Thoughts on negative base rate or a 0% base rate...

IAMIAM

Will it happen and how will it impact mortgages/lending

Thrugelmir

Not the forum for such discussion. 

IAMIAM

Thanks for telling me the rules of MSE

ACG

I know a bank which is literally spending a small fortune in man hours to get their systems to be able to handle it, so I think it is quite likely. 

I dont think it will affect mortgage rates, they cant really go any lower and still be profitable. 

Salemicus

My tracker mortgage says (base rate + X) in the promotional materials, but in the fine print it says it won't go below X. I suspect a lot of others are like this too, so the impact on existing mortgages will be small.

IAMIAM

I can see the base rate going to 0% to be honest

ACG

Salemicus said:

My tracker mortgage says (base rate + X) in the promotional materials, but in the fine print it says it won't go below X. I suspect a lot of others are like this too, so the impact on existing mortgages will be small.

I used to work for a bank, and their rate was x% BELOW the bank of england base rate. The amount of calls we received from people expecting payment was quite high. The bank basically said the t&cs do not say we will pay you money so you basically just dont pay any interest and thats as good as it gets. 

rglondon

I think the rate will stay low for a very long time becasue of the economy.