Anyone got a C&G Tracker mortgage?

[DimPrawn]

http://www.guardian.co.uk/money/2008...y-house-prices

They are Britain's luckiest mortgage borrowers. In September last year, Cheltenham & Gloucester, the home loan offshoot of Lloyds TSB, told borrowers they could remortgage to a deal set at Bank of England base rate minus 1.01%. Interest rates had been edging up in the wake of the collapse of Northern Rock, so it didn't seem quite so amazing at the time.

But today, after Thursday's extraordinary 1.5% cut in interest rates, anyone who took the deal will be paying just 1.99% interest on their mortgage. That's equal to just £165.83 a month on a £100,000 interest-only mortgage, although rising to £423 on a repayment. It's the lowest pay rate on a mortgage that anyone in the industry can remember - and many predict rates could go even lower.

Ray Boulger of mortgage broker John Charcol said: "If Bank of England base rate were to fall to 1% - and in the US it's already at 1% - then borrowers with this C&G loan could see their pay rate fall to zero, or technically below zero. At that point, the bank would be paying you to have a mortgage."


You lucky lucky people!

I hope you are going to send Brown a thank-you card?

[AtW]

Whoever devised such contract there has been fired. Or maybe not.

Makes you wonder if all those big bank types actually do "What If" scenario modelling at all. At the very least they should have included minimum BoE rate at which such open ended committment would become invalid.

[BrilloPad]

Originally Posted by AtW

Whoever devised such contract there has been fired. Or maybe not.

Makes you wonder if all those big bank types actually do "What If" scenario modelling at all. At the very least they should have included minimum BoE rate at which such open ended committment would become invalid.

A good economic post from atw

Its not just the banks who should do "what if" stuff - the FSA should too! and stop all this ridiculous red tape form filling.

Goldman Sachs do "what if" stuff - the reason why they do better than others. and they apply comon sense......

[HairyArsedBloke]

Sloppy journalism, but what do you expect from the Guardian.

If they had done a proper job then they would have known about the negative interest rates in Japan back in 1998. Oddly enough, it didn't work there then - and it wont work here and now.

[thunderlizard]

Assuming the prices of their houses don't fall during that period, they'll be coining it in!

[sasguru]

Sorry what's a mortgage? The concept is getting vaguer with time

[BrilloPad]

Originally Posted by sasguru

Sorry what's a mortgage? The concept is getting vaguer with time

WE are going to ban them in the UK. Upset too many muslims.......

[Turion]

It really depends on how long the deal lasts. Is it long term thing or just for 2 years. Anyways, Sept 2007 was the market peak, so for an average house purchase, they've lost 30k and could well be in -equity. S'pose the low interest rate will benefit them, but if they'd waited...

[BrilloPad]

Of course if people just saw houses as a place to live in - instead of some sort of casino - none of this would matter.

But that is the way things are and I intend to get a BTL once prices stop falling.....

[TheFaQQer]

Originally Posted by sasguru

Sorry what's a mortgage? The concept is getting vaguer with time

Ask SandyDown - she knows all about them, IIRC.