Reply to: Interest rates in the US

[Dow Jones]

Not personally bothered

All my mortgages are on fixed rates until next year, so not hugely affected personally, but I have a couple of small unsecured loans on variable rates and those went up by 0.25 twice when rates went up. Paying still the same despite a couple of rate decreases. Again, my point is what should happen to the variable mortgage rate (not tracker/fixed/etc), no wonder there are hardly any takers for these, as opposed to their popularity 10 years or so ago.

[snaw]

Interesting.

What I want to know is - 'Who are the Central Banker's Central Bankers ?'

Ask Chico.

[snaw]

There are fixed, tracker, other pre-specified and normal rate loans/mortgages. The last ones should be affected by base rate changes, but often are not. My point is that both the US and the UK central banks' actions are not relevant to the real rates set upon by the market (ie the lenders).

Yep, but if you buy into a non tracker mortgage then you should know what it is you're buying into - which isn't your rate moving when interest rates get cut. That too me is pretty straightforward, and if you bought into one of those mortgages expecting it to get cut when rates go down then you deserve what you get. I don't think that's a complicated idea.

[AlfredJPruffock]

There are fixed, tracker, other pre-specified and normal rate loans/mortgages. The last ones should be affected by base rate changes, but often are not. My point is that both the US and the UK central banks' actions are not relevant to the real rates set upon by the market (ie the lenders).

Interesting.

What I want to know is - 'Who are the Central Banker's Central Bankers ?'

[Dow Jones]

Over-simplifying

There are fixed, tracker, other pre-specified and normal rate loans/mortgages. The last ones should be affected by base rate changes, but often are not. My point is that both the US and the UK central banks' actions are not relevant to the real rates set upon by the market (ie the lenders).

[snaw]

You can only benefit if you are on a tracker mortgage which has to follow the base rate up or down. Any other rate changes are subject to approval by each bank which is not obliged to follow any steps taken by the central bank.

That's stating the obvious. Is there any bank in the world who's sold a customer a fixed rate mortgage who turns round when the rates dip beneath the fixed rate and says - hey, rates have gone down and we're feeling generous so here's an extra cut, just for you.

[Dow Jones]

BoE rates

You can only benefit if you are on a tracker mortgage which has to follow the base rate up or down. Any other rate changes are subject to approval by each bank which is not obliged to follow any steps taken by the central bank.

[snaw]

Agree with MrR, lowering base interest atm is to help banks recover some of their losses, not the average borrower who will find that real interest rates are still edging up.

Not exactly true. Real interest rates will come down with each cut, it's just a question of how much of that cut is passed on to the customer. It's still not as low as when I took out my mortgage in NYC 5 years ago so I'll be stacking to my old one for now.

[Bagpuss]

According to the Sunday Mail the average 12 month personal loan of a £1000 is now circa 18% apr. Cheap as chips

The last time we saw those rates for borrowing BoE interest rates were circa 10%.

The inter bank rate is the real interest rate

[DimPrawn]

Agree with MrR, lowering base interest atm is to help banks recover some of their losses, not the average borrower who will find that real interest rates are still edging up.

Except for savers, who will be passed on the 0% interest rate.

[Dow Jones]

Lower interest rates

Agree with MrR, lowering base interest atm is to help banks recover some of their losses, not the average borrower who will find that real interest rates are still edging up.

[MrRobin]

Thing is, the 0% wouldn't be passed onto Joe Public, the banks would just cream off more of a margin.

AJP, think you mean North Korea? Still need S Korea to continue making those cheap USB memory sticks to keep inflation down over here.

[Churchill]

Yes - you are corrent - property prices in Tokyou fell 90 per cent and still have not recovered - 0 per cent it smacks of absolute desperation - a fitting end to the Bush admin - altough there is still time to bomb Iran - sorry South Korea.

Shirly shome mishtake ?

Loads of 'em. Are you still pissed from last night?

[Bagpuss]

Yes - you are corrent - property prices in Tokyou fell 90 per cent and still have not recovered - 0 per cent it smacks of absolute desperation - a fitting end to the Bush admin - altough there is still time to bomb Iran - sorry South Korea.

Shirly shome mishtake ?

Good job sorting out the middle east brought us cheap oil!

Remember last time we had a republican president? war and recession, same 'ol, same 'ol

[~Craig~]

Yes - you are corrent - property prices in Tokyou fell 90 per cent and still have not recovered - 0 per cent it smacks of absolute desperation - a fitting end to the Bush admin - altough there is still time to bomb Iran - sorry South Korea.

Shirly shome mishtake ?

It seems a bit of an over reaction, can you see ours going down anymore?