Interest rates

[sheepshagger]

nope - not at all DRS....

I guess I should let the Ironside thing go - fair enough .... he was wrong though

[janaage]

Thought this was worth a bump, fair play to Nationwide and Halifax for not enforcing their "tracker floors", means a lot of people will be saving even more thanks to the latest 1% cut!!

Hurrah!!!!

[Sippo]

Thought I heard on the radio this morning that halifax weren't passing on the 1%??

[Sippo]

http://news.bbc.co.uk/1/hi/business/7766364.stm

[janaage]

Halifax aren't passing on the full 1% to variable rate mortgagors, however Halifax and NW both have floors of 2.75% on their tracker mortgages, however they both have decided to not impose this floor and allow customers with trackers to receive the full 1% rate cut on their mortgages.

Without being harsh if you have a variable you should have been told by your mortgage adviser that building societies don't have to pass on rate cuts, it's up to them, which is why variable rate mortgages are cheap, fees wise.  A tracker on the other hand tracks rate changes (at a set rate above, or below if discount tracker) contractually, unless you hit the floor (which they haven;t imposed).  These mortgages cost more to set up, you'd have to pay a fee for a decent tracker.  So it's a case of you pay for what you get really.

[Arriba]

i'm happy with it.could go again by half a % next month.

[Samdy Gray]

Japan's base rate is at 0.3% at the moment, that's crazy.

[janaage]

It'd be interesting to see if they impose they collar then though, wouldn't blame them if they did as the LIBOR isn't that low.  Watching Question Time last night it's almost as if some people expect the banks to make no money on these loans.

Re: Japan it's not that crazy when you consider how much the property market's suffered in recent years over there.  Basically if you own a property in Japan you've had to put up with years of losing value on your property, it just wasn't worth owning a house for example, you'd have been better off renting.  Hence the rather attractive interest rates.

[Phil_S]

A view from inside the industry - I know that last week Nationwide & Halifax were seeking a legal opinion on their Collars. Nationwides is at 2.75% base rate & Halifax have theirs at 3%.
It may well be that the legal bods said they can't do it, which is why they passed on the full amount. That would apply in particular to the Halifax because they took that bit out off their KFI's (Illustrations) a while ago after the FSA told them to make it shorter.
Having said that I have some of my clients on a rate that tracks BELOW the base rate, (0.39%) so it would be interesting to see what will happen if it does fall to 0.3%. Does that mean the lenders have to pay the borrower interest !?
The main driver though with rates is the London Interbank Offered Rate (LIBOR) which is the rate that banks lend to each other. That has fallen since Novembers cut, by about 1 %, hence lenders have cut standard variable rates but not by the whole amount. If LIBOR continues to fall that will be the best news, & will lead to a fall in SVR's & new fixed rates.
Unfortunately the good rates now available for NEW borrowers are only if you have a lot of equity or big deposit (40%+). Whilst funds are still short (And they will be until the banks pay off the Government & the credit squeeze ends) then lenders will no doubt offer good rates but only to low risk customers with squeeky clean records & large deposits.

[RobertT]

In May, with my current deal running out and facing a hefty rise in payments, I remortgaged with HSBC on a 0.48% above Base Rate Tracker, then 5.48%.  I went for it on the basis I thought downwards moves were more likely in the next 2 years than up and it's got absolutely no tie in period and is always 0.48% above, plus the fees were £600.  It was a cracker of deal as it turns out, now £240 lower a month than only 7 months ago.  The trick is budget a rise into the calculation before taking it I suppose, knowing you can cope with it going up.  As I have jack shit in savings, the current downturn is working out quite nicely for me.

[Dazzza]

Having said that I have some of my clients on a rate that tracks BELOW the base rate, (0.39%) so it would be interesting to see what will happen if it does fall to 0.3%. Does that mean the lenders have to pay the borrower interest !?

I know nothing about mortgages but is that a standard(ish) deal and who was dishing those out?

Thankfully I have a mate pretty high up in Barclays that tipped me off before things crashed and I got in on a cushdy tracker effort. 

[OOH! SHAUN TAYLOR]

In May, with my current deal running out and facing a hefty rise in payments, I remortgaged with HSBC on a 0.48% above Base Rate Tracker, then 5.48%.  I went for it on the basis I thought downwards moves were more likely in the next 2 years than up and it's got absolutely no tie in period and is always 0.48% above, plus the fees were £600.  It was a cracker of deal as it turns out, now £240 lower a month than only 7 months ago.  The trick is budget a rise into the calculation before taking it I suppose, knowing you can cope with it going up.  As I have jack shit in savings, the current downturn is working out quite nicely for me.

I have long suspected you are 'The Man' Rob. This confirms it

Phil S..can you just confirm what I already know...me and Mrs Oooh! re-did our mortgage back in June time...our initial deal had come to an end. We went for a fixed rate of 5 point something over 3 years.

I guess there's no way out of that really is there? It was a good deal at the time and we made a decision on the information available at the time.. it's always nice to be paying a bit less though isn't it? I don't suppose there's any way out of it really is there?

P.S. Don't worry, I'm not suicidal or owt

[janaage]

A view from inside the industry - I know that last week Nationwide & Halifax were seeking a legal opinion on their Collars. Nationwides is at 2.75% base rate & Halifax have theirs at 3%.
It may well be that the legal bods said they can't do it, which is why they passed on the full amount. That would apply in particular to the Halifax because they took that bit out off their KFI's (Illustrations) a while ago after the FSA told them to make it shorter.
Having said that I have some of my clients on a rate that tracks BELOW the base rate, (0.39%) so it would be interesting to see what will happen if it does fall to 0.3%. Does that mean the lenders have to pay the borrower interest !?
The main driver though with rates is the London Interbank Offered Rate (LIBOR) which is the rate that banks lend to each other. That has fallen since Novembers cut, by about 1 %, hence lenders have cut standard variable rates but not by the whole amount. If LIBOR continues to fall that will be the best news, & will lead to a fall in SVR's & new fixed rates.
Unfortunately the good rates now available for NEW borrowers are only if you have a lot of equity or big deposit (40%+). Whilst funds are still short (And they will be until the banks pay off the Government & the credit squeeze ends) then lenders will no doubt offer good rates but only to low risk customers with squeeky clean records & large deposits.

I have to say I'm take note of the small print and the first I saw of the "collar" (your interest rate can only go down to 4.19% was when we got our first letter telling us our interest rate had been cut.

Can't for a minute think that if the rate ever got that low Phil the companies would credit the mortgage account holders, you can't go lower than zero (not that we're likely to get down to jap IR levels).

OST there's no way out of a fixed rate mortgage unless you want to pay x amount in redemption fees, you're stuck there fella.

[OOH! SHAUN TAYLOR]

OST there's no way out of a fixed rate mortgage unless you want to pay x amount in redemption fees, you're stuck there fella.

Meh! I kind of knew that. That's the gamble. As I said, I'm not suicidal or owt

[donkey]

It'd be interesting to see if they impose they collar then though, wouldn't blame them if they did as the LIBOR isn't that low.  Watching Question Time last night it's almost as if some people expect the banks to make no money on these loans.

That's what I expect.  They should pass on the rate cut, the thieving bastards.  Fuck them and the horse they rode in on.