Interest-free Mortgages Loom - So what about Savings!?

Andrew64

This article is in today's Daily Telegraph:

Bank of England interest rate cut: Era of interest-free mortgages looms, experts predict

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/4177298/Bank-of-England-interest-rate-cut-Era-of-interest-free-mortgages-looms-experts-predict.html

If this can really happen for the mortgage rate, what about the savings rate? Will that also become 0% or even negative?

oldandgrumpy

I wonder whether I should take out an interest free morgage on our unmortgaged house instead of using a monthly savings account?

nicko33

This is only going to, possibly (depending on the lawyers), affect a small number of people with certain mortgages.

"Financial experts said some borrowers with tracker mortgages could see their rates drop to zero"

some

"The majority of borrowers with a tracker deal pay the bank rate, plus a percentage on top. But some deals available just over a year ago allowed borrowers to pay the bank rate minus a percentage. "

Don't expect to be getting any more of those deals any time soon


Like stories of negative savings interest, it is mostly a shocking headline to grab your attention.

JimLad

Savings accounts will never have negative rates because people will withdraw all their money and banks will have no money to lend

jimclark1967

We managed to get a tracker mortgage in August 2007 at BOE minus 0.26%

Great at the moment with base rates now 1.5% compared with 5.75% back then but the deal was only for 2 years so not long left now - c'est la vie.

cos69

Andrew64 wrote: »

This article is in today's Daily Telegraph:

Bank of England interest rate cut: Era of interest-free mortgages looms, experts predict

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/4177298/Bank-of-England-interest-rate-cut-Era-of-interest-free-mortgages-looms-experts-predict.html

If this can really happen for the mortgage rate, what about the savings rate? Will that also become 0% or even negative?

The savings market is international, so if that happens many will simply move their savings elsewhere. If you bank with Santandar (Abbey, A&L B&B), ING etc then you might as well move to one of their accounts outside the UK if that enables you to get good returns (well good enough to off set exchange rate risks)

cocktail

cos69 wrote: »

The savings market is international, so if that happens many will simply move their savings elsewhere. If you bank with Santandar (Abbey, A&L B&B), ING etc then you might as well move to one of their accounts outside the UK if that enables you to get good returns (well good enough to off set exchange rate risks)

i suspect this would have already started with people with large sums to save.