Are we expecting the BOE Base Rate to drop to 3.75% on the 6th November 2025?

IAMIAM

as expected then

kingstreet

IAMIAM said:

Hoenir said:

IAMIAM said:

 hoping to fix onto a 5 year when rates are around 2-3% again.....

That ship has well and truly sailed. 

So why are there fixes at 3.8% with a BOE rate of 4.5%?
Does this mean fixes will be 5% when the BOE rate is 3.5%? 
I think not

Because BOE base rate has no real relevance to fixed rates which are based on money market swaps and rate expectations for the period in question.

RelievedSheff

Whilst I think they should hold rates at the next meeting I have a niggling suspicion that they will drop them another 0.25%.

Strummer22

RelievedSheff said:

Whilst I think they should hold rates at the next meeting I have a niggling suspicion that they will drop them another 0.25%.

Probably not after yesterday's inflation data.

I can console myself that the capital I owe on my mortgage is inflating away even though rates aren't dropping as fast as I'd hoped.

ReadySteadyPop

Strummer22 said:

RelievedSheff said:

Whilst I think they should hold rates at the next meeting I have a niggling suspicion that they will drop them another 0.25%.

Probably not after yesterday's inflation data.

I can console myself that the capital I owe on my mortgage is inflating away even though rates aren't dropping as fast as I'd hoped.

It only "inflates away" if we have a strong jobs market and consistent COL beating wage rises, we are not in that scenario just now, and if inflation goes up then rates have to go up and the cost of your debt increases? The cost of mortgage debt is based more on the "Ten year Yield" than base rate though anyway. There is no reason for rates to "drop fast", rates should start rising again soon IMO.

Strummer22

ReadySteadyPop said:

Strummer22 said:

RelievedSheff said:

Whilst I think they should hold rates at the next meeting I have a niggling suspicion that they will drop them another 0.25%.

Probably not after yesterday's inflation data.

I can console myself that the capital I owe on my mortgage is inflating away even though rates aren't dropping as fast as I'd hoped.

It only "inflates away" if we have a strong jobs market and consistent COL beating wage rises.

Well, at least assuming the interest rate stays the same, the monthly repayments looks much smaller as time goes by even if pay rises only keep up with inflation.

In fact, just trying to get my head around this... If you have a 30 year mortgage at 5% interest, in 20 years you'll have repaid half the capital. Take out a £200,000 mortgage now and in 20 years you'll owe £100,000. But if inflation is 3% over that time, the value of your debt is only £56,000 in today's money. So even if your pay rises only keep up with inflation, not beat it, that £100,000 which you borrowed today and still owe 20 years from now, will only be worth £56,000 in today's money. I think this means inflation erodes debt...

Obviously whether or not this is a good deal depends on the interest rate you're paying.

ACG

Apparently lenders are expecting a drop, but it will be late summer-autumn time. 

Hoenir

Events in the US and Japan are more than likely putting upward pressure on global lending rates. The UK is merely a bystander in the greater scheme of matters. 

lfc321

Well, at least assuming the interest rate stays the same, the monthly repayments looks much smaller as time goes by even if pay rises only keep up with inflation.

In fact, just trying to get my head around this... If you have a 30 year mortgage at 5% interest, in 20 years you'll have repaid half the capital. Take out a £200,000 mortgage now and in 20 years you'll owe £100,000. But if inflation is 3% over that time, the value of your debt is only £56,000 in today's money. So even if your pay rises only keep up with inflation, not beat it, that £100,000 which you borrowed today and still owe 20 years from now, will only be worth £56,000 in today's money. I think this means inflation erodes debt...

Obviously whether or not this is a good deal depends on the interest rate you're paying.

Would love to work in an industry where pay keeps up with inflation! 

IAMIAM

Lets hope it drops in August!!!