UK interest rates down 1.5% to 3%

[Claire L]

Wow that is some drop!

BBC news

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

 

[Joanne UK]

Until this drop interest rates were 4.5% but my mortagage lender charges me 6.8% . 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% . 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% . 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

 

[jjk]

thats good news

 

[PoppyAnna]

great news

thats good news

Not for savers, it's not

 

[oceanscape]

Great news!

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....

 

[Goofyish]

Not for savers, it's not

Savings 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

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

 

[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.