Interest Rates Cut to 0.25%

Dandytf

Is today gong to be the Classic Drop Base Rates for short time then Rocket them sooner than everyone thinks.
Not a serious comment, though I remind myself rates Can Increase anytime.

Thrugelmir

Dandytf said:

mamsiller123 said:

Nationwide have cut theirs already!

Honestly as I'm on 1.99 tracker until mid 2021 -that's 1.4boe -until today.
I need to  check, have Natwide been generous or is it part of .5% that's being passed on
Thanks!

Does your product have a collar?

weddingringman

Is there a way of seeing historic packages for each lender? Or would you have to just screen grab the rates and check back?

The drop in BoE is a pleasant surprise. I don’t think it’s unreasonable to anticipate that may impact the likes of 5 and 10 year fixes. It shows how fragile the market is and reinforces what we already know that rates will be low for many many years.

Dandytf

Thrugelmir said:

Dandytf said:

mamsiller123 said:

Nationwide have cut theirs already!

Honestly as I'm on 1.99 tracker until mid 2021 -that's 1.4boe -until today.
I need to  check, have Natwide been generous or is it part of .5% that's being passed on
Thanks!

Does your product have a collar?

Hi
Yes 0% I think. Maybe .5%
I'll re check tomorrow.
thanks

Dandytf

An initial interest rate which is 1.24% above the Bank of England Base Rate, currently 0.75% for 24 full months.
Thismeans your initial interest rate will be 1.99%.

The initial interest rate will never be less than 1.24%.
Any variation to the tracker interest rate as a result of a change in the Bank of England Base Rate (also known as the Bank Rate) will take place within one month of the announcement of such change.

@Thrugelmir
care to choose which is relevant ,please
I'll re check tomorrow, hopefully mser's can provide correct answer

spaceboy

My mortgage advisor is telling me they are not seeing rate cuts feeding through to fixed term mortgages yet - is this true?

Thrugelmir

I'd read that as your mortgage interest rate never dropping below 1.24%. The rate you pay at any given time will be 1.24% plus the applicable rate for BOE base. You'll benefit from a 0.5% cut. 

Dandytf

Thrugelmir said:

I'd read that as your mortgage interest rate never dropping below 1.24%. The rate you pay at any given time will be 1.24% plus the applicable rate for BOE base. You'll benefit from a 0.5% cut. 

Thanks for taking your time to advise.
care to take a guess for @spaceboy 😉

Thrugelmir

spaceboy said:

My mortgage advisor is telling me they are not seeing rate cuts feeding through to fixed term mortgages yet - is this true?

Lenders do not borrow money at base rate per se. Far more complex than that. A combination of retail deposits, intrabank lending and debt securitisation. In addition support from the Bank of England under the Term Lending Scheme more recently. An extension of which was announced yesterday. Though this only a temporary one year measure. 
Given lenders need to make a margin that covers operating costs, tax, profit and most importantly defaults. Difficult to see long term rates falling significantly across the board. Though of course lenders follow different business models and target different markets. Risk priced correctly , as in underwriting criteria, may see limited tranches of funds offered to hit the media headlines. Nothing like good PR. 
The issue at the moment for lenders is the uncertainty of what impact the virus will have on the domestic economy. Lenders aren't going to chase market share for the sake of it. Very early days to assess the extent of job losses and loss of income for the self employed. Which are most certainly unavoidable. The UK is highly indebted as a nation. With many people having little to no savings to tide them over. 

Whats_your_forte

spaceboy said:

My mortgage advisor is telling me they are not seeing rate cuts feeding through to fixed term mortgages yet - is this true?

Reduction in gilt yields are more likely to affect fixed rate mortgages. Gilt yields are then linked to economy performance which is what a drop in the base rate could or could not influence.