan has had a 'lost decade' of near zero interest rates, yet nobody is borrowing or lending any money - Stalemate.

..... Unfortunately for us, while Japan has a hard working society with a family and group based set of ethics, we could almost be described as being quite the opposite - Not a good prospect when facing a situation where hard work and a strong family structure are what we need to get us OUT of this mess.
 
Caporegime
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Most of us live in the UK though, not America. Interest rates here are 2%, not near zero, and the BoE is already hinting that it might not cut interest rates any further.
 
Associate
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26 Jan 2004
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370
I wouldnt rule it out.

Cutting rates to 3 then 2 percent was a dumb idea .... so doing it again doesnt seem entirely impossible since we seem to follow suit with the USA like kids playing snap.
 
Soldato
Joined
17 Oct 2002
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5,538
With respect, I am not certain that you are comparing apples with apples. You know you must repay any credit balance on a card within a short time frame. IO mortgages rely completely on capital appreciation (assuming no repayment vehicle), which is flawed if you have capital depreciation which occurs in a HPC.

I am not comparing them, just saying people have valid reasons for doing it.

A family member had an IO mortgage because they were going abroad for a couple of years, paying a UK mortgage wouldn't be possible while earning Oz dollars, just wouldn't stretch.

They went IO and rented it out so that the rent payed the mortgage - when they came back home they sold up and moved to Kent (their plan all along).

If they had sold up before going they'd have had a massive short fall due to the rising market at the time, this was in their circumstances the best option.
 
Soldato
Joined
1 Aug 2003
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3,797
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Cheshire
With respect, I am not certain that you are comparing apples with apples. You know you must repay any credit balance on a card within a short time frame. IO mortgages rely completely on capital appreciation (assuming no repayment vehicle), which is flawed if you have capital depreciation which occurs in a HPC.

IO mortgages can give you the flexibility to overpay (T&C's allowing), or redirect funds elsewhere in times like these when there really is no point in paying off capital.

I prefer them to repayment mortgages.
 
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