UK interest rates down 1.5% to 3%

[Claire L]

Wow that is some drop!

BBC news (http://news.bbc.co.uk/1/hi/business/7713006.stm)

Claire ;)

[mandymouse]

I just heard that on This Morning. That's quite a drop. We just need the Gas and Electricity Companies to drop their prices and then things will start looking up a bit :thumbsup2

[Joanne UK]

Until this drop interest rates were 4.5% but my mortagage lender charges me 6.8% :confused3. I thought the two tallied but obviously not. I'd never even noticed this until the credit crunch started.

[tennisfan]

Until this drop interest rates were 4.5% but my mortagage lender charges me 6.8% :confused3. I thought the two tallied but obviously not. I'd never even noticed this until the credit crunch started.

Many mortgage lenders usually have it written that they will never be more then a certain % above the BofE base rate.

Lloyds TSB have confirmed they will pass on the full rate reductions to all of its mortgage arms, whilst many of the others have stated they are considering what they are going to do.

The problem still is that banks are having to borrow from other bank at a higher rate then the BofE rate due to the lack of physical money being available to move around. Therefore I would be surprised if they all passed on the full discount.

[Boss Hogg]

Until this drop interest rates were 4.5% but my mortagage lender charges me 6.8% :confused3. I thought the two tallied but obviously not. I'd never even noticed this until the credit crunch started.Depends what your mortgage is, most mortgage lenders have a Standard Variable Rate, which is set by them and does not equate to the same as base rate. Some tracker mortgages will be a %age above base, and clearly these would always track base - hence the clever name!

[wilma-bride]

Goodness me, that almost makes me wish I had a variable rate mortgage now.

[natalielongstaff]

great news :cool1:

[jjk]

thats good news

[PoppyAnna]

great news :cool1:

thats good news

Not for savers, it's not :sad2:

[oceanscape]

Great news! :thumbsup2

Our fixed-rate mortgage ends soon, hopefully there will be some deals around despite the credit crunch.

[Graeme]

I fell really lucky at the end of my last mortgage's discount period and my financial adviser put me into a tracker while I waited for a good deal. That was just before the words 'credit crunch' started to hit the papers and fortunately i've had every cut passed straight on. This should save me about £120 a month, which makes up for the bad exchange rate.

[paulh]

sadly for us we would like intrest rates higher,as we have no mortgage and with this drop there is less return on our savings.there are always 2 sides to everthing.
Paulh

[PoppyAnna]

sadly for us we would like intrest rates higher,as we have no mortgage and with this drop there is less return on our savings.there are always 2 sides to everthing.
Paulh

Same here.....and don't get me started on the stock market....:headache:

[Goofyish]

Not for savers, it's not :sad2:

Savings :confused3 What are they LOL

[paulh]

I fell really lucky at the end of my last mortgage's discount period and my financial adviser put me into a tracker while I waited for a good deal. That was just before the words 'credit crunch' started to hit the papers and fortunately i've had every cut passed straight on. This should save me about £120 a month, which makes up for the bad exchange rate.

personly i would keep my payments the same,use the £120 to pay off the capital,then you would see that £100,00 mortgage come down
Paulh

[Graeme]

personly i would keep my payments the same,use the £120 to pay off the capital,then you would see that £100,00 mortgage come down
Paulh

It'll probably go into my multifunds. Another silver lining is that it's a good time to buy. Either that or I'll just waste it on beer!

[mark&sue]

We are pleased. Although half our mortage is fixed rate (it ends next year) the other haf (which we bought our place in Spain with) could not be fixed so we are really happy. We will continue to pay over and above the amount we should be paying so hopefully we can bring down the years and hopefully retire to Spain sooner than later and let our house out that we have in London.

As previously mentioned it makes up for the awful exchange rates we are getting for our DVC in USA and our second home in Spain.

Can't wait to be a saver because although the interest rate is low at least we won't have to be paying loads in interest as we are doing now as well as paying off the mortgage.


