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Low Interest Rates Are Here To Stay


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Hedging your bets again, IRRO?

I suspect that in the very short term, interest rates will stay low. CPI is likely to drop from its unexpectedly high level of 1.8% and may go negative for a while. I reckon we'll see it shoot back into positive territory by March next year.....at which point the BoE may have no choice about what to do with interest rates.

But then again, who knows, it's anyone's guess.....

I ummm and err on this point...

CPI month on month was expected to go negative this month, instead it was flat...

...its not the first time its been above expectations either

Inflation in the UK is proving stubborn to fall, perhaps because of QE and low interest rates

Our fiscal stimulus is bigger than America's on some measures and our state benfits system is MUCH more generous

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Yep, I bet there are some recent buyers who have come off their fix this year and are seeing massive overpayments in their mortgages now. And if this goes on then the total cost of ownership for their home is ironically going to be much less that some of you who waited to buy at a lower price but with a higher interest rate! Ho hum! Meanwhile those big deposits are earning very little in the bank whilst inflation eats away...

I'm not pro people buying for the sake of it, I just don't like this idea that buying is necessarily the worst thing anyone could have done in the last 10 years. It isn't clear cut and will depend on personal circumstance and how much value you place on home ownership.

How do you work that out? Are they coming off fixed rates and going onto BoE base rate trackers + 0.5% deals now then? <_<

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Why do you think rates jumped to 15% in 1992, do you honestly think the bank/gov wanted to do that? they had no choice total loss of confidence in the £

What do you think is going to happen again in the not to distant future :o

You have not said why you think interest rates went to 15% in 1992. It was of course because the UK had joined the ERM and had to maintain the level of the pound v the DM (if memory servers me correctly) at the time.

The boys in the city decided that our economic predicament at the time did not warrant such a strong pound so they trashed it good and proper. The govt raised interest rates to 15% in a panic measure to tru and defend the pound and lost big time.

I see no evidence at all that Merv King is trying to defend a strong pound, in fact I think he is doing the opposite deliberately trying to weaken the pound.

So to answer you question "do you think the Gov wanted to do that" the answer is YES they did at the time through misguided policy.

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How do you work that out? Are they coming off fixed rates and going onto BoE base rate trackers + 0.5% deals now then? <_<

Most major bank SVRS are between 3.5% and 3.95% so if they fixed two years ago at anything above these rates and revert to the lending insitutions SVR they are quids in.

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Most major bank SVRS are between 3.5% and 3.95% so if they fixed two years ago at anything above these rates and revert to the lending insitutions SVR they are quids in.

I appreciate that.

I was more addressing the "massive overpayments" part of the claim. So they might have come off a 5% or 6% fixed rate to current SVR's. Hardly 'massive'.

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When the £ and the $ collapse against most major currencies you will soon see the effect on interest rates.

We are heading to situation where no one will want to buy our debt and hence rates will have to rise, dramatically.

As we've seen today borrowing this year of £175Bn is way off the mark and the 'experts' are already expecting another 20 on top and that's just for starters.

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I appreciate that.

I was more addressing the "massive overpayments" part of the claim. So they might have come off a 5% or 6% fixed rate to current SVR's. Hardly 'massive'.

One of my colleagues has just been offered 4.99% SVR having come off a fixed deal (which he can get at 5.9%). For the bulk of folk coming off fixed deals now it seems that the low IR party has switched from the punter's back pocket to the banks, a reason why they will keep them low to enable the banks to re-capitalise.

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How do you work that out? Are they coming off fixed rates and going onto BoE base rate trackers + 0.5% deals now then? <_<

This is what my mortgage did about 3 months ago.

HSBC 5 year fix at 5.5% ended and I went onto a "HomeBuyer rate" which is guaranteed never to be more then 1% over BOE base.

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What will happen to the value of your property, which, if I have understood correctly, you "own" via an IO facility?

I was a FTB in 2001, bought a 250K place with a 50K deposit. House prices had already doubled in value from the 1990s lows in london back in 2001. So i was paying peak prices back then.

Initially i took out a 3 year fixed repayment mortgage. The only thing on my mind was that rates went up to 15% in the early 90s. But during that 3 years i realised i was being irrational and wasnt looking at the situation today.

So when the three years was up i switched to an IO base rate tracker life time offset mortgage.

As for what will happen to my the value of my property, i dont really care as i dont plan cash out, i want move up to larger place. So ideally prices would drop. But im more than happy to save up and pay peak prices like i did in 2001.

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This is what my mortgage did about 3 months ago.

HSBC 5 year fix at 5.5% ended and I went onto a "HomeBuyer rate" which is guaranteed never to be more then 1% over BOE base.

I rather suspect your fortune is in the minority, but I'll stand to be corrected. However, is your mortgage portable?

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Paying 2.34% on my BTL loan, overpaying heaps each month ...lovely...rates will stay low for some years I suspect, central bank co-ordination will see to that....

what's the point in overpaying on a BTL loan? you can only tax deduct the interest, so you want to leave that loan as high as possible and earn interest on the money elsewhere, surely?

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Someone who took a 100% NR mortgage in 2007 say 2 yrs fix @ 6.49%, would revert this year to the lender SVR 4.79% I think.

Last time I check, same NR is offering 85% LTV deals @6.99%!!!!! even 7.09%!!!!!!

The gap between 4.79% and 6.99% is huge. So is buying today with lower property prices that much more beneficial afterall for FTBs compared to 2007????

A very close call indeed.

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Someone who took a 100% NR mortgage in 2007 say 2 yrs fix @ 6.49%, would revert this year to the lender SVR 4.79% I think.

Last time I check, same NR is offering 85% LTV deals @6.99%!!!!! even 7.09%!!!!!!

The gap between 4.79% and 6.99% is huge. So is buying today with lower property prices that much more beneficial afterall for FTBs compared to 2007????

A very close call indeed.

100% in 2007 sounds like a lot of negative equity but what do I know!

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I rather suspect your fortune is in the minority, but I'll stand to be corrected. However, is your mortgage portable?

Good question and the answer is I don't know. I will probably want to move at some point in the next couple of years so this will be an issue. For the minute though I am quite happy to stay where I am.

This was a bog standard deal from HSBC at the time, but I know they stopped doing it about a year or so after I got mine.

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Is this the same CITY that are:

surprised by the credit crunch occuring at all.

surprised at the extent of bail outs

surprised by the recent GDP figures from France and Germany

surprised by UK QE being exended

surprised at record low tax receipts for a July.

seems to me they cant predict what they want for lunch.

oh yessy yessy, today we find something to agree upon.

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:lol: Not sure how many threads there have been on the "rates will rise" "rates will fall" debacle but it sure is funny! Nobody really knows nothing, yet so many claim rates will rise. We can all guess what will happen and I wthink thats all that has happened and will continue to happen. Not a pop at op...

So everybody really knows something then?

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  • 440 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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