Base rates down 0.25% to 5.5%

nilrem_2

thor wrote: »

We may have had a handful of rise over the last year and a half but for the majority of this decade cuts have dominated and savers are still suffering from where they were a few years ago. The gap between mortgage and saving rates must be way larger than it used to be.

Spot on, you said exactly what I felt like saying but I could not find the correct words.

free4440273

thor wrote: »

We may have had a handful of rise over the last year and a half but for the majority of this decade cuts have dominated and savers are still suffering from where they were a few years ago. The gap between mortgage and saving rates must be way larger than it used to be.

Indeed, and were it not for the 'distress' in the financial system (lenders needing additional monies than they would otherwise) fixed-rate bonds, say, would more likely be paying between 5.50 - 6.00 per cent (not 6.70 - 7 per cent). It's quite disgusting the way savers have been treated over the last few years. As I've said before, it's almost as if financial carelessness (stupidity??) is now rewarded instead:mad:

baby_boomer

thor wrote: »

The gap between mortgage and saving rates must be way larger than it used to be.

I'm not sure. Are you talking about a decade ago or two years ago?

Since 1997 there has been a substantial narrowing, followed by a less substantial widening IMHO - (before I've checked the figures).

The narrowing obviously helped fuel the house price boom.

thor

baby_boomer wrote: »

I'm not sure. Are you talking about a decade ago or two years ago?

Since 1997 there has been a substantial narrowing, followed by a less substantial widening IMHO - (before I've checked the figures).

The narrowing obviously helped fuel the house price boom.

I've not checked the figures either which is why I was querying it but from memory it is only at around the beginning of the millenium that banks and building socities started to deviate from the nase rate changes. You say that the gap narrowed since 1997 before widening and you must be remembering that mortgage rates shot down over that period but saving rates followed them down too. Whenever there was a 0.25% drop in the boe rate both mortgages and savings rates were cut by the same amount so the gap remained constant. Then around 5 or 6 years ago we began to see the introduction of instituions raising saving rates less then the boe rate rises or cutting by more than the boe rate falls.
This is why I believe the gap to be more than it was in 1997 and savers are the ones who have suffered most. The reason why mortgage payers are getting into trouble now is not because of high rates or hips or stamp duty but because of sky high prices!

aardvaak

All this cut is going to achieve is to give the idiot consumers the feeling to go out and spend, spend,spend at Christmas on Credit Cards etc., then in January to whinge,whinge,whinge when the bills come in and say my interest rate is too high and of coarse the media will pick up on this.

free4440273

^^Looks like it's already begun. Staggering figures :eek: Does nothing stop the relentless rise of the consumer; I'm just amazed.

bristolleedsfan

aardvaak wrote: »

All this cut is going to achieve is to give the idiot consumers the feeling to go out and spend, spend,spend at Christmas on Credit Cards etc., then in January to whinge,whinge,whinge when the bills come in and say my interest rate is too high and of coarse the media will pick up on this.

whats being said is that in the new year if not sooner more and more people are going to be refused unsecured credit and credit cards, credit card rates will increase and if people think ill ditch this now expensive credit card and get one elsewhere they risk having their new credit card application turned down.

result mega slowdown in spending. = reduced prices = reduced inflation, thats the theory. :rolleyes: my belief is people will turn to money sharks. :mad:

i know :money: agrees with this.

http://business.timesonline.co.uk/tol/business/money/borrowing/article3031063.ece

"Martin Lewis, of moneysavingexpert.com, the financial website, said:Will credit card rates rise next year? Yes. People who then try to switch to another card company to avoid paying more face the possibility of being turned down.”

Aegis

aardvaak wrote: »

All this cut is going to achieve is to give the idiot consumers the feeling to go out and spend, spend,spend at Christmas on Credit Cards etc., then in January to whinge,whinge,whinge when the bills come in and say my interest rate is too high and of coarse the media will pick up on this.

It also means a substantial decrease in my mortgage next year. Personally I'm quite pleased about that result!

By the way, I'm not an idiot consumer defending his corner. I spend within my means and try to be frugal with my cash where possible, but because my mortgage is much bigger than my savings, I will always welcome a base rate reduction.

What will I do with the extra money each month? I'll save it up and continue to invest as and when I have some spare cash.

bristolleedsfan

Aegis wrote: »

It also means a substantial decrease in my mortgage next year. Personally I'm quite pleased about that result!

By the way, I'm not an idiot consumer defending his corner. I spend within my means and try to be frugal with my cash where possible, but because my mortgage is much bigger than my savings, I will always welcome a base rate reduction.

What will I do with the extra money each month? I'll save it up and continue to invest as and when I have some spare cash.

what type of morgage do u have.

Aegis

bristolleedsfan wrote: »

what type of morgage do u have.

At the moment it's fixed, but I'm switching over to a base-rate tracker once my fixed rate ends. The substantial decrease is in comparison to what it would have been if the rates had stayed the same.