interest rates cut by 1.5%

[Thedelldays]

down to 3% base rate...I wonder how much the lender will pass on if at all?

 

northern rock (who we all own a chunk of) are at 7.49% and (apparently) will not drop it!! I really feel for those with northern rock

Edited 6 November, 2008 by Thedelldays

[Hatch]

down to 3% base rate.

 

Hopefully my mortage lender will follow suit with a 1.5% drop.

[Scummer]

Only 10% of people with mortgages are on standard variable rates anyway.

 

Most are either on fixed rates, in which case this rate change doesn't mean much, or trackers, which means they will automatically get the 1.5% cut.

[St Landrew]

Yippee..! At this rate [geddit..?], my fast disappearing mortgage** is going to be non-existent.

 

**Fully variable.

[Johnny Bognor]

northern rock (who we all own a chunk of) are at 7.49% and (apparently) will not drop it!! I really feel for those with northern rock

 

So Gordon Clown and Alistair Dulling tell the banks to pass on the cuts and yet the one bank they are in control of, doesn't.

 

If I was one of the CEO's of the other banks, I would tell them to get rooted!

[Weston Super Saint]

Oh to be on a tracker.

 

 

Oh that's right I am

[TopGun]

down to 3.5% base rate...I wonder how much the lender will pass on if at all?

 

northern rock (who we all own a chunk of) are at 7.49% and (apparently) will not drop it!! I really feel for those with northern rock

 

So you think that the Rock won't drop its rates despite being owned by the state?

[St Landrew]

When I first took my mortgage out, interest rates were around 12-13%. I could get a fixed rate mortgage for 9% at the time, but decided to go for a fully variable repayment one. The interest rates rose to 15% and more, and I thought I'd made a boo-boo. But within the space of one year, the rate was below 9% and falling. The mortgage has spent the major part of its existence around 1, 2 and 3%, without the need for re-negoitation. At least I've got one decision right in my lifetime.

[Roman]

Oh to be on a tracker.

 

 

Oh that's right I am

 

Me too! Trebles all round!*

 

*(But given, the fact that the economy is otherwise f**ked for about the next decade, make those a single shot of shandy.)

[Weston Super Saint]

When I first took my mortgage out, interest rates were around 12-13%. I could get a fixed rate mortgage for 9% at the time, but decided to go for a fully variable repayment one. The interest rates rose to 15% and more, and I thought I'd made a boo-boo. But within the space of one year, the rate was below 9% and falling. The mortgage has spent the major part of its existence around 1, 2 and 3%, without the need for re-negoitation. At least I've got one decision right in my lifetime.

 

Who the hell did you get a mortgage with that was 1,2 and 3% - unless you work in a bank???

[Weston Super Saint]

Me too! Trebles all round!*

 

*(But given, the fact that the economy is otherwise f**ked for about the next decade, make those a single shot of shandy.)

 

Quadruples for me then as I rent the house out and the rental income more than covered the mortgage when the rate was at its highest

[Michelle]

5.9% fixed rate for another 9 years. Hmmm.

[Thedelldays]

Lloyds TSB have said they willpass the whole cut on....I hope this re starts the economy and gets confidence going again...

 

As I plan to sell (or hope to) in 2010...seeing as i bought it last spring I cant afford for prices to drop too much at all...

[Poshie72]

Me too! Trebles all round!*

 

*(But given, the fact that the economy is otherwise f**ked for about the next decade, make those a single shot of shandy.)

 

me as well

[stevegrant]

5.9% fixed rate for another 9 years. Hmmm.

Likewise, although only for another 3 years. However, I'm not too fussed. I know exactly what I'm going to be paying on my mortgage for that time, and don't have to adjust my spending habits accordingly.

[OldNick]

5.9% fixed rate for another 9 years. Hmmm.

Look at the get out costs, it may work out a lot cheaper to take the medicine and move into a better deal.

[Barfy]

down to 3% base rate...I wonder how much the lender will pass on if at all?

