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Interest rates could stay at 0.5% throughout 2011
Comments
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I'm also going to be delighted if rates stay low for years. I will be able to renovate my house and then pay down the mortgage to a reasonable level. In 5 years or so when we start to see real growth in the economy, I will have consolidated the ownership of my property and be an ordinary working class bloke who owns a £500k property (who doesnt live in London!), something I would never have even tried to aspire to a few years back.
It's perfectly feasible that when I come to sell the house to downsize in retirement in 25 years, it'll be worth a million quid. The tax free equity from the house sale, coupled with my company pension will pretty much guarantee a comfortable and secure retirement. All the result of a series of gambles on houses and the judicious use of interest only mortgages and direct capital overpayments.0 -
RenovationMan wrote: »I'm also going to be delighted if rates stay low for years. I will be able to renovate my house and then pay down the mortgage to a reasonable level. In 5 years or so when we start to see real growth in the economy, I will have consolidated the ownership of my property and be an ordinary working class bloke who owns a £500k property (who doesnt live in London!), something I would never have even tried to aspire to a few years back.
It's perfectly feasible that when I come to sell the house to downsize in retirement in 25 years, it'll be worth a million quid. The tax free equity from the house sale, coupled with my company pension will pretty much guarantee a comfortable and secure retirement. All the result of a series of gambles on houses and the judicious use of interest only mortgages and direct capital overpayments.
By that time you'll have to work until your 70 most probably have to pay some sort of stamp duty because you are downsizing then place any money that is left in the bank and lose everything as you have fallen for the charms of a nice "lady" from Russia ;o)))))))0 -
I'm not convinced the BoE will ever reverse QE, except as far as draining excess reserves.
It reverses itself as the gilts mature. The BOE will then face a choice between actively rolling-over QE with further gilt purchases, or allowing it to fade out of the money supply.
I'd be interested to know what the maturity profile of that £200B of gilts is like. Like you, I'm skeptical whether it will be actively reversed ahead of time.0
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