How have you benefited from low interest rates?

Jonbvn

We have considerably more savings/investments than the amount we owe on our (low) tracker mortgage. However, the low interest rate environment has driven a lot of money into the equity/bond markets, where we have done rather well over the last few years.

Overall, I would say we are probably marginally better off.

BTW, why would anyone ever have long term cc debt, given the crippling interest rates?

vivatifosi

Main benefit for us is that we've been able to take a five-year fixed at a very low rate. We got in just before the fixed rates started to creep up again. Will enable paying off of large chunk of mortgage, plus there will be so little outstanding at the end that whatever happens to rates we will be able to afford.

However on the other side of things, my ISA is barely worth putting money in and returns on savings are hard to find.

nearlyrich

We are MF so no benefit to me, in fact my savings have not earned much interest so it's been the opposite scenario here, notpraying for high rates but reality needs to come back soon as such a low rate is not realistic long term.

kabayiri

No benefits of low IRs for me. The mortgage is offset like other posters.

wymondham

They came down from sensible levels in my opinion...... Not benefitted at all really..... Everything else has gone up in this time so any benefit is wiped out......

HAMISH_MCTAVISH

AD9898 wrote: »

So, I think what would be interesting to see is on one side of the equation how much have low IR's reduced your debt and on the other side how much as inflation in essentials (fuel, energy, food etc) caused by low IR's cost you extra ?

My guess would be that some people will be quite shocked that they are now worse off than they were before IR's dropped.

I'd disagree.

The average pay rise is around 2% (even today)

Expenditure on goods that have inflated, or that attract VAT, is still a minority of most peoples income.

The part most bears forget, is that if you spend 35% of your income on consumer goods or services that have inflated by 4%, but get a pay rise of 2% on 100% of your income, you're still better off in cash terms. Add cheaper mortgage expenses for those that have them, and it's still a clear win versus 2007 for most mortgage holders.

I do accept there are some people being squeezed, but that squeeze is tiny as an average. Maybe a percent or two less disposable income.

There will always be people at the margins who will be seriously hurt by any increase in costs, but where the bulls and bears disagree is that the bears seem to assume such people are a majority, where the bulls assume they are a tiny minority.

Based on the results so far, (default rates, repo, etc) the bulls are right.

abaxas

We have some money in an NSI RPI based isa.

Doing quite well.

bendix

Generally positive. No mortgage or debt at all, so not an issue there, and cash savings I have are overseas where interest rates have stayed significantly higher than the UK.

Lower rate environment in the UK has led to investors searching for returns in shares, and I've been invested in share since March / April 2009 so have benefited greatly from bouyant sharemarkets.

Generali

It'll make my visit back to the UK in your summer much cheaper thanks to what it's done to relative exchange rates.

vivatifosi

Generali wrote: »

It'll make my visit back to the UK in your summer much cheaper thanks to what it's done to relative exchange rates.

You really know how to make us feel better with our lot;).