Low interest rates.

Sibley

I can say hand on heart that nothing has changed my life as much as the low interest rates.

Who would have ever believed it was possible really?

I can remember when my rate was 4-6%.
Never really took my notice of it. My mortgage company doesn't automatically reduce payments when the rate drops so for a year or so I was overpaying.

Just under 2 years ago, I had the confidence these low rates were here to stay. Good move on my part. I bought a new car and now have just 2 more payments to go.

Never dreamed I would get to this stage and rates would still be on the floor.

I am really starting to believe rates will be under say 3% for the rest of the mortgage term.

I suppose as somebody who remembers the old 15% horror rates that is what gives it the surreal feeling.

Do any of you feel the same?

It's really possible we are on these low rates for good isn't it?

property.advert

A year or so ago, when the best 5 year fixes were around 3.99%, I thought you would be wise to lock into those and sleep easily. The last time I looked rates were available for 3.19% fixed for 5 years and you can get 10 year fixes for well under 5%.

Commentators say that rates could stay low for 5 years but if there is any shift in expectation, rates will rise and fixes will be far more expensive. If I was borrowing right now, I think I'd suck up a 3.19% if I could and pay down as much as possible over the 5 years (saved elsewhere to offset).

oldvicar

WhatI feel is my own business Sibley.

However you are (as ususal) mistaken: Interest rates are NOT LOW just now, they are quite NORMAL. Very similar to what they were 10 years ago.

There is one difference of note, and that is the BoE rate is low. If you've got an old mortgage linked to BoE rate then yes, you are underpaying. But the premium over BoE rate for new mortgages is much higher now.

On the whole now there is no particular link between BoE rate and what the banks actually pay for retail deposits or charge for borrowings. Its just smoke and mirrors helping the government to manipulate the price of its Gilts so that it can swagger in front of Johnny Foreigner saying "just look at the size of our triple AAA debt " and "we are a safe haven".

property.advert

oldvicar wrote: »

....But the premium over BoE rate for new mortgages is much higher now.....

This is what will hurt people as rates rise more than anything. So many of these mortgages at BBR plus 3.99% or worse are going to chew them up when it rates rise unless they have seriously overpaid, saved up or their houses have risen so much that they can seriously reduce the LTV.

RUN_RABBIT_RUN

my mortgage is £500 a month less than it used to be. happy days.

Graham_Devon

Sibley wrote: »

I can say hand on heart that nothing has changed my life as much as the low interest rates.

Nothing?

Have a kid, for christ sake!

Carl31

Graham_Devon wrote: »

Nothing?

Have a kid, for christ sake!

Quite

If the best thing in your life is saving a few pounds, then i think you need to get out and see what life has to offer. Thats a pretty sad statement

DervProf

Sibley wrote: »

It's really possible we are on these low rates for good isn't it?

Possible, but not likely.

Just like many people thought that there would be no end to cheap/easy credit and HPI (2002 - 2007), people now think that low base rates will last forever.

Low rates may be around for a while, but "for good", I very much doubt it.

The person on their sixth pint will often not consider the possibility of a hangover.

bobthedambuilder

For everyone that's benefitted from low actual interest rates there's somebody who has suffered by it. Think of the pensioners who have a little nest-egg put by for comfort in their old age who now get a pittance.

Oldvicar says interest rates are the same as they were 10 years ago. I don't see that. Then, I was getting 6%+ for my deposits. Now I'm getting 2-3% for the same type of savings account.

[Deleted User]

After working 50 years and in low paid jobs but still put savings away for retirement low interest rates could not have hurt us more.

ess0two

bobthedambuilder wrote: »

For everyone that's benefitted from low actual interest rates there's somebody who has suffered by it. Think of the pensioners who have a little nest-egg put by for comfort in their old age who now get a pittance.

Oldvicar says interest rates are the same as they were 10 years ago. I don't see that. Then, I was getting 6%+ for my deposits. Now I'm getting 2-3% for the same type of savings account.

Plenty of products offering more than 2-3%,just need to take more of a risk.

Gone are the days of a decent return on savings for sitting on yer !!!.