INTEREST RATES down to 1%???????

james3333

http://www.telegraph.co.uk/finance/economics/interestrates/3211785/Financial-crisis-Interest-rates-to-hit-lowest-level-since-1694.html

if this happend, what sort of rates would banks go as low as for mortgages?... AND WHAT SORT OF MORTGAGES WOULD THEY OFFER?.....surely, everyone would just opt for a fixed rate if they went down to say 2.5%

cheers

Wutang_2

I don't know!!!!!! But WOW what a prospect!!! I WOULD OPT FOR A FIXED RATE IF IT WENT DOWN TO 'SAY' 2.5%

lisyloo

surely, everyone would just opt for a fixed rate if they went down to say 2.5%

No, no no.

Fixed rates are based on what rates lenders can get wholesale and this is based on what those bankers think will happen to rates.
If rates go low temporarily then it's unlikely to affect fixed rates hugely because anyone offering say a 5 year or 10 year rate has to consider the WHOLE period.

Plus, whilst this wouldbe good for osme people with BOE trackers, many have a FLOOR, so you need to check your own mortgage for this.

Plus lenders (whom you might have noticed are struglling right now) will use the oopportunity to increase their margin.

It willof course mean rates are lower, but don't expect fixed rates to drop stupendously low, because it ain't gonna happen.

Locoblade

They wouldnt offer any new deals that low, because as has been mentioned on here numerous times, mortgage rates are primarily set by LIBOR rates (the rates that banks lend to each other at), not BoE base rate. Also trackers generally have a "floor" level where they won't drop below say 3.5% even if the BoE goes below that, so even those on existing tracker deals wouldn't benefit it it went really low.

foreversummer

Anybody know what the floor is for Woolwich tracker mortgages? Mentions nothing in my mortgage offer, nor in the Mortgage Terms and Conditons that I can see?

Foreversummer

mkcj

Same question as above but for Alliance and Leicester. I cannot find any details in my terms with regard to a floor. Does anyone know if there is one?

lisyloo

Nationwide have a floor on their website.

If the Bank of England base rate is 2.75% or less during the tracker period, the rate you pay will track a rate of 2.75% until the base rate rises back above this.

GOLFER

I have just applied for a C+G tracker and cant see anything if the documents thast states about a lower B of E rate. It does state that the Variable rate would not go higher than base + 2%.

Does anyone know if they have a lower rate limit?

thanks

silvercar

My trackers don't have floors!

gonnagetdebtfree

I have a C&G mortgage. My fixed rate ends in May... when I'll be forced to stay on the bog standard variable - they tell me 'indexed area pricing' means I've lost £5k or more on my home. I've no way of checking this. The result is I still owe 100% of the value of my home after 2 years!!!! Depressing thought.

I wonder whether this predicted massive drop will help me?

My fixed rate is 5.95% till May.
But if the BoE interest rate drops to less than 4% I'll SHOULD get a BETTER deal than my current fixed rate, as C&G stay 2% above the BoE.

1) Do C&G have a 'floor'?
2) If I owe 100% or more (again!) according to C&G, can I question this valuation? (Unless I can prove I own 90% of my house I'm locked into C&G, right?)

midflight

Do First Direct's trackers have floors?