IMF predict return to ‘ultra low’ Interest rates

Aberdeenangarse

Not sure I agree, but it’s certainly food for thought! 🤔

https://www.reuters.com/markets/no-escape-zero-lower-bound-top-central-banks-imf-2023-04-10/

MattMattMattUK

Maybe not as low as 0.1%, but certainly in the 1-2% range which would be zero or negative when accounting for inflation. There is too much debt for governments to keep them as high as they are once the external inflation factors fall back, keeping them where they are now would such so much money out of the economies that it would sink most of the West into recession or stagnation. 

michaels

It is certainly tricky to work out the optimal; remortgage strategy/

My 1.95% 5 year fix ends in October.  approx 18 months ago I did think about paying the 5% ERC and remortgaging at 1.2% for 5 years and decided I couldn't see rate being high enough this October for that to be a win - can't call them all.

Now it is a matter of what to do come October, a 5 year fix at 4% would seem to be bad value if the base rate is likely to fall back to 2% in the not to distant future so then perhaps a 2 year fix or discount might be the way to go although discounts worry me as you are at the whim of the lender rather than being tied to the base rate (but then there don't seem to be tracker offers anymore).

Obviously I am not rushing to lock in current rates but will probably need to commit to something come August/September to allow any remortgage to go through.  My lenders 'go to' rate would appear to be a joke/money making scam to prey on those whoose circumstances have changed and can not remortgage elsewhere.

fewcloudy

michaels said:

It is certainly tricky to work out the optimal; remortgage strategy/  It was ever thus.

My 1.95% 5 year fix ends in October.  approx 18 months ago I did think about paying the 5% ERC and remortgaging at 1.2% for 5 years and decided I couldn't see rate being high enough this October for that to be a win - can't call them all.  You may yet be relieved you didn't pay that ERC, 5 years is a long time...

Now it is a matter of what to do come October, a 5 year fix at 4% would seem to be bad value if the base rate is likely to fall back to 2% in the not to distant future so then perhaps a 2 year fix or discount might be the way to go although discounts worry me as you are at the whim of the lender rather than being tied to the base rate (but then there don't seem to be tracker offers anymore). Yes I agree a 5yr fix at 4% would seem to be bad value.

Obviously I am not rushing to lock in current rates but will probably need to commit to something come August/September to allow any remortgage to go through.  My lenders 'go to' rate would appear to be a joke/money making scam to prey on those whoose circumstances have changed and can not remortgage elsewhere.

.........

Dandytf

Is my 1.74 tracker switch to 3.4 5 yr fix being made to look poor decision already.
I don't think as it could be a considerable few months before the return to low base rates.
Interesting though if uk manages 'Ultra' Low rates again.

michaels

Not sure if the lenders margin/spread over 5 year gilts is still a lot higher than before the turmoil, suspect this will take a fair while to fall back to previous levels.

clueless_but_curious

I couldn't see it staying high and therefore let my fix run rather than rushing to remortgage. 

I am no economist, but if a global economy settles in to functioning on cheap and liquid debt, debt costs cannot simply be ratcheted up without severe consequences