Interest rates - 8 months at 0.5% - and counting?

[blairdin]

Interested to know what some of the gang here make of the BoE's decision to keep interest rates at 0.5% again today. That's 8 months now and we're still one of the few countries in recession.

 

I can't pretend to be an expert - all I know is I'm tied into a fixed rate of 5.9% until April 2010 on my mortgage before it reverts to the banks SVR. Would be fascinated to know what some of the more clued up financial guys round here think will happen to interest rates in the months to come. It's a matter of time before they start to creep up, but over how long is it likely to happen?

[doctor jambo]

Interested to know what some of the gang here make of the BoE's decision to keep interest rates at 0.5% again today. That's 8 months now and we're still one of the few countries in recession.

 

I can't pretend to be an expert - all I know is I'm tied into a fixed rate of 5.9% until April 2010 on my mortgage before it reverts to the banks SVR. Would be fascinated to know what some of the more clued up financial guys round here think will happen to interest rates in the months to come. It's a matter of time before they start to creep up, but over how long is it likely to happen?

 

Predictions are for really low interest rates to continue up to and into 2014 odds

My mortgage has halved in the last year........

[blairdin]

Predictions are for really low interest rates to continue up to and into 2014 odds

My mortgage has halved in the last year........

 

I hope that is the case, but it seems a long time to expect people who are savers to take a hit. And alot of the people who can afford to be savers are also Tory voters I'd have thought - or is that too simplistic.

[The Doctor]

I'm in the process of deciding on a new deal with RBS.

 

Do I take 3.69% fixed or 2.69% above base rate tracker, both for two years, both same price, both tied in?

 

Really what I'm asking is will base rate rise above 1% in the next two years?

[blairdin]

I'm in the process of deciding on a new deal with RBS.

 

Do I take 3.69% fixed or 2.69% above base rate tracker, both for two years, both same price, both tied in?

 

Really what I'm asking is will base rate rise above 1% in the next two years?

 

Its the RBS I'm with too Doc. They've already asked me if I want to make an appointment with a mortgage advisor in February so I can secure "the best deal available".

 

I actually think the best deal might be to sit tight and do nothing when my fixed term ends.

[Special Brew]

Interested to know what some of the gang here make of the BoE's decision to keep interest rates at 0.5% again today. That's 8 months now and we're still one of the few countries in recession.

 

I can't pretend to be an expert - all I know is I'm tied into a fixed rate of 5.9% until April 2010 on my mortgage before it reverts to the banks SVR. Would be fascinated to know what some of the more clued up financial guys round here think will happen to interest rates in the months to come. It's a matter of time before they start to creep up, but over how long is it likely to happen?

 

i am the same my fixed rate ends in February and just got the letter in today. Really tempted to sit tight and go for the SVR.

Heard a few people say they have sat and waited and had decent reductins in repayments.

[jambos are go!]

Savings rates are edging up and you can get 4% +. Amazing when. Base rate is 0.5% and inflation 1.5% A sign that rates will rise IMO over the next year for sure.

[Geoff Kilpatrick]

Base rates mean nothing when the central bank is effectively printing money to buy government debt. Rates will go up when that stops.

[IronJambo]

current interest rates don't matter a flying feck to your ordinary joe. the banks are getting away with murder. the rates available to people that don't have huge deposits (or equity) aren't any better than they were 5 years ago.

 

so on that basis, myself and many others don't give a toss how long the boe base rate stays so low

[david mcgee]

I'm in the process of deciding on a new deal with RBS.

 

Do I take 3.69% fixed or 2.69% above base rate tracker, both for two years, both same price, both tied in?

 

Really what I'm asking is will base rate rise above 1% in the next two years?

 

Will base rate rise above 1% in the next two years?

 

You better believe it will, that means all they need to rise is 0.5%.

That could easily happen in one jump. I would guess that rates will start to rise in the Spring.

 

Remember VAT is going back up in January and the General election is around the corner.

 

There is only one way left for interest rates to go.

[Jambof3tornado]

WE went onto Lloyds SVR in June and have had several letters asking us to go and secure a new deal,but until rates start to move I am going nowhere. They arent going to jump up overnight,it will be a gradual rise,and while the deals the mortgaes companies will do will also rise,its still better to sit tight on an SVR with no tie ins than to take a 2 or 3 year deal surely??

[kitster]

WE went onto Lloyds SVR in June and have had several letters asking us to go and secure a new deal,but until rates start to move I am going nowhere. They arent going to jump up overnight,it will be a gradual rise,and while the deals the mortgaes companies will do will also rise,its still better to sit tight on an SVR with no tie ins than to take a 2 or 3 year deal surely??

 

After posting a similar thread a few months back when my deal was ending that's what I decided to do as well. Having had a mortgage for 10 years now, I've been utterly shafted in every capped and fixed deal i've had as I quite like the security of them. I couldn't get the rate back i'm on if I re-mortgage with my provider and I'd reckon most of the big players in the market are doing the same. I'll hedge my bets for a while and see what happens.

[jambos are go!]

current interest rates don't matter a flying feck to your ordinary joe. the banks are getting away with murder. the rates available to people that don't have huge deposits (or equity) aren't any better than they were 5 years ago.