 

northern rock (who we all own a chunk of) are at 7.49% and (apparently) will not drop it!! I really feel for those with northern rock

 

what's really f*cking annoying is that Northern Rock offer reasonably discounted rates to new customers, but if you're an existing customer they'll do f*ck all even though you can't get a mortgage elsewhere at the moment and are stuck on their standard variable rate.

 

Nothing like getting repeatedly kicked while your down, eh? :mad:

[Draino76]

This 1.5% cut is a sign of very bad things to come on UK economic data. The BOE are clearly spooked by something; the next few months will show how bad UKPLC really is.

[Weston Super Saint]

This 1.5% cut is a sign of very bad things to come on UK economic data. The BOE are clearly spooked by something; the next few months will show how bad UKPLC really is.

 

Didn't they do it in line with the Central Banks of Europe and the American Federal reserve who all announced pretty similar cuts last week?

[Thedelldays]

i think it is an attempt to stop the chances of the decline like that seen in the early 90s..

 

going by what various people are saying in the media it might just work.....

 

some even say we will be back to normal by the end of next year...hope so..

[Saint Keith]

im on a tracker, so really pleased. i might even start making additional payments whilst the cost of money is so cheap

[stevegrant]

what's really f*cking annoying is that Northern Rock offer reasonably discounted rates to new customers, but if you're an existing customer they'll do f*ck all even though you can't get a mortgage elsewhere at the moment and are stuck on their standard variable rate.

 

Nothing like getting repeatedly kicked while your down, eh? :mad:

A huge amount of NR's customer base would fall into the "sub-prime" and "over-extended" brackets.

 

When I was first getting on the property ladder, they were offering me up to 125% of the value of the property at the age of 22. With those sort of deals floating around all over the place at the time, it's hardly surprising loads of people are struggling to afford to either repay or to move elsewhere because they're now in massive negative equity (and of course many of those people will have taken out interest-only mortgages in the misguided belief that house prices would never fall).

 

I eventually went for a similar offer with Coventry BS. In hindsight, a good decision!!

[Mole]

I'm gutted that the BOE has cut rates. I'm responsible with my money and owe nothing and have savings and an AVC linked to the BOE base rate. This move will cost me.:mad:

[Draino76]

Didn't they do it in line with the Central Banks of Europe and the American Federal reserve who all announced pretty similar cuts last week?

 

We cut by 0.5% a couple of weeks ago in unison with the rest of the world. This is a new cut, (although the Euro Central Bank is expected to follow today)

[Barfy]

A huge amount of NR's customer base would fall into the "sub-prime" and "over-extended" brackets.

 

When I was first getting on the property ladder, they were offering me up to 125% of the value of the property at the age of 22. With those sort of deals floating around all over the place at the time, it's hardly surprising loads of people are struggling to afford to either repay or to move elsewhere because they're now in massive negative equity (and of course many of those people will have taken out interest-only mortgages in the misguided belief that house prices would never fall).

 

I eventually went for a similar offer with Coventry BS. In hindsight, a good decision!!

 

in our case it's not a case of over extension, just as we went to re-mortgage 2 months ago, there were a couple of reposessions in our area which didn't sell at auction, therefore the surveyor assumed a massive drop in house prices, and put us out of even the 90% LTV bracket. Of course no other bank will touch >90% LTV mortgages now, so we're stuffed. Of course the more house prices fall the less chance we've got :mad:

 

When I spoke to Northern Rock about this, I said it was almost worth us deliberately defaulting on the mortgage. Their response was along the lines "if that's what you want to do, then that's up to you". It kind of summed up how interested they are in helping their existing customers.

[JohnnyFartPants]

in our case it's not a case of over extension, just as we went to re-mortgage 2 months ago, there were a couple of reposessions in our area which didn't sell at auction, therefore the surveyor assumed a massive drop in house prices, and put us out of even the 90% LTV bracket. Of course no other bank will touch >90% LTV mortgages now, so we're stuffed. Of course the more house prices fall the less chance we've got :mad:

 

When I spoke to Northern Rock about this, I said it was almost worth us deliberately defaulting on the mortgage. Their response was along the lines "if that's what you want to do, then that's up to you". It kind of summed up how interested they are in helping their existing customers.

