Interest rate held at 0.5%

Thrugelmir

1984ReturnsForReal wrote: »

If I knew what "on" meant I may agree with you.....

Shortened terminology. Odds On. The likelihood of the event happening (1) is greater than the event not occuring (8).

vivatifosi

Thrugelmir wrote: »

Suggest you make the most of the coming 5 years.

That's the idea Thrugelmir and why we went for 5 years fixed rather than the lower rate tracker over which there is more uncertainty. The rates being lower than either previous fixed allowed us to shorten the term by four years and only put the payments up by about £100, but over and above that we're still allowed up to 20% overpayments. I have no doubt whatsoever that the remaining term will not be as cheap to finance.

Chris2685

It means you put 8 quid on to win a quid+stake.

1984ReturnsForReal_2

Thrugelmir wrote: »

Shortened terminology. Odds On. The likelihood of the event happening (1) is greater than the event not occuring (8).

Ah...

I see £1 on £1.13 back......

Nah......


I was probably 4 - 4 split with Mervyn sending a quick text after tossing a coin (the double sided one Mr Brown gave him) whilst still enjoying the 7 day bender he is on............

Graham_Devon

Just listened to an interesting analysis on this one.

Commentator reported that the BOE was more likely to boost stimulus, via QE, and more likely to reduce rates than increase them in the near term.

However, he also commented that we are now playing with fire. He thinks people now see these rates as normal and a "dangerous sense of apathy" is setting in. He stated that it is now critical that everything that can be done is done to inform people that rates WILL go up. He stated if this doesn't happen, more people will get used to these level of mortgage payments, and in his words, an increase later rather than sooner, would be "catastrophic" as household budgets have now aligned themselves with new lower payments.

On inflation, he reckons it's been left to do pretty much what it wants.

vivatifosi

Graham_Devon wrote: »

He stated if this doesn't happen, more people will get used to these level of mortgage payments, and in his words, an increase later rather than sooner, would be "catastrophic" as household budgets have now aligned themselves with new lower payments.

Interesting point that one Graham. It'll be scary if the perceived wisdom becomes that interest rates are always low in much the same way that the perceived wisdom for a long time was house prices can only go up.

Percy1983

It does seem that many people are just spending more, I will say that I will be looking at mortgages and also looking what happens if rates go upto 10% before jumping in.

Thrugelmir

Graham_Devon wrote: »

Just listened to an interesting analysis on this one.

Commentator reported that the BOE was more likely to boost stimulus, via QE, and more likely to reduce rates than increase them in the near term.

However, he also commented that we are now playing with fire. He thinks people now see these rates as normal and a "dangerous sense of apathy" is setting in. He stated that it is now critical that everything that can be done is done to inform people that rates WILL go up. He stated if this doesn't happen, more people will get used to these level of mortgage payments, and in his words, an increase later rather than sooner, would be "catastrophic" as household budgets have now aligned themselves with new lower payments.

On inflation, he reckons it's been left to do pretty much what it wants.

Maybe this is why regulation of mortgages is being considered. If only as a short term measure. To stop people over extending themselves. As a rapid rise in rates will have two major impacts. Reduce disposable income and lower house prices. Creating yet more difficulties for many average earners. Who are going to be squeezed with minimal wage growth.

Graham_Devon

Thrugelmir wrote: »

Maybe this is why regulation of mortgages is being considered. If only as a short term measure. To stop people over extending themselves. As a rapid rise in rates will have two major impacts. Reduce disposable income and lower house prices. Creating yet more difficulties for many average earners. Who are going to be squeezed with minimal wage growth.

I'm not sure it would even need to be a rapid rise, say after 2-3 years of rates this low. People really will have adjusted by that point. Indeed, there will be many families for whom payments this low is frankly normal as they will have recently bought a place and not know any different.

The BCC now suggest rates will remain unchanged until at least mid 2011....thats another 10 months of people getting used to it and aligning budgets accordingly.

We've all seen the reports of rising spending in the high street, at a time when were supposed to have less money. How much of this rise in spending has come from savings in mortgage payments?

Must admit, I don't really think anymore about how much my mortgage was. I'm used to my payment now.

Mmortgage "rationing" as it seems to be being called, could be one of the most sensible things we could be doing right now.

Generali

Thrugelmir wrote: »

Shortened terminology. Odds On. The likelihood of the event happening (1) is greater than the event not occuring (8).

Other way around.

Do something 9 times:
8 times event A happens, 1 time event B happens.
Odds of event A happening are 8-1 on.
Odds of event B happening are 8-1 against or just 8-1.

My explanation isn't 100% accurate but it's a good over simplification even if I do say so myself.

Oh to go on topic for a sec the split will be known on 22nd Sept when the minutes come out.