If B of E rates were 0%.....

caveman38

If as widely reported the B of E did reduce their rate to 0%. What would be the likely floor rate of mortgages.
I ask this as I have two sons who are as advised building a nice deposit and waiting for more house price reductions. But if mortgage rates were to follow suit and say reach 2%, would there not then be a stampede to get on the housing ladder. Or are Libor rates and inter bank borrowing rates likely to stay too high for that to happen.
What do you guys thingk will be the lowest possible mortgage rate and how will it affect the market?

koexelek

Only my personal opinion, but I could not see rates on new mortgages ever going below 3%.

They could on existing ones though, if people have trackers without collars

lisyloo

Well I can think of 2 immediate reasons why there won't be a stampede.

Firstly lenders margins have increased (and to be fair their costs have increased) so rates won't go that low.

Seocndly lenders are still very risk averse, so LTVs, income multilples, valutions etc. will all still be quite low.
If your sons are sensible and save a deposit it might work out well, but on the whole people are not going to be able to get easy money. It's going to be quite difficult.
The people who need it most e.g. FTBs, will not be able to get the best deals as those will be reserved for customers with <60% LTV.

silvercar

There are people around with lifetime trackers, linked to the BOE base rate, with no collar, that have rates as low as BoE minus 1%. If the Base rate became zero, these people would be paid to keep their mortgage!

payless

silvercar wrote: »

There are people around with lifetime trackers, linked to the BOE base rate, with no collar, that have rates as low as BoE minus 1%. If the Base rate became zero, these people would be paid to keep their mortgage!

did anyone find that deal .. I looked around for the 1.01 below base deal that was mentioned in the press via C&G - I found one and it was only a 2 yr deal ( but more importantly came with a 2.5% arrangement fee) , there were base less 0.76% with lower fees again 2 yrs

I'm sure there must have been term trackers below base , although I can't lay on my hands on anything less than 0.14% above

silvercar

Maybe there weren't any lifetime trackers, when would the 2 years run out? From memory could be next Summer?

I'm pretty happy on BoE+0.75 lifetime tracker, which was tagged on the end of my 4.99% 2 yr fix. I didn't know anything about it til it kicked in:)

payless

silvercar wrote: »

I'm pretty happy on BoE+0.75 lifetime tracker, which was tagged on the end of my 4.99% 2 yr fix. I didn't know anything about it til it kicked in:)

A&L ??

Maybe there weren't any lifetime trackers, when would the 2 years run out? From memory could be next Summer?

some of the better ones Jan 09,
then the fees began to increase - although its poss that those 2yr deals reserved mid 2007, but delayed start might go into 2010

michalp

I dont have any collar - Britannia Lifetime tracker- BOE+0.85%

Since I have it... 31/10/2008 my mortgage was reduced from £439 to £287 !!!

silvercar

payless wrote: »

A&L ??

Coventry BS.

payless

Oh yeah they had a few with that option ( more recently + 0.85%) also , suppose you got offset feature as well !!

djdaface

I will be looking for a mortgage in feb-april next year, anything 3% or below fixed for 5 years would be excellent, heres to hoping!