AIBU to think how will the interest rate cut help renters

[Gin96]

The B of E decision to cut interest rates, how is this supposed to help people that rent?

I don’t know why people go for fixed rate mortgages when the interest rate is so low?

Because... they can go up!

@BarbaraofSeville check with your lender because some announced they will help. Repayment holidays, scrap late fees etc. Speak with them if needed

I don’t know why people go for fixed rate mortgages when the interest rate is so low?

Because rates go up as well as down and I want to know exactly how much to budget each month.

I’m going to take a stab in the dark and say you probably don’t work in finance OP?

Fixing at current low rates is probably not a bad idea as they can't get much lower, but we've never fixed in 25 years of having a mortgage and it's been cheaper for all but about 3 months of that time.

No I don’t that’s why i’m asking questions 😊 all i’d say is if you look at fixed rate mortgages if the rate is set low for the next 5 years, you can nearly guarantee to the base interest rate isn’t going to go up as the banks are on it to make money. I’ve done very well out of it and nearly paid of my mortgage in 12 years on a house that’s worth £500k so not bad for someone who has no finance knowledge

When did you take your mortgage out? The lowest variable rate we could find last weekend was 3% above the rate, which means the rate that we’ve fixed at is much lower. It’s great for people on old products that don’t have those floors, but anything newer than 2008 or so is likely to have minimums.

Low interest rates won't help savers

2008 at .49% following the base rate, so my tracker mortgage is .74%, I also don’t pay any early repayment charge, the best financial decisions i’ve made 😊

I’m going to take a stab in the dark and say you probably don’t work in finance OP?

Meeow!

I don’t know why people go for fixed rate mortgages when the interest rate is so low?

Because they can go up again. Ask anyone around in the 90s who saw the rate rocket to 15% in the space of an afternoon.

We've been on a tracker since 2007. I've ignored everyone that told me to get a fix. It's all a gamble though. We are now paying 0.75%.

Many people won't see any benefit from the rate cut though. I don't know how we would pay our mortgage if rates went to 5% though.

I don’t know why people go for fixed rate mortgages when the interest rate is so low?
Because of this.
I don't know how we would pay our mortgage if rates went to 5% though.

I personally like to know how much is coming out each month for foreseeable future

Because they can go up again. Ask anyone around in the 90s who saw the rate rocket to 15% in the space of an afternoon

I remember it well. It was bloody terrifying. Thankfully, I was in a fixed deal that was 13.5%.

All through the years of high interest rates, I had a mortgage and other debt. Now I've got savings and no debt, interest rates are bugger all and my savings are shrinking, in real terms. Talk about bad timing.

Banks aren’t doing anything at the moment as they know this is just temporary.
I doubt it will have much effect

It's to discourage saving and encourage spending. With interest rates so low on savings accounts, many people will choose to spend their money rather than seeing it depreciate (which happens when interest earned is less than inflation). More spending means more money in the economy, which helps businesses and reduces job losses.

It didn't say it is to help renters. This is to help the economy due to coronavirus which is a priority right now!

But anyway .. it will help renters as cheaper mortgage rates!!