 

so on that basis, myself and many others don't give a toss how long the boe base rate stays so low

 

Cant agree. Savers can easily get 2% above inflation for low amounts and instant access if they look around. Tax free in an ISA. When saving rates were higher the net return and real growth after tax and inflation was no better at best.

[Geoff Kilpatrick]

BTW, here is a good summary of what is really going on in the UK banks.

[Flimsy]

For all those above who are coming to the end of their mortgage deal, I would recommend speaking to an independent mortgage adviser as opposed to just going back to their banks. How can your bank offer you the best deal if they only offer their own products?

[The Comedian]

I've just got a variable rate, take it i should change to a fixed while the rate is low?

[Curious]

I've just got a variable rate, take it i should change to a fixed while the rate is low?

 

As long as it's a repayment mortgage, tie it in for as long as possible.

[Mr Loverman]

For all those above who are coming to the end of their mortgage deal, I would recommend speaking to an independent mortgage adviser as opposed to just going back to their banks. How can your bank offer you the best deal if they only offer their own products?

 

How can an IFA offer you the best deal when they don't deal with every lender?

[Flimsy]

How can an IFA offer you the best deal when they don't deal with every lender?

 

I never said they did, I said that your bank can't offer you the best deal if they only sell their own products (unless by a remarkable coincidence, their product is the best deal on the market). You are correct that IFAs don't have access to all products as some lenders only deal directly with customers, however, they can give you a comparison of a huge range of products and can take into account charges, underwriting as well as rates. However, if someone wants to wander along the high street or go onto a mortgage comparison site, that's their choice.

[Mr Loverman]

I never said they did, I said that your bank can't offer you the best deal if they only sell their own products (unless by a remarkable coincidence, their product is the best deal on the market). You are correct that IFAs don't have access to all products as some lenders only deal directly with customers, however, they can give you a comparison of a huge range of products and can take into account charges, underwriting as well as rates. However, if someone wants to wander along the high street or go onto a mortgage comparison site, that's their choice.

 

I never said that you said they did

 

IFA's could be influenced by the amount of commission they receive.

[Flimsy]

I never said that you said they did

 

IFA's could be influenced by the amount of commission they receive.

 

A dishonest IFA could. As could a dishonest adviser in the bank, just as a dishonest plumber could charge you for unnecessary work and so on. I do find it strange though that when people want to take out the biggest loan of their life they go straight to their bank in the current climate, particularly RBS or Lloyds.

[blairdin]

I never said that you said they did

 

IFA's could be influenced by the amount of commission they receive.

 

Off topic, but relevant.

 

IFA's have been given a bad press in the past, and rightly so, but to be fair the improvement in the advice being given to clients in the space of the last 10 years I've been doing my job is massive.

 

I see the benefits of good IFA advice every day in work. It's very very rare now for me to have to point one of my claimants in the direction of the FOS as a result of what appears to have been bad advice or a mis-sell.

[Flimsy]

Off topic, but relevant.

 

IFA's have been given a bad press in the past, and rightly so, but to be fair the improvement in the advice being given to clients in the space of the last 10 years I've been doing my job is massive.

 

I see the benefits of good IFA advice every day in work. It's very very rare now for me to have to point one of my claimants in the direction of the FOS as a result of what appears to have been bad advice or a mis-sell.

 

IFAs are very tightly regulated these days and any dodgy dealings will eventually be picked up on and dealt with. As opposed to the 'light touch' regulation the banks have enjoyed in recent years. If IFAs treated all their customers like the banks have they would all be closed, assuredly not bailed out.

[IronJambo]

Cant agree. Savers can easily get 2% above inflation for low amounts and instant access if they look around. Tax free in an ISA. When saving rates were higher the net return and real growth after tax and inflation was no better at best.

 

You're misunderstanding what I'm saying (and I'm not arguing with your point). I'm talking about mortgages, not savings.

 

Unless someone has a big deposit to put on a house, the banks are shafting them.

 

If you were to put ?10k down on a ?100k house, RBS would currently give you a rate of 4.64%. When the base rate was at 4% I had a 100% mortgage at 5.69%. The banks aren't shafting people here?

[kitster]

IFAs are very tightly regulated these days and any dodgy dealings will eventually be picked up on and dealt with. As opposed to the 'light touch' regulation the banks have enjoyed in recent years. If IFAs treated all their customers like the banks have they would all be closed, assuredly not bailed out.

 

The FSA is a joke. What have they been regulating? the banks? the unscrupulous IFAs? Can anyone educated answer that question now as the whole system is an utter shambles in my humble opinion.

[jambos are go!]

Ask your IFA what commision they are getting. They have to tell you I believe . Go to more than one IFA - its allowed. Ask them about National Savings and if they have not got any info walk away because they should.

[Amoruso Lets it Run ...]

Who needs an IFA.

 

Compare the best deals yourself here ........

 

http://www.fsa.gov.uk/tables

[Mr Loverman]

Ask your IFA what commision they are getting. They have to tell you I believe . Go to more than one IFA - its allowed. Ask them about National Savings and if they have not got any info walk away because they should.

 

Their commission is disclosed on what's called a key facts illustration (KFI) - each consumer should see a KFI prior to a credit check being performed.