Mortgage Rates next Year

neverdespairgirl

confused31 wrote: »

your lucky to have savings mate, not a lot of people have got savings.

having savings isn't just about being lucky.

GDB2222

Generali wrote: »

And to me. I think the UK's housing stock is 'worth' about £3,000,000,000,000.

According to The Times today the total liabilities of the UK banking system are £4,100,000,000,000.

Yes, you're right.

Generali

StevieJ wrote: »

Never heard of trackers? Never heard of falling commodity prices?
Falling rates WILL be passed on just may take a little time.
As an example I only have a small mortgage but the rate is BaseRate + 0.95 as the normal rate.

Well as with so many things in this world it's a little more complicated than that.....................

Most tracker mortgages track the bank's own base rate. Usually that is the same thing as the BoE base rate but it needn't be. If something out of the ordinary was to happen like ooooh a massive banking crisis which meant that the cost of funds to banks (let's call that LIBOR) was to rise excessively then perhaps the banks could still increase the cost of borrowing.

mikeriley_2

Quick question. If i were to take out a tracker mortager at say BOE +0.89%, now, and next month (or in any of the following months), the mortgage lender increases the tracking element to say 1.39% above BOE, will in the following months i retain the +0.89% tracking element (as that is the rate when i sign up to the mortgage) or would i move on to the 1.39% tracking rate?
thanks
mike

Generali

mikeriley wrote: »

Quick question. If i were to take out a tracker mortager at say BOE +0.89%, now, and next month (or in any of the following months), the mortgage lender increases the tracking element to say 1.39% above BOE, will in the following months i retain the +0.89% tracking element (as that is the rate when i sign up to the mortgage) or would i move on to the 1.39% tracking rate?
thanks
mike

AIUI you retain the 0.89%. I suspect that you will find that you're not really tracking the BoE base rate though if you check the T&Cs. If the BoE slashes rates to 1 % or 0% you might well find that your tracker rate starts to track something else!

mystic_trev

Most BofE Trackers won't fall below a minimun Interest rate 2.75% (Nationwide) or 3% most other Lenders.

HammersFan

mystic_trev wrote: »

Most BofE Trackers won't fall below a minimun Interest rate 2.75% (Nationwide) or 3% most other Lenders.

So at BoE +1% that's 3.75-4.% meaning that every 120k borrowed is going to cost £400 / month in interest. That's "buying cheaper than renting" terriatory by quite a margin.

Generali

HammersFan wrote: »

So at BoE +1% that's 3.75-4.% meaning that every 120k borrowed is going to cost £400 / month in interest. That's "buying cheaper than renting" terriatory by quite a margin.

It depends what happens to rents of course. I suspect they are going to drop a long way.

HammersFan

Why's that Generali?

Generali

HammersFan wrote: »

Why's that Generali?

As this thing all plays out there will be a lot of people losing their jobs and so relying on benefits.

The welfare bill will need to be cut IMO as we've only seen the start of our problems. What do you think has happened to company pension schemes as a result of the stock market falling by 44% in a year? They'll need bailing out. Then there's the insurance industry. A lot of those guys have been writing CDSs AIUI at least. They'll be looking for a bailout too.

The easiest bit of the welfare bill to cut is housing benefit as the Government is paying money to 'Greedy Landlords' etc. Also I believe that changes have been made to housing benefit so the tenant gains if there is a reduction in rent. That's pretty handy if you're trying to live on fifty quid a week.