Rates cut to 2%

[Admiral Huddy]

http://news.bbc.co.uk/1/hi/business/7764741.stm

Hopefully this will be passed on.

Great news for my flexible mortgage since overpaying and rate cuts will shorten the term

[loki]

Hopefully.

Its all the big C word at the moment though isn't it. The banks don't want to give credit out people dont want to spend money. Is the finance system as we know it broke beyond repair ?

[Admiral Huddy]

Originally Posted by loki

Hopefully.

Its all the big C word at the moment though isn't it. The banks don't want to give credit out people dont want to spend money. Is the finance system as we know it broke beyond repair ?

No I don't think so. They'll bounce back. It's happened before.

Personally, if you are in work then things have never been so good, it's just confidence that's gone. This will come back as soon as all the doom and gloom has passed and people do realise they have never been so better off. The press don't help either. Once confidence is restored, then things will start moving again. Unfortunately, we are also affected by what goes on across the pond.

[Tak]

Fixed rate; interest drop means nothing to me except my pitiful savings will get less interest.

[Tak]

Originally Posted by Kitten

Seems to me that it's only helping those who were able to get a variable/non-fixed mortgage in the first place - which tends to be those who were better off financially (or at least had better incomes).

Of everyone I work with, this is beneficial for 1 of them. The other 50-odd, including myself, were offered fixed rate or nothing because I guess the banks saw this drop coming.

We got out fixed rate because at the time the interest rates were going upwards.
At the time the bank guy said that the majority of people were doing exactly the same thing, so going by that there are a lot of people who these rate changes mean nothing to, who still won't have "extra" disposable income, who still won't be spending, who still are worried about the future.

The only way this drop could help me is if my credit card interest went down but as they haven't passed on any of the other drops yet, I can't see that happening.

[Pumpkinstew]

Originally Posted by Takhisis

Fixed rate; interest drop means nothing to me except my pitiful savings will get less interest.

Same. 2 and a half years left on a five year fixed.
Might have a look around at houses in our area though and see if we can re-negotiate the mortgage and get an extra bedroom for similar levels of repayment.

[Zirax]

I didn't think they would cut this much in one go. Essentially now they have a dangerous precident. The last time that rates were 2% was the 1600's or something. Now they have little breathing room, can you imagine the headlines:-

"Economy in worst state since 1600"
"Britain back to the middle ages"
etc

This certainly won't help public spending in any way and it will be further fuelled by the news. There is the case of the pound being further reduced in value if they keep making aggressive cuts.

edit:-

I stand corrected, apparently its 1950 the rates were at 2%. I could have sworn they were saying 2% and 1600's on radio 4. I'll have a hunt. Either way the papers are going to have another field day and it isn't going to inspire confidence.

[Will]

My pitiful savings will be even more pitiful... I doubt it'll affect the credit card interests at all... now's the time to buy a house I gues.. shame I haven't got enough for a deposit.

[Desmo]

Doesn't really help us much either. Only way we benefit is that the mortgage on Piggypad in Swansea has decreased when the last drop came. Whether this one gets passed on or not is something we'll just have to wait and see.

The last drop meant we actually started to see a profit instead of the place costing us a little each month


Our current mortgage on Pigmopad is fixed until early-middle of next year so we can only hope the rates stay low in time for our remortgage.

[Mark]

Same situation as Kitten. I may investigate whether my current provider has any better rates and see what the exit clauses on my current deal are. If the benefits outweigh the costs then I'll consider it in January (they're predicting another 0.5% cut in January with the possibility of the rate hitting 1% or even 0% at a later date).