MSE News: Base rate held at 0.5%

Former_MSE_Guy

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

"The Bank of England today announced it is holding the base rate at its 0.5% historic low for the 17th consecutive month ..."

Read the full story:
Base rate held at 0.5%

edinburgher

No surprises there then! I've read a few reports suggesting that we won't be looking at it rising until next Easter or later.

JPS29

I'll start the celebrations for us on base rate trackers.

YIPPPEEEEE:j:j:j:j:j:j:j:j:j:j

JPS29

And for the savers

:mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad:

edinburgher

And for the savers

Seconded (with angry bells on)!

JPS29

See thats the thing. I greatly appreciate that it helps us on trackers out through hard times BUT I do feel it's unfair for those with savings who have been prudent and are now getting shafted for it.

Thats why my response was a neutral one, with both parties feelings acknowledged (sorry Edinburgh couldn't find any bells ;-) )

Pincher

Spending it all on fixing the house before inflation makes it cost twice as much to do the same work.

The_Thrilla

I've been loading up on precious metals for a couple of years now. I also shave my head. So, when hyperinflation really comes, I won't be getting a haircut either way.

hillcats

Must confess to having an interest in both sides to this conversation, we have a tracker mortgage that is being offset with some savings....

We are however not paying / or being paid any interest on the amount being used to offset, but the lower rates are meaning that we are paying minimal interest on the remaining outstanding capital that is not being matched with a credit balance for the offset.

The longer the rates stay low then more of our monthly payment is being used to clear more capital rather than paying interest as we are still paying at the top rate as when the mortgage was first taken on.

Prefer the lower rates as clearing more capital from outstanding mortgage amount every month.

VT82

I've got really geeky mixed feelings about base rate movements. Skip my post if you're not interested in geeky things...

I'm a net borrower as my mortgage is about £108k and I have savings of around £24k.

None of my savings are fixed rates so would all get, or would be moved to benefit from, an upswing in rate from an increase in Bank Base Rate.

Of my mortgage, I pay about 60% and my hosuemate pays about 40%. £46k is on a base rate tracker, so the 60% of this that I'm responsible for is still more than my savings, so I'm still better off if rates stay low. The rest of my mortgage is a staff mortgage, which is fixed for term. However, I pay tax as a benefit in kind - and the level of tax I pay depends on the Halifax SVR. So if bank base rate goes up and the Halifax SVR goes up, I won't pay any more on the staff mortgage, but I will pay more tax (and won't pass any of this cost on to my housemate!).

So it still looks like I'm better off with rates staying low. Or does it?

I work for a financial institution, which will start making decent profits again if rates go back where they 'should' be. And if my company starts making decent profits again, I might get a bonus or a payrise. So I guess I want rates to go up for this reason, which could knock all the other ones into insignificance.

Plus, I am contributing to a pension, and even though most of this will be in stocks and shares rather than cash, it should still grow more if rates are higher.

So do I want rates to stay low to keep my mortgage down? I have no idea!!! Good job I'm easy-going and don't over-analyse things :rotfl::rotfl::rotfl:

Vincenzo

VT82 wrote: »

I work for a financial institution, which will start making decent profits again if rates go back where they 'should' be. And if my company starts making decent profits again, I might get a bonus or a payrise. So I guess I want rates to go up for this reason, which could knock all the other ones into insignificance.

The margins on lending are much more profitable now than they were in 2007.

My theory is that part of the reason the Bank of England have kept rates so low (and will continue to for some time) is to help recapitalise the Banks, hence the big profits you have been hearing about of late.

Personally I am far better off with low rates. To the tune of nearly £800 per month. It is effectively a c.£19k pay rise (pre tax)!