The 25 year mortgage that I took out last July will be paid off in about 5.5 years.
Blimey (and wahoo).
And yes, I know it's rubbish for savers, etc etc. But still.
Are variable rate mortages still dropping though? I think a lot of lenders have now put a cap on how far they will drop the rate.
Mine's still dropping guaranteed to be 0.xx% above base rate for the length of mortgage, so I'm hoping for another drop
Mine (a tracker) is still dropping.
Mine went down with the last drop in rates. £130 a month saved now
My Woolwich offset mortgage is BR+0.49% and they've carried on dropping so far; it's so low that there are Cash ISA's paying better rates so am putting money into them.
I so fixed at the wrong point 🙁
my woolwich offset is +0.35%
any lower and the'll be paying ME interest! 🙂
don't worry, if it falls much lower most people will lose there jobs so you won't have to worry about paying it.
Stoner - when did you get that rate? Mine was the best I could get 2 years ago.
I think 3 yrs ago. And without casting aspertions it was for a very small facility compared to both our property value and income so there will be a low risk margin in our rate as well as cost of funds.
Base rate tracker +0.24% here, with the co-op, set it up about 14 months ago. They were also offering BR -0.01% at the time, but the arrangement fee was horrendous. Now they've stopped doing trackers altogether!
Fixed rate 3 years
approved by our IFA (well a friend who is one)
went through 3 weeks before first rate drop
they are no longer a friend
Well mine was the only rate I could see on their web site at the time so don't know if they had others available; I was a contractor at the time but the amount borrowed was relatively small compared to the property value. I had an arrangement fee but that wasn't too bad.
It's sh1te.
Here's a great idea, lets make all the people who have been careful with their money and have savings bail out the muppets that have borrowed too much.
Mega inflation just around the corner I reckon and then the whole country goes down the pan.
As always, my mortgagee (Scottish Widows) is slow with any rate reductions, in spite of being part of the Lloyds group - Lloyds (well, C&G) has alreadt dropped its base lending rate by 1% to 3%.
I shall be on the phone (again) to SW later to find out what their game is.
same as me Michael, sucks ass doesn't it.
More gutting is my Sister works for HBOS and she is on a staff base rate tracker + 0 %, and they still offer staff 100% mortgages, with zero setup fee/transfer/redemption fee's so she is thinking of buying another house for a few years as an investment.
Fixed rate of 4.99% finshes in May and drops to SVR of 4.79% looking to move within the year so may just keep the mortgage I've got so I'm not tied in until things pick up whenever that happens.
Ridethelakes, just cos people don't have savings doesn't mean they aren't careful with money. In fact, quite the opposite. I would think there are a lot of people who don't have spare money to save and have to be careful with it in order to avoid debt ?
As my brother and sister have rates higher than mine I've offered to take some of their debt and put into onto mine - easy as mine's an offset but I don't think theirs are flexible enough unfortunately.
I like the way they are stripping the savings away from everyone, just before they crash the economy and put everyone out of work.
Good old Gordon, I am glad he knows what he is doing. Lump of Coal anyone? very tasty with a bit of ditch water marinade.
[i]Here's a great idea, lets make all the people who have been careful with their money and have savings bail out the muppets that have borrowed too much.[/i]
That's not really the idea as far as I understand it (I'm sure Stoner will correct me). It's about getting the banks to lend again, specifically to businesses, as it's the lack of working capital available to businesses that's causing them to struggle/fold, which in turn is sending the economy down the pan.
[i]Ridethelakes, just cos people don't have savings doesn't mean they aren't careful with money. In fact, quite the opposite. I would think there are a lot of people who don't have spare money to save and have to be careful with it in order to avoid debt ? [/i]
I didn't criticise the people you mentioned, it's the people that over borrowed and have effectively caused the whole financial meltdown.
These over-leveraged homeowners together with bankers, Governments, they are all culpable for the mess we are in. Pure greed and the careful people are paying for it.
[i]Here's a great idea, lets make all the people who have been careful with their money and have savings bail out the muppets that have borrowed too much.
That's not really the idea as far as I understand it (I'm sure Stoner will correct me). It's about getting the banks to lend again, specifically to businesses, as it's the lack of working capital available to businesses that's causing them to struggle/fold, which in turn is sending the economy down the pan. [/i]
It might not be the idea but it is the end result.
As far as I'm aware IHN thats what the interest rate cuts and the expansion of the money supply are for, its to increase lending to business by banks. The fact that your mortage rate/rate on your savings is falling is a side effect. People need to look at the bigger picture here. So your savings rates are cut, this makes you think, 'might aswell send rather than save', which in turn helps the economy grow. There are obvioulsy very fine balancing points to the economic system.
As Ive said in another thread the distinction to be made is between lending for liquidity's sake (necessary for the economy) and lending for leveraging sake (enhancing returns on investments in a rising market).
