Sunday, February 1, 2009

Free mortgages for everybody

Get ready for the 8p-a-month mortgage as Bank of England prepares to slash rates

Some homeowners could see their monthly mortgage payments drop as low as zero this week. The Bank of England is expected to cut interest rates to just 1 per cent on Thursday, bringing a windfall to those with interest-only tracker loans. If it does, Cheltenham & Gloucester customers who took out a deal at 1.01% below the Bank's base rate will be paying no interest at all. For technical reasons, they will still have to make payments - 8p a month for a £100,000 loan - but the money will be refunded.

Posted by little professor @ 09:53 PM (932 views)
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4 thoughts on “Free mortgages for everybody

  • mark wadsworth says:

    I’ve set up a Fun Online Poll as to what they really should do, see next post above.

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  • This is the logical conclusion of the Bank of England’s policy to chase high house prices. They will have rendered themselves powerless.

    Can I just underline, Quantitative easing will not work. Its been tried before by Japan and didn’t work then. At every juncture in this financial crisis I keep hearing economics ‘commentators’ (I won’t call them anything else) telling everyone that this time is very different to Japan, although everything that has happened so far has played out exactly as Japan’s post-credit boom deflation did.

    Now we hear the UK central bank (those geniuses who have done such a miraculous job of steering the UK economy away from the rocks) telling us that QE might work, because off … erm … no particular reason but we want to give it a try just in case it makes the property market pick up again.

    I despair at the sheer lack of logical reasoning amongst our most senior economists in the Bank of England.

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  • Trouble is, if they make money cheaper, we’ll all have to get some in order to keep what we have!

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  • Welcome to the economic Madhouse 2009.
    One gets the feeliing that this is all going to end up with a rather large Depression.

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