 

Move in with parents and rent it out.

[OldNick]

i think it is an attempt to stop the chances of the decline like that seen in the early 90s..

 

going by what various people are saying in the media it might just work.....

 

some even say we will be back to normal by the end of next year...hope so..

that berk who does Dragons den who was the BBC financial guru was telling earlier this year , 'dont worry houses are not overpriced and there wont be a fall'. I wanted to throw a brick at the tv at the stupidity of his statement.

It will cost me financially as business is bound to get even harder. I cant see things improving for quite a time and if we see an upturn this time next year that will be a result.

The pound weakening will help my exports but the home market will be dead in the water.

Factor in that the majority of imports are paid in dollars and the pound has lost over 20% of its value and the cost of living is going up not down.

[OldNick]

This 1.5% cut is a sign of very bad things to come on UK economic data. The BOE are clearly spooked by something; the next few months will show how bad UKPLC really is.

Exactly, I would suggest that the government who are apart have been putting pressure on the bank to cut rates.It was their responsibility to keep the inflation rate under check, this has been thrown out of the window.

[Barfy]

Move in with parents and rent it out.

 

Similar to an option we're considering. I know you can rent semi-furnished, but how about semi decorated?

[Michelle]

Likewise, although only for another 3 years. However, I'm not too fussed. I know exactly what I'm going to be paying on my mortgage for that time, and don't have to adjust my spending habits accordingly.

 

Yeah, exactly why we did it. At the end of the day you know when you take out a fixed rate mortgage that the rate can go either way. You might end up better off, you might not, but having the security of knowing exactly what you'll be paying is more beneficial to us than just hoping for the rate to drop.

 

5.9% isn't too bad in the great scheme of things, bearing in mind how the rates were when we took it out, and what we could've been landed with if we hadn't shopped around!

[Ludwig]

It's not as though there isn't a lag with the interest rates anyway... but the inflation figures this time next year will be very interesting!

[Weston Super Saint]

It's not as though there isn't a lag with the interest rates anyway... but the inflation figures this time next year will be very interesting!

 

Yep, people like me with far more disposable income driving up the price of consumer goods

[saintwarwick]

We cut by 0.5% a couple of weeks ago in unison with the rest of the world. This is a new cut, (although the Euro Central Bank is expected to follow today)

 

They did with a 0.5% cut to 3.25%.

[mini_me]

Gonna mean around another £270 a month in my sky rocket.... which is bloody great after it going down £90 last month..... I just need to make sure I can keep working through the down turn.... mmmm

[Mole]

It's not as though there isn't a lag with the interest rates anyway... but the inflation figures this time next year will be very interesting!

 

Despite my inflation busting pay rise i don't envisage inflation being an issue under the current circumstances.

[Saint in Paradise]

Very bad news for people like myself with savings getting interest as those rates also drop :mad::mad:

 

BTW what is this thing called "mortgage" that you talk about ???

[AndyNorthernSaints]

Anyone else on here trying to sell their house :-(

[Guest Hacienda]

Anyone else on here trying to sell their house :-(

 

Gave up about 3 months ago and we've, today, taken it off the market.

[AndyNorthernSaints]

Gave up about 3 months ago and we've, today, taken it off the market.

Wish i could do the same but i'm still paying half a mortgage on a house i don't live in so am still hopefull the housing market will improve sometime :-(

[Scummer]

Heard a banking representative on the radio this morning saying that banks might not put rates down as it's all to do with the LIBOR (inter-bank lending) rates.

 

Interesting that the LIBOR rates don't seem quite so important when it comes to putting rates up, isn't it?

[Saint in Paradise]

Banks and Oil companies have a lot in common I think

[OldNick]

Heard a banking representative on the radio this morning saying that banks might not put rates down as it's all to do with the LIBOR (inter-bank lending) rates.

 

Interesting that the LIBOR rates don't seem quite so important when it comes to putting rates up, isn't it?

