Why people want BoE rate to rise?

movilogo

I don't understand why people overpay when they can get 5+% interset on savers

Savings using this logic only useful if you have entire money to pay off mortgage but decided to put that on savings a/c instead.

For most of us, the amount available for saving is much less compared to outstanding mortgage amount. So, it makes sense to reduce mortgage via overpayment.

Really2

Old_Slaphead wrote: »

Anybody with a bit of nous should have been getting 6-7% interset on savings until fairly recently. Even now 3.3% for instant access is available. Shouldn't need to forgo a cruise this year

Oh, you could of got a lot of support and simpathy on here if you said you have just had to set the cat on fire to heat the house

Enjoy the cruise.;):D

But you are spot on savings in general are over BOE base and more importantly inflation.

skap7309

1984ReturnsForReal wrote: »

Higher rates would see hundreds of thousands of houses repossessed.

It would also mean hunderds of millions more paid in mortgage benefit by the taxpayer to the banks.

It also encourages people to save NOT spend therefore not keeping the money flowing.

If you want to cause a shed load of pain its a good idea to put rates up.

But it will do nothing but harm to the economy.

Hmmm, the above is a bit sensationalist and with regards to the bold part the less i earn in interest on my savings the longer it takes to save my target and the longer i take to start spending again. The same goes for people living off their savings, the rate cut means less income for them and so they spend much less. It works both ways.

Really2

Thrugelmir wrote: »

and may have suffered the 3 D's through life.........

I could never get on with those coloured plastic glasses either.:)

Cannon_Fodder

IveSeenTheLight wrote: »

Pensioners earnt their savings, they should utilise it as they wish

Exactly. Use it as they WISH, not out of necessity.

I deliberately used "small amount of capital" to imply I'm not worried about those who go cruising every year. Of course they are further down the priority list.

There are pensioners with perhaps £20k who need that to last perhaps 10 or more years, to supplement their pensions.

And that small nest egg can prevent them from being eligible for some benefits - so those with NO savings are often better off.

For property speculation to be supported at the expense of those who worked their whole lives to put away a small nest egg, can only be justfied by those with a vested interest.

Really2

Cannon_Fodder wrote: »

There are pensioners with perhaps £20k who need that to last perhaps 10 or more years, to supplement their pensions.

And that small nest egg can prevent them from being eligible for some benefits - so those with NO savings are often better off.

For property speculation to be supported at the expense of those who worked their whole lives to put away a small nest egg, can only be justfied by those with a vested interest.

Fail to see your point.
So if they use it they will be means tested then there pension will be boosted to the same level as the others.

The last paragraph you have no VI I presume. :rotfl:
What about the economy, jobs etc. do those people not count or should they all be sacreficed for [STRIKE]you[/STRIKE] pensioners?
Why would you put rates up when inflation is 1.6% and falling?
As I have said before to may there is plenty you can do.
http://www.ageconcern.org.uk/

Unfortunately most people concern is only backed up by words.
From there no VI position of course.:rolleyes:

kennyboy66_2

movilogo wrote: »

Savings using this logic only useful if you have entire money to pay off mortgage but decided to put that on savings a/c instead.

For most of us, the amount available for saving is much less compared to outstanding mortgage amount. So, it makes sense to reduce mortgage via overpayment.

Because if you are a higher rate tax payer and are on a fixed rate but can make some over-payments without penalty then it is close to unbeatable to overpay.

I'm on a 4.94 fixed and can overpay upto £500 per month.

Unless you can find me somewhere I can get 8.23% interest, I will stick with overpaying.

In addition, the overpayments are earning 4.94 after tax until the fixed term ends. Most striking deals such as HSBC revert to a rubbish rate after a year. The maximum average amount where you can get 8% before tax is only £1500 in one year.

The HSBC account is good, except you need to pay for a current account with them to get it. Interest of approx £120 - bank charges of £135.
I'm out.

Cannon_Fodder

Really2 wrote: »

was it £8bn overpaid last quarter, I would say that would mainly be people on trackers, would you?

IveSeenTheLight wrote: »

So that would mean that 47% of tracker are overpaying their mortgages
Still a significant number

Q3 08, -£5.7Bn was being repaid BEFORE the rate dropped below 4.5%.

Those benefitting from tracking/svr, might account for a fair portion of the £1.5Bn difference since then, but as rates didn't hit rock bottom until Feb, shouldn't Q2 09 still have been growing if interest was the biggest facter...?

(one quarter was £8Bn, there was a revision.)

hearts

Suely BOE rises in the medium term wont have a great effect on new mortgage rates. Rates for mortgages are still very high in comparison to the BOE rate and Libor rates. The lenders might well absorb the first couple of points. Of course people on Trackers etc would lose ( I am one).

Cannon_Fodder

Really2 wrote: »

So if they use it they will be means tested then there pension will be boosted to the same level as the others.

Once spent it gone. They might need their lump sum, to replace a car, boiler, etc.

The zero-savings pensioner has chosen that life, too...maybe they don't drive any more, maybe they rent so the council fixes the boiler, its not black and white...

...there will be losers in all camps, of course.

For those rapidly paying off their mortgage to crow about/enjoy their good fortune, and in the next breath accuse others of vested interest, just makes my point for me.