Debate House Prices
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Base rate could be at 0.5% untill the end of 2011
Really2
Posts: 12,397 Forumite
http://www.forbes.com/feeds/afx/2009/08/12/afx6769474.html
Interest rates are likely to remain lower for longer than the markets expect. Even assuming Bank Rate at 0.5 percent until the end of 2011, the bank expects inflation to undershoot the target rate until the final quarter of 2011 (again, excluding the VAT spike).
Looks like we are going to be doing a long payback rather than high inflation to "downsize" the debt.
It will be interesting to see what this does. Good and bad, debt will remain fairly cheap to service but this also indicates low/negative inflation. This will mean wages will remain fairly static at best.
Interest rates are likely to remain lower for longer than the markets expect. Even assuming Bank Rate at 0.5 percent until the end of 2011, the bank expects inflation to undershoot the target rate until the final quarter of 2011 (again, excluding the VAT spike).
Looks like we are going to be doing a long payback rather than high inflation to "downsize" the debt.
It will be interesting to see what this does. Good and bad, debt will remain fairly cheap to service but this also indicates low/negative inflation. This will mean wages will remain fairly static at best.
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Comments
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lets hope so
cheap mortgage payments 0 -
I wonder if fixed rate mortgages will come down in price?"I can hear you whisperin', children, so I know you're down there. I can feel myself gettin' awful mad. I'm out of patience, children. I'm coming to find you now." - Harry Powell, Night of the Hunter, 1955.0
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If they could guarantee what the base rate would be lenders could set rates accordingly.
Shame it's not possible.0 -
Good news for tracker customers...I am relying on this to overpay as much as I can on my mortgage!!!
As for fixed rate mortgages surely if rates are too high then people will opt for trackers but I can't see the fixed rates dropping too far (maybe to 3%?)MFiT - T2 # 64start date: 1.7.09 MFW end date: 31.10.17
Start balance: £205,746.51 :eek: Month 18/100..paid 13.50%
Current balance: £177,977.07 (updated 18.12.10)
Target 12.12.12: From £194,000 to £140,000:p
MFI-3 reductions: £16,023/£54,000 achieved (29.67%):j0 -
Harry_Powell wrote: »I wonder if fixed rate mortgages will come down in price?
I can't see any rates coming down until they are happy they have rebuilt their balance sheets sufficiently.0 -
Harry_Powell wrote: »I wonder if fixed rate mortgages will come down in price?
Cost of retail deposits is still rising........
Savers are fighting back.0 -
THRIFTY_GIRL wrote: »Good news for tracker customers...I am relying on this to overpay as much as I can on my mortgage!!!
As for fixed rate mortgages surely if rates are too high then people will opt for trackers but I can't see the fixed rates dropping too far (maybe to 3%?)
Only those on lifetime trackers. For others it means a new mortgage deal.0 -
I was going to say the same thing, not many people on over a two year tracker.Thrugelmir wrote: »Only those on lifetime trackers. For others it means a new mortgage deal.Freedom is not worth having if it does not include the freedom to make mistakes.0 -
Lotus-eater wrote: »I was going to say the same thing, not many people on over a two year tracker.
One here 0 -
Thrugelmir wrote: »Cost of retail deposits is still rising........
Savers are fighting back.
Wondering if it is more a case of customers being fought for by these institutions?It's getting harder & harder to keep the government in the manner to which they have become accustomed.0
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