BoE cuts rates to 3.0%!!!

IveSeenTheLight

ginvzt wrote: »

Here we go, a shocker, a huge slash in the rates down to 3.0%!!!!!

http://www.forexfactory.com/calendar.php

What is going to happen next?????

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

It was quite a shock to me.
I thought that going by previous rises / drops, it would be a 0.5% drop.
This was backed up with the banks pre-empting the drop and raising rates by 0.5%

I wonder if part of the decision for such a high drop was that the banks were fighting passing it on to the customers.

It'll be interesting to see how the banks react.

A 2% interest rate drop in 2 months will have a massive affect on those with tracker mortgages.
2% of £200,000 is £4,000 interest per year, or £333 per month saving

Conrad

C & G (part of Lloyds which bought HSBOS) announced the full rate reduction WILL be passed onto thier stansard variable rate

I'm seeing all tracker products being suspended today in order lenders can take stock, see what competitors do and then re - introduce new ranges.

RATE DROPS WILL BE PASSED ON, so the extent general retail rates for mortgages will fall.

Will a lot more people buy houses rather than rent due to this? Yes of course they will.

Does increasing unemployment make a huge difference. I dont think so, especially here in the SE

Car sales have fallen 20% - is that really that bad considering the sentiment out there. No not really.

Really2

carolt wrote: »

"Get the pig"????! Not heard that one before!

Anyway, times will get pretty tough for all those about to retire/living off savings etc - due to 5% inflation and 3% base rates, your savings are worth less by the day just in the bank.

Wonder how quickly the cuts will be passed on to savers?

Inflation will be down soon enough. Unfortunatly the majority of pensioners do not have savings to live on.
But they will get a 5.2% pension increase as it is Octobers inflation their next years pension is set on.;)

purch

Does it mean we can have 4-4.5% mortgage fixed for 10 years?

Nope.

A 10 year Mortgage Rate has even less to do with the BOE Base Rate than SVR.............10 year rates will go through the "roof" with all the borrowing HM Gov is about to do........and this cut will only make things worse for the Credit Markets

mattwallisuk

I took a mortgage approx 2 months ago on BoE tracker 0.69 above base... we have been in the house approx 1 month and already our monthly payments are down over £400 quid a month... laughing all the way to the bank!

carolt

To quantify this, does anyone know the percentages of mortgages on existing trackers?

Anyone?

carolt

Really2 wrote: »

Inflation will be down soon enough. Unfortunatly the majority of pensioners do not have savings to live on.
But they will get a 5.2% pension increase as it is Octobers inflation their next years pention is set on.;)

I was thinking of those about to retire, already hammered by stockmarket falls. Are annuity rates not based on base rates?

Pobby

If I was buying right now I would be factoring interest rates at some point in the life of the mortgage to return to 6%++. I wonder how many people will do that?

Really2

carolt wrote: »

To quantify this, does anyone know the percentages of mortgages on existing trackers?

Anyone?

Hi Carol I heared the last cut 2.5 million ish on tracker rates.
Add to that 12% more applications for them last month alone.

WTF?_2

Pobby wrote: »

If I was buying right now I would be factoring interest rates at some point in the life of the mortgage to return to 6%++. I wonder how many people will do that?

No, no, no.

Interest rates only ever go down, innit?


It's the new mantra of the fiscally clueless