The governor of the BOE gave a speech a few weeks back and in it he worded it that the banks should get their margins back, and at the time I said that it was a message that he would allow them to screw us all to get them back onto their feet.

Some of my business collegues have been told that their unsecured overdrafts have gone up an EXTRA 4% and so they are paying 12-15% on the money.It will kill a lot of their businesses.

As for LIBOR I can see why they cant cut their rates as if they are borrowing for 6% they cant lend to others for 4%.

[stevegrant]

One important point to note from the whole "why aren't the banks passing on the interest rate cut to the consumer" debate:

 

Only a couple of weeks ago, the banks were getting slated for lending too much too cheaply in recent years, which has contributed to the "credit crunch" period we're now going through.

 

Now they're getting slated for making a more realistic assessment of the lending risk which involves not passing all of the 1.5% base rate reduction.

 

Surely we can't have it both ways?

[Weston Super Saint]

One important point to note from the whole "why aren't the banks passing on the interest rate cut to the consumer" debate:

 

Only a couple of weeks ago, the banks were getting slated for lending too much too cheaply in recent years, which has contributed to the "credit crunch" period we're now going through.

 

Now they're getting slated for making a more realistic assessment of the lending risk which involves not passing all of the 1.5% base rate reduction.

 

Surely we can't have it both ways?

 

Not to mention that most banks / building societies would have borrowed the money they lent out at rates between 4% and 6%.

 

I can understand why they are not jumping at the chance to make a loss of 1.5% to 3% on other people's mortgages and go bust.

 

Still, it's good to know you guys are subsidising my tracker mortgage!

 

[OldNick]

Not to mention that most banks / building societies would have borrowed the money they lent out at rates between 4% and 6%.

 

I can understand why they are not jumping at the chance to make a loss of 1.5% to 3% on other people's mortgages and go bust.

 

Still, it's good to know you guys are subsidising my tracker mortgage!

 

Not me.

I wouldnt gloat too much , its a marathon not a sprint and the average mortgage rate over the years is 8% and higher rates will return in the next few years.

[TopGun]

Happily my mortgage was switched to Abbey earlier this year and they are passing on the full 1.5% cut to customers.

[Weston Super Saint]

Not me.

I wouldnt gloat too much , its a marathon not a sprint and the average mortgage rate over the years is 8% and higher rates will return in the next few years.

 

I'm on a tracker as I'm not tied to any mortgage.

 

If they look like they're gonna rise big style, I'll get a fixed rate

 

In the meantime, happy to gloat!

[Draino76]

The expectations of our top guys (JPMorgan) is that UK base rates will drop to 1% by November 2009.

 

I would look to tie down a fixed rate mortgage around this time next year.

[Crouchie's Lawyer]

Look at the get out costs, it may work out a lot cheaper to take the medicine and move into a better deal.

 

There will be no way that the ERC's would be worth paying if its fixed for that long. Over the last few years, rates being relatively low coupled with lenders increasing the ERC's, mean that 99% of the time the ERC means it doesnt benefit changing the rate.

 

The expectations of our top guys (JPMorgan) is that UK base rates will drop to 1% by November 2009.

 

I would look to tie down a fixed rate mortgage around this time next year.

 

This is my plan. My rate ends the end of this month. I was fixed at 4.89% for 3 years and was fearing the end of my rate. C&G my current lender could only offer a fixed rate of 6.24% recently! Glad I shopped around, as I managed to get a tracker with HSBC at .89% above BOE so my new rate as of next month is 3.89%!! I managed to get the HSBC rate before they pulled all their best rates too!

 

The thing which annoys me is the lenders pulling the tracker rates knowing the base rate will fall. Greedy bar stewards.

 

Re your comment Steve, I agree, people were moaning that they were lending too much too cheaply, however, providing they keep their criteria strick and dont lend to people who wont pay their mortgage, it should be fine.

[Scummer]

I managed to get a tracker with HSBC at .89% above BOE so my new rate as of next month is 3.89%!!

 

Is there a lower limit on your tracker? I think I'm down to about 3.2% now, but there's a bottom line of about 3%, so I can't get much better than I am now even if rates fall again.