Interest rates cut to 1%, what does that mean for us?

hur575

http://www.guardian.co.uk/business/2009/feb/05/interest-rates-cut

The question in the title, so what does that mean for us? I have a loan which is 2% above base rate, at that time base rate was 4 i think, do i have less monthy payment now? but with all the cut of rates nothing changed with my payment so far.

Robert_Sterling_3

It depends on the terms & Conditions of your loan among other things.

talana

Well, which sort of loan is this and who with?

Most loans are fixed rate, so for those it means absolutely nothing.

hur575

Mine is professional study loan which I took for my PhD from Barclays, it was stated as 2% above the base rate. When the rate was up, my payment was going up, now that is down, nothing has changed.

sdooley

hur575 wrote: »

Mine is professional study loan which I took for my PhD from Barclays, it was stated as 2% above the base rate. When the rate was up, my payment was going up, now that is down, nothing has changed.

I would get on the phone to Barclays! It might be tied to Barclays Bank base rate rather than Bank of England, or there might be a 'cap and collar' arrangement, or maybe they don't reduce the payment but reduce the interest charged (so you'd pay the loan off quicker). Or it could be a bodge-up. Got to be worth asking the question though...

BenL

It might be reviewed differently as well, i believe on barclays mortgages they review the payments once a year and take the IR at that date to set the next years payments.

You can call them and ask them to do it manually though.