What does the drop in interest rate mean to you?

[gembaxter25]

I want to write a blog post about this later on today. Just wondered how the drop in interest rate will affect people - both good and bad.

I have a portion of my mortgage that is on a staff rate which tracks the bank of england rate. So great for me that my mortgage payment will drop a little. I have no real savings to speak of - it is all in matched betting.

I guess house values will dip slightly but we have no need to move so as long as we don't end up in negative equity I will be happy for now.

How will today's announcement affect you?

 

[Jon]

We have a fixed mortgage at the moment so won't make any difference to us luckily

 

[gembaxter25]

How long are you fixed for as I think mortgage rates overall will begin to drop. May was the slowest month in a while for mortgage offers to FTB

 

[Jon]

How long are you fixed for as I think mortgage rates overall will begin to drop. May was the slowest month in a while for mortgage offers to FTB

I've had a mortgage for around 8 year and have always been fixed, got another 2 years on the current product

 

[gembaxter25]

We just fixed in March for another 4 years so I am hoping the rates don't drop too much. I am interested to see what the likes of NatWest will do as they talked a couple of weeks back about charging for deposit accounts. I expect to be very busy at work tomorrow!

 

[Cantablanc]

Is there room for mortgage rates to drop much further, even with a base rate cut? I think the rates are at historical low points and suspect there comes a point where the banks can't make money if they drop by too much.

I'll be watching the GBP/USD and GBP/EUR exchange rates very carefully at 12pm and if the cut doesn't happen, or more possibly is deeper than the 0.25% predicted then I shall short GBP with the hope of making some money. This is of course gambling but I have my losses fixed at a very low level (equivalent to a free bet on the MB front!!)

 

[gembaxter25]

I had wondered about doing this. Don't think I know enough yet to do this.

The banks are still making money but it has slowed down. With such low interest rates they are discouraging people from saving. They don't need the capital especially when it costs between £50-£100 to set up a savings account not including the first year of interest.

The slow in mortgages being taken out will have an impact too. I am not sure how another drop in rates will see the economy recover considering the last record low drop was suppose to solve this.