The bank/govmt's strategy is to increase the former, without over doing the latter. Most of the public dont discern between the two an come to the vitriolic response as above. The mechanism they are using is reducing the cost of funds to the banks to mean that a higher proportion of their interest earned is "profit" rather than simply pass through cost of funds. "Printing money" is the other method and is supposed to increase the capiacty of the banks to lend, not just the profitability of the banks.
Im not wholly sold on this yet, but then no-one in the world has seen it work in the past 🙂
I would prefer to see 100% loan guarantees for all new business loans instead. And also let some banks fail rather than prop up negative net book values with tomorrow's tax receipts. Dont buy the line that the taxpayer is going to get their money back - if there was money to be made out of toxic debt, the private sector market would be in their like a shot - and they arent! 🙂
And yes as I've said before on here its greed that has caused it and the majority of us have played a part in it. Look at the post above, someone wanting to buy another property now while the prices are cheap and the interest rates are low. Thats just the type of greed that got us into the mess we're in now. I'm as much to blame as many people but I'm just pointing out the facts.
[b]I am a responsible saver, earning nothing on my savings. I'm not happy![/b]
There are lots of unhappy people in the world, the fact that you are loosing a few quid on your savings during these troubled times isn't going to win a lot of sympathy.
[img] 
[/img]
you are earning nothing on your savings whilst lots of others are losing money hand over foot on their property, forking out huge premiums over base rate for fixed rate borrowings and losing their jobs.
I'd shut up moaning if I were you
Banking used to be really simple. Person A deposited money (Saver). Person B wanted to borrow money. Bank manager would look to pay reasonable sum of interest to depositor, and lend money to borrow and profit on the difference, but only if he knew he would get the money back. The collapse in banking is due to the breakdown in trust. We're all loosers in this. Liquidity of money which is causing people to loose there jobs won't improve with lower interest rates as savers like me won't put in bank accounts.
It's about getting the banks to lend again, specifically to businesses, as it's the lack of working capital available to businesses that's causing them to struggle/fold, which in turn is sending the economy down the pan.
Trouble is, it's not high interest rates which are preventing banks lending to businesses, so I'm still struggling to see how this whole strategy is likely to work. AFAICS it's actually the leveragers who benefit first and most from falling interest rates!
lots of others are losing money hand over foot on their property
That's not real money.
of course it is, We have £25K of deposit in this property. In what way is that not real money. It's an investment, just as any form of savings is.
The only 'real' money is kept in a shoe box under your bed.
Believing that saving money is responsible and borrowing it is irresponsible is ridiculous. What sort of return would you get on savings if there was no borrowing?
Yeah but unless you are planning to cash in on your property and not buy another, the fact that the value has fallen is kind of meaningless. If you are going to sell to buy another house, the house you are buying has probably lost similar value so you haven't really lost anything.
If my house was worth £100,000 when I bought it, then went up to £130,000, but is now worth £110,000, have I lost £20,000?
[i]The collapse in banking is due to the breakdown in trust.[/i] No it's not it's due to greed, pure and simple. The breakdown in trust is an effect of that. If you spend more than you have coming in, which is effectively what most banks did, then it was bound to come crashing down at one point.
I'm with you wipeout!
What if your house was worth £100k when you bought it, you worked hard to pay off £20k of capital (like a responsible citizen) and the house is now worth £80k?
Your money's disappeared. That's actual money from your salary that's vanished into thin air. So yes it is a problem.
The collapse in banking btw is due (in my understanding) to the lack of money. Banks just don't have enough to throw about any more. They lent out lots on fragile assets and as those debts are written off, the money's gone, never to return. So lack of money is the problem.
Grumm - your statement makes no account of negative equity which will first eat away at your deposit.
if your house was bought more recently, you paid 120 for it, it rose to 130 but is now worth 110, you're right up shit creak unless your deposit was over 10k
And grumm have you thought about people who have to sell their house because they have lost their job and can no longer afford the mortgage payments. And then when they sell it they are faced with negative equity - if they sell they don't have enough to cover the capital they borrowed and they can't afford to keep the property and pay the monthly payments on the mortgage. To suggest that falling house prices doesn't affect people and isn't real money is pretty naive.
That's assuming that the value of the house isn't going to go back up again to more than what you paid for it though, which it almost certainly will at some point.
Your money's disappeared. That's actual money from your salary that's vanished into thin air. So yes it is a problem.
No it's not. Not unless you were planning on not owning a house and renting instead, but given you've obviously been brainwashed into the idea that a house is an investment not a home to come out with that, then you're not about to do that are you?
What having paid off the capital actually means is that you owe less money, so have to pay less interest (not such a great thing now, but I bet you're more happy that you're paying less interest on the remaining £80k than upset that you're not saving on the £20k). You haven't paid £20k off the house at all - the only link between the house and the loan is that the house is used as security for the loan, which is a side issue.
