What is the point of interest cuts?

The bank of England are cutting rates again I hear. My mortgage doesn%26#039;t go down though. I am on a standard variable and my lender never pass the advantage on to me. I missed out in December and will again. The Govt need to be more stricter with these mortgage companies. I really could do with the lower payments at the moment. As last May my discount rate ended and my payments went up by 250 pounds in one go!. Then my mortgage lender would not let me take out a new fixed rate deal. These lenders are creeps. As soon as interest rates go up your mortgage does. When interest rates go down the mortgage never does.

What is the point of interest cuts?unsecured loan

When the BOE cuts interest rates, your lender is not mandated to pass on that cut to you. Yes, I know it seems unfair and conversely lenders are all too quick to pass on an increase immediately. Essentially, a cut by the BOE is aimed at business and not the individual . . . it hopes to create a certain amount of cheaper borrowing for companies to invest in capital equipment, job creation and the likes. When the economy slows, as it is doing, the BOE/Government must try to counteract that slowing in order to keep things on an even keel and promote growth. In the short term, you may not benefit but the emphasis is on the bigger picture. I know it can be difficult and we all suffer a little, but interest rates even at what they are today are historically low, so if you find yourself in difficulty in the short term, you have to reconsider your options with either other lenders or even economise for the short term. I hope everything works out for you.

What is the point of interest cuts? loan

Are you on a variable or a fixed rate mortgage?

if you are fixed rate you will never see a difference, whatever the rate may be.

Dont forget also that the bank of englands interest rate is a SET base rate, and mortgage lenders only use that figure as a guideline rather than a fixed amount.|||I think you need to move mortgage lender|||You arent fixed to one lender, you can switch lenders any time, especially as your discount rate has ended. You should really think about shopping around, go speak to an independent mortgage broker who will be able to search a panel of lenders for you to find the best deals (for free).|||The Bank of England doesn%26#039;t have any part to play in mortgage rates. The repo rate it sets is the target rate at which banks lend to each other, and at which it provides short term cover (liquidity) when needed. The repo rate is being lowered to encourage banks to be more relaxed about lending money to each other, because if they don%26#039;t there is a possibility that your lender may not be able to get access to %26quot;cheap%26quot; money to cover the loan it made to you. If they can%26#039;t they will want to pass on the additional cost to you. You may not appreciate that banks lend and borrow off each other every day because they are obliged to balance their books. They don%26#039;t have a choice but to borrow money if they think they might be short. And when other banks are reluctant to lend the price (interest rate) of those funds goes up. Recently banks have sometimes been having to borrow at rates way above the rate you are being charged.

The rate charged by your mortgage lender is influenced by two things: the amount of profit they want to make and the amount of risk they think they are taking by lending you the money in the first place. If they thought that the amount of profit they make from you wasn%26#039;t worth the risk they take in lending it to you, i.e. that they might end up losing money, they wouldn%26#039;t lend to you at all. They won%26#039;t want to let you change to a fixed rate now because they would have to fix you at the sky-high rates that the market is playing with now, and as bad as your situation is, you really don%26#039;t want to be exposed to them. What everyone missed in the Northern Rock fiasco was that the reason they went to the Bank of England in the first place was so that they didn%26#039;t have to pass the real cost of funds onto their mortgage borrowers. They could have done that, and repossessed all the houses of the defaulters that eventuated (that%26#039;s what always used to happen) but they chose instead to suck it up themselves. Their mortgage holders (I am one) are very very lucky.

Unfortunately you have fallen into a common trap. You have been dazzled by the lower %26quot;teazer%26quot; rate that is used to get you tied into the mortgage, but the rate that really matters is the one that applies after the teazer period, and your one isn%26#039;t fixed to anything. Personally I would never go for a mortgage rate that is variable unless it is tied to the repo rate. If I were you I would try and tighten my belt and get through this. The bad times will pass and you%26#039;ll be able to renegotiate a better deal.

Best of luck.|||If your not happy with your mortgage then re-mortgage there are lots of deals around.|||It%26#039;s a fiscal thing. Management of the Economy. It plays havoc though with the returns on my savings.