Why people want BoE rate to rise?

Really2

Cannon_Fodder wrote: »

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.)

Was it not over 5% a 1/4 or so before that. Perhaps what you are seeing is the delay from that.

So overpayment has increased since rates have dropped from their hight.

Really2

Cannon_Fodder wrote: »

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.

I took the risk and it cost me a lot to do it. I presume the pensioners who fixed or stashed sensibly also benefited.

I am paying off my mortgage quickly I thought the problem was the country debt.

Do you want me to pay the money back or not you seem happy with neither.

As for VI accusation I take it you did not read your previous post.:rolleyes:

What about the bold comment :eek: lots were working down pits and industry without a choice.

kennyboy66_2

hearts wrote: »

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).

Not a chance.

Really2

kennyboy66 wrote: »

Not a chance.

But as the economy get strong the spread will get nearer to historical norms (as lending competition increases). I think that is what the poster meant.

Cannon_Fodder

Really2 wrote: »

Was it not over 5% a 1/4 or so before that. Perhaps what you are seeing is the delay from that.

So overpayment has increased since rates have dropped from their hight.

When rates hit the low in 2003, 3.5%, HEW grew from £12Bn to £17Bn;

2003 Q1 12,731
2003 Q2 12,292
2003 Q3 14,523
2003 Q4 17,447
2004 Q1 15,764

Not many people overpaying...

Its the lack of equity plus changed sentiment that are the big factor in this turn around on HEW. Interest is a factor, just not the biggest one.

Really2

Cannon_Fodder wrote: »

Its the lack of equity plus changed sentiment that are the big factor in this turn around on HEW. Interest is a factor, just not the biggest one.

It is for going so negative.
Sentiment could have changed and everything would have levelled off HEW would have then likely to have done the same. It is not just an on/off tap (well it has been because of what as happened).

Thrugelmir

Cannon_Fodder wrote: »

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.)

From the figures you quote. The impact of the reduction of available credit is clearly illustrated through the quarters.

Thrugelmir

Really2 wrote: »

But as the economy get strong the spread will get nearer to historical norms (as lending competition increases). I think that is what the poster meant.

Historical norms will mean an increase in bank margins if that is the case.

The days of below 2% above BOE base have passed. (putting lifetime trackers aside). The norm is more likely to be 2.5% - 3% above for average borrowers.

1984ReturnsForReal_2

skap7309 wrote: »

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.

Hmmm

Agreed to a point.

But a larger % dont live off their savings.

& the rest depends on what your saving for.

Cannon_Fodder

Really2 wrote: »

As for VI accusation I take it you did not read your previous post.:rolleyes:

What about the bold comment :eek: lots were working down pits and industry without a choice.

I stated my VI in my first post on this thread. Not many others have...

So those who worked down pits are all zero-savers?

No-one down the pits, suffered in that industry AND was sensible with what little money they got?

Where the hell did you get evidence for that? Of course you didn't, you are just sensationalising to try and score points.

MY point, is that we need to forget the hardship, or not, that pensioners had in their lives, because there are frugal coal-miners and extravagent coal-miners, or extravagent directors and frugal directors, or whatever.

It comes down to they are where they are, now...and those who saved were planning on using their lump sum gradually over the course of the twilight of their lives - and are now being made to use it up more quickly. So when the rest of country "goes back to normal", their lump sum will have eroded and they will then become a burden on the taxpayer - often unnecessarily.

Those who didn't save are probably in council-paid accomodation, not having the greatest retirement lifestyle perhaps, but it isn't any worse because of IRs.

It will be worse when cuts hit services because of the debts the Govts run up, but that's a whole new argument...