IMHO this attitude that "I've lost money" when house prices fall is part of the whole problem. If you're ever thinking about moving up the property ladder, then more sensible house prices (noting they're only actually back down to the same level as 2 or3 years ago) is actually a good thing.
I'm not suggesting it doesn't affect people and I feel very sorry for people who are forced to sell, but everyone else can just sit it out basically until prices go back up.
Savings not accruing interest as they should... Pay more into your house to clear the mortgage earlier, you can always draw down again later if you need cash. Or am I missing something.....
I thought the idea was the that banks encouraged folk to deposit/save money by offering them a reasonable return and that this money could then be loaned out? Once everyone starts stashing their cash under the bed, what do the banks have to lend?
people took out 110% mortgages, people took out 5x salary mortgages , people bought way overpriced houses and lied on applications to do it and greedy salesmen helped them
those who bought what they could afford, people who thought what if things get tight in the future and thought there was a possibility that interest rates could go up, and hose values could go down and saved a bit for a rainy day, i feel sorry for as we are paying for a lot of peoples greed and stupidity
the end of the world is nigh!!
rickmeister - MemberSavings not accruing interest as they should... Pay more into your house to clear the mortgage earlier, you can always draw down again later if you need cash. Or am I missing something.....
Yep. You're missing that fact that not everyone has a mortgage - or indeed an income other than that generated from savings (e.g. pensioners).
People losing their jobs and getting reposessed is a separate issue - mmw was suggesting that middle class people with savings had no right to moan because other middle class people owning houses and not getting reposessed were losing out more. I'm afraid I still have relatively little sympathy for anybody who does borrow so much that they land in negative equity though - they are part of the problem.
Lower interest rates, makes the UK a less attractive place for foriegn investors. This is partly why the pound has devalued. We don't produce much in our country, our imports are greater than our exports. Imported goods have become 30 - 40% more expensive. This will lead to inflation. Lowering interest rates further and fiscal easing will lead to further reductions in pound sterling.
How can lowering interest rates and fiscal easing be good?
Or am I missing something
Well no all mortgages are flexible enough for that and there can be fees involved. However, those of us with offset mortgages do this all the time without thinking about it.
and i'm not suggesting that anyone should be surprised if their house drops in value
i AM suggesting that you should count yourself lucky if your income has allowed you to save, i'd rather be renting a house and have £25k in savings right now.
I'm 18 months into a 5 year fixed rate. C'est la vie.
oh and what greatape said, i'm still paying less than i was a year ago
i AM suggesting that you should count yourself lucky if your income has allowed you to save
What, like the pensioners?
i'd rather be renting a house and have £25k in savings right now.
Really? When did you buy?
the end of the world is nigh!!
How about a bit of perspective? So some IT managers are going to have to sell one of their 5 ridiculously expensive mountain bike - boohoo!
About 840 million people are malnourished, and close to one billion find it difficult to meet their basic consumption requirements. More than 880 million people lack access to health services, and 2.6 billion people have no access to basic sanitation.
http://hdr.undp.org/en/reports/
On the news last night it was reported that reduced demand has resulted in workers in southern China struggling to get jobs paying as little as £4 a day. For most life is hard in China at the best of times.
No it's not. Not unless you were planning on not owning a house and renting instead, but given you've obviously been brainwashed into the idea that a house is an investment not a home to come out with that, then you're not about to do that are you?
I'm not a brainwashing victim mate. A house IS an investment. You can rent, or you can buy - why buy? One reason is so that you can get something back from the money you put in. That's called an investment.
Me and the Mrs are mobile people. I don't particularly like living where we do, and I am only living here because the Govt was paying me huge sums of money. Now we're looking for more work we could well be going overseas, or maybe moving out to the countryside with rented city flat. If we had a stack of money in the house we'd sell up, pay the debts and travel or live in a tent or something. That money (that we paid in) has vanished, which means that our options are lot more limited.
Why does it have to be a bad thing that people view their own home as an investment?
IMHO this attitude that "I've lost money" when house prices fall is part of the whole problem.
I HAVE lost money. The value of my investment has gone down. My net worth (assets v debts) is less. So how have I not lost money?
I'm not bleating or whining, or expecting someone to "do something!" about it, just pointing out that I have in fact lost money. I'm in a better position that many, and I intend to work my way out of the situation.
On an off-track but lighter note - Whatever happened to the former STW'er who sold up and took hiself off to live in a tent...... ?
is he still blogging?
Yours Mr MM - 4.5 years into a fixed deal and not bleating - sadly, poo happens, we can moan, we can apportion what we see as blame, we just gotta work through it....
He's not living in the tent anymore, I think they got a bit wet.
Despite it 'shrinking' to seal all gaps - shame that, not for me but had to admire him for his efforts.......
