No help to the people on fixed rate mortgages....


S

Slider

It's ok cutting the BoE base rate to 1.5% to try and stimulate spending.
But, what about the millions of home owners who are on a fixed rate
mortgage. Sweet FA. Why can't the banks be forced to reduce their fixed
rate mortgages by 1 - 1.5%?

Will the government ever do this?
 
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A

Adrian

It's ok cutting the BoE base rate to 1.5% to try and stimulate spending.
But, what about the millions of home owners who are on a fixed rate
mortgage. Sweet FA. Why can't the banks be forced to reduce their
fixed rate mortgages by 1 - 1.5%?

Will the government ever do this?
I hope not, for the exact same reason that I'd hope that if interest
rates went the other way, the banks would not be permitted to raise the
rates for those with fixed rate mortgages.

There's a clue in the name of the product.
 
R

Ronald Raygun

Adrian said:
I hope not, for the exact same reason that I'd hope that if interest
rates went the other way, the banks would not be permitted to raise the
rates for those with fixed rate mortgages.

There's a clue in the name of the product.
Exactly. Anyway, most fixed rate products are time-limited, so that
when the fixed-rate period expires, the mortgage reverts to the
standard variable rate, which *now* means that it would get cheaper,
even though at the time the loan was sold, expectation was that it
would get more expensive.

You win some, you lose some.
 
T

The Brass Turner

Slider said:
It's ok cutting the BoE base rate to 1.5% to try and stimulate spending.
But, what about the millions of home owners who are on a fixed rate
mortgage. Sweet FA. Why can't the banks be forced to reduce their fixed
rate mortgages by 1 - 1.5%?

Will the government ever do this?
as per what others say.........it's the gamble you take.
 
B

Bartc

Ronald Raygun said:
Exactly. Anyway, most fixed rate products are time-limited, so that
when the fixed-rate period expires, the mortgage reverts to the
standard variable rate, which *now* means that it would get cheaper,
even though at the time the loan was sold, expectation was that it
would get more expensive.
The big deal a few months back seemed to be the large numbers of people on
fixed-rate mortages facing increases when the fixed rate came to an end. Now
that the end of the fixed rate means a lower rate, they're still not happy.

In my case, 100% of my income comes from interest on savings. Am I
complaining? No.
 
R

robgraham

Slider said:
It's ok cutting the BoE base rate to 1.5% to try and stimulate spending.
But, what about the millions of home owners who are on a fixed rate
mortgage. Sweet FA. Why can't the banks be forced to reduce their fixed
rate mortgages by 1 - 1.5%?

Will the government ever do this?
If rates had skyrocketed, would you be prepared to pay to the government
some of what you are saving, to help those who didn't take fixed rates? No,
I thought not.

Rob Graham
 
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T

tim.....

Slider said:
It's ok cutting the BoE base rate to 1.5% to try and stimulate spending.
But, what about the millions of home owners who are on a fixed rate
mortgage. Sweet FA. Why can't the banks be forced to reduce their fixed
rate mortgages by 1 - 1.5%?
For the same reason that Banks can't be allowed to increase the rate of a
fixed rate mortgage if base rates go up.

tim
 
G

GSV Three Minds in a Can

from the wonderful person said:
It's ok cutting the BoE base rate to 1.5% to try and stimulate spending.
But, what about the millions of home owners who are on a fixed rate
mortgage. Sweet FA. Why can't the banks be forced to reduce their fixed
rate mortgages by 1 - 1.5%?

Will the government ever do this?
You're ignoring the fact that funds have to COME from somewhere. If
you'd like to lend your money to your friendly BS (or government) at
2.5% fixed, be my guest .. heck, I might borrow some myself.

Or would you suggest they borrow it at LIBOR (floating) and lend it out
fixed, and eat the difference if/when rates rise again?? .. That seems
awfully close to the great business practises of Northern Rock.
 
N

nebulous

Slider said:
It's ok cutting the BoE base rate to 1.5% to try and stimulate spending.
But, what about the millions of home owners who are on a fixed rate
mortgage. Sweet FA. Why can't the banks be forced to reduce their fixed
rate mortgages by 1 - 1.5%?

Will the government ever do this?
I'm still relatively happy with my fixed rate.

4.59% a five year fix taken out about three and a half years ago. Over the
piece it has served me very well.

Neb
 
J

Jonathan Bryce

Slider said:
It's ok cutting the BoE base rate to 1.5% to try and stimulate spending.
But, what about the millions of home owners who are on a fixed rate
mortgage. Sweet FA. Why can't the banks be forced to reduce their fixed
rate mortgages by 1 - 1.5%?
Because they are still paying me 7% on some of their fixed rate bonds.
 
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M

M Holmes

Jonathan Bryce said:
Slider wrote:
Because they are still paying me 7% on some of their fixed rate bonds.
And paying the government 9% on the preference shares resulting from the
taxpayer bailouts.

The government wants banks to borrow at 9% and lend at 2%. It's almost
as if they want them to be bankrupt.

FoFP
 
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