MSE News: Base Rate 'to stay frozen until 2011'

Former_MSE_Guy

This is the discussion thread for the following MSE News Story:

"Interest rates could stay on hold at their 0.5% record low throughout this year and well into 2011, it is claimed ..."

Read the full story:
Base Rate 'to stay frozen until 2011'

Cleaver

I read the thread title and thought, "2011?! Surely rates can't stay this low for years and years!" before realising that 2011 is 10 months away. Where is my youth going? How did we get to 2010? Where did 2005-10 go? Should I give up my dreams of making my living as a rockstar?

Apoligies Guy, this is rather off the original topic of interest rates, but this seems a tad more important.

markl66

It sucks for saving though! Better to have a mortgage than save money, strange what the government is encouraging us to do?!

Harry_Powell

You've got to feel sorry for all those people who are trying to put together a deposit on a house. A combination of crappy interest rates on their savings and HPI is eroding their hopes to ever get onto the housing ladder.

lol. same old 'I'm alright jack' attitude from the comfortable, ruling classes.

nollag2006

markl66 wrote: »

... strange what the government is encouraging us to do?!

There is no hidden agenda here. The government isn’t encouraging you to do anything around housing.

The benefit is though that, as a nation, housing is now more affordable than it has been for years, and is likely to stay so as more low deposit mortgages come on stream.

The net result is that more people can afford to buy their own homes, and they become less reliant on private landlords and the government.

Not social engineering by any means, but low interest rates for the medium are great for an economy like ours coming out of recession

Oh – and its really lovely that I got a BR tracker back 3 or 4 years ago too



:T:T:T:T

BargainGalore

And SVR
.....

Desertfox wrote: »

Good news for people with trackers. :T

mintedmatty

Mixed news, great for mortgages, dire for savings! Spread the word of MSE to make most of all the loop holes and advice to maximise your interest!!!!

Cleaver

nollag2006 wrote: »

There is no hidden agenda here. The government isn’t encouraging you to do anything around housing.

You don't think that the stamp duty holiday was a measure specifally designed to encourage people to buy houses?

HAMISH_MCTAVISH

Harry_Powell wrote: »

You've got to feel sorry for all those people who are trying to put together a deposit on a house. A combination of crappy interest rates on their savings and HPI is eroding their hopes to ever get onto the housing ladder.

lol.

Interest on deposits, for FTB category houses anyway, has traditionally been unremarkable at best though.

Say a saver takes 2 years to save a deposit.....

A formerly typical 10% deposit, on a typical FTB property of around 100K, would only be generating around £350 a year in interest after tax even when interest rates were up at four or five percent. And thats only if you had the full amount in the bank for a full year. If it took you 2 years to save it up, you'd be looking at around that for the 2 years combined.

Whereas 5% HPI would add another £5000 to the cost of the house the first year, and another £5500 the second year.

So HPI is the bigger factor by far. And why 100% mortgages were such a blessing for people in most of the boom years. (2007 possibly excepted..;))

Emy1501

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/7205865/Mortgage-rates-to-rise-as-Mervyn-King-rules-out-liquidity-scheme-extension.html

Oh well. If you have a mortgage already you will probably be alright as long you are on one those rates where the SVR cant go a certain percent above base rate or life time tracker. Otherwise I suspect people will be in trouble.

The people feel for are all those who have taken out the interest free 5 year new build deals who all think they will be able to remortgage in 5 years or so

Intergalactic_Floozie

As a DWF with a "breath again" date of 24 months, I hope the interest rates stay low for as long as possible. Every month I wait with baited breath for news of what the BoE are going to do that month with regards to putting them up / staying the same.