In about 2 years time interest rates are going to move so fast the other way we'll be getting nosebleeds as they go up. Make hay with those savings as you'll need 'em.
haha my fixed rate of 6% ends this year, I'm gonna increase my repayments and kill off as much of it as possible!
I'm happy that I bought our house as a home not an investment, we don't want to move and the fact that I can still pay the same amount of money each month but my mortgage can be paid off in half the time is a bonus.
Reducing debit is better then saving cash, but if you're mortgage free and have cash in the bank, then spend some of it, buy something that will rise in value.
None of feels real to me, the interest people moan they aren't getting could only be paid before on the profits of the silly deals done on mortgages. My house is my house, its only value is what someone is prepared to give me for it, the same as shares and most other investments. Negative equity only effects you if you have to sell
my 175k mortgage is now costing me £35 pcm (0.23% interest). I really can't complain. if things stayed like this, it'd all be gone in under 10 years! won't be though 😐
I'm not sure the OP's maths are right - unless he's massively increased his payment as well?
I'm afraid I still have relatively little sympathy for anybody who does borrow so much that they land in negative equity though - they are part of the problem
So what about a first time buyer who saved hard for a £10k deposit, bought their first home for £100k and has now seen 20% knocked off the value meaning they're now in negative equity?
So what about a first time buyer who saved hard for a £10k deposit, bought their first home for £100k and has now seen 20% knocked off the value meaning they're now in negative equity?
But it doesn't effect them at all unless they have to sell, just pay the mortgage and go and play with the kids ride your bike, etc... Pay off the mortgage at a faster rate if you want to and stop reading the daily mail.
In about 2 years time interest rates are going to move so fast the other way we'll be getting nosebleeds as they go up.
Possibly but I'd imagine if they do the government would step in to force the banks to keep them down???
[i]I'm not sure the OP's maths are right - unless he's massively increased his payment as well?[/i]
Well, I'm paying an amount that was calculated when the rate was 5.85%, it's now accruing at 1.35%, so I make that the best part of four times overpayment.
you've got 4 times as much interest, but not 4 times the capital.
if you borrowed 200k (the exact amount doesn't matter, as the dates will be the same regardless) on your 5.85%, over 25 years the repayments would have been 1270 pcm. of your first payment, ~£300 is capital, the other 970 is interest. all good.
now, if rates the whole time were 1.35%, the minimum would be £785 pcm. your first payment is £560 capital, and £225 interest. the blend of these changes over time, so your last payment is nearly 100% capital.
now, if you choose to overpay by £485, bringing your total payment to 1270, your first payment will be £1045 capital and still £225 interest. Your loan will be paid off in 14 years, 5 months, provided rates remain the same. 10 years off your mortgage is a bloody good thing, but not as good as 20!
this tool is very useful for doing this sort of calculation..
http://www.bankrate.com/brm/calculators/mortgages.asp
even if you paid no interest at all, it'd still take 13 years 2 months to pay off the mortgage at 1270 per month!
But it doesn't effect them at all unless they have to sell,
Or you lose your job. That's been happening a fair bit recently, didn't you hear?
my 175k mortgage is now costing me £35 pcm
You mean the interest is costing you that? You still have the capital to repay yes?
Anyway - it doesn't matter if we all lose loads of money on our houses - they are gonna print a load more now aren't they? I'm off to see Ole One Eye and ask for some.
In about 2 years time interest rates are going to move so fast the other way we'll be getting nosebleeds as they go up.Possibly but I'd imagine if they do the government would step in to force the banks to keep them down???
Not if Iceland's any example. Isn't their interest rate something daft like 30% now? And Japan did the same.
next economic cycle im goign to make sure im bancrupt by the time its over, no feking point saving for a house if the fekwits in charge are going to go for the ohh so clever philosophy of pushing prices up, then just as it looks like those who havent yet might one day soon be able to afford a shed in a crap part of town, bang, and your savings are worth fek all.
Labour- ****ing things up in way pornstars can only dream of.
5lab - ah, fair enough. A Level maths was a long time ago... 🙂
I reckon I could afford to pay off my mortgage about 10 years early if rates stayed the same and I stop saving into my ISA (I already overpay my flexible mortgage by about 15% a month as it is)...
Hmmm...
[i]Not if Iceland's any example. Isn't their interest rate something daft like 30% now? And Japan did the same.[/i]
When? Haven't Japanese interest rates have been under 1% for the last decade now?
she is thinking of buying another house for a few years as an investment.
Seems to me that's the kind of thing that got us into this mess...
Seems to me that's the kind of thing that got us into this mess...
Only partly. People wouldn't have been doing that if it wasn't worth it...
[i]People wouldn't have been doing that if it wasn't worth it...[/i]
But it was only worth it because people were doing it, thus limiting the supply of housing so pushing up the price.