Susan

[natalielongstaff]

Not for savers, it's not :sad2:

True ! not many of us are able to save much at the minute tho :confused:

[PoppyAnna]

I agree, Nat. With one income, we're not able to save as much as we used to.
I think that low interest rates have an unfortunate affect on groups like pensioners who now probably don't have a mortgage and have saved a bit for their retirement and not only has their pension fund dropped because of the FTSE but their regular savings are dropping and so is their income and they suffer the most with the high heating costs. I think Mr Brown and Co needs to think about the implications of lowering the rates so much yesterday.
Afterall if we didn't have savers the banks wouldn't have had all that dosh to lend in the last few crazy years!

[oceanscape]

I agree, Nat. With one income, we're not able to save as much as we used to.
I think that low interest rates have an unfortunate affect on groups like pensioners who now probably don't have a mortgage and have saved a bit for their retirement and not only has their pension fund dropped because of the FTSE but their regular savings are dropping and so is their income and they suffer the most with the high heating costs. I think Mr Brown and Co needs to think about the implications of lowering the rates so much yesterday.
Afterall if we didn't have savers the banks wouldn't have had all that dosh to lend in the last few crazy years!
I disagree. This rate drop was needed to put some liquidity back in the system, especially in the face of falling house prices. Thousands of people are now going into negative equity, the government needs to step up and sort the mess out - lowering the interest rate is one way to do this. TBH, saving has not been particularly high on the agenda for most people in recent years - not only due to increasing costs, but also because it has largely been pointless given inflation levels. After you've accounted for the interest earned to counteract inflation, not much is left.

Further rate drops are expected at the next MPC meeting, and will be welcomed by most once again.

[PoppyAnna]

I disagree. This rate drop was needed to put some liquidity back in the system, especially in the face of falling house prices. Thousands of people are now going into negative equity, the government needs to step up and sort the mess out - lowering the interest rate is one way to do this. TBH, saving has not been particularly high on the agenda for most people in recent years - not only due to increasing costs, but also because it has largely been pointless given inflation levels. After you've accounted for the interest earned to counteract inflation, not much is left.

Further rate drops are expected at the next MPC meeting, and will be welcomed by most once again.

Thats a lot of the problem. Short term is what most people have been concentrating on. Perhaps people should have been saving a little bit more rather than spending obsurd amounts of money on consumer items. I understand that we have to spend but comsumer debt has increased the same amount in the last five years than it has since records began! Thats is a shocking statistic. In addition, if you actually study food prices, for example, they were at an all time low until the cost of moving food around went up, and we've become so dependant on runner beans from Kenya that we can't remember how to shaop and eat locally. In fact, people have had their essentials reletively cheap in the recent years, until a year or so ago.
As for negitive equity, house prices have risen extremely sharply in the last nine years, and these things are generally cyclical, I'm afraid it had to go down at some stage and your house should always be considered one thing - your home, a home you can sensibly afford. If you're using it to make money too, then there is always a risk you will lose. I'm all for taking risks, but never with the roof over our head. Mortgage lenders have given the average earner an absured amount of money to buy a home as there was no other way of getting on the ladder as the prices were so inflated.
I just think it's a shame on the savers that haven't gone out and bought flat screen TV's, Wii's etc that people seem to be addicted to purchasing and they're the ones that have been sensible and are now suffering......
Not mine, but nearly all kids these days has a Wii, Playstation, DS, flat screen TV's, expensive mobile phones as well as the family PC and the laptop etc.. I'm not against these things (we are in fact getting a Wii as a gift for christmas this year, but is a gift for our whole family) I just think it's out of control, and some people should have reeled it in a bit and shouldn't now be complaining that the cost of essentails have gone up and they now can't afford them.
It may sound really old fashioned to some of you but I feel if we bring up a generation a spoiled children that don't understand money and the need to sometimes wait for things we'll never get out of this credit mess.
I'm afraid the rainy day came.
I'm not pointing the finger at anybody on here.
Rant over.
Peace and Love:)