:

No help to the people on fixed rate mortgages....

It's ok cutting the BoE base rate to 1.5% to try and stimulate spending. But, what about the millions of home owners who are on a fixed rate mortgage. Sweet FA. Why can't the banks be forced to reduce their fixed rate mortgages by 1 - 1.5%?
Will the government ever do this?
Reply to
Slider
"Slider" gurgled happily, sounding much like they were saying:
I hope not, for the exact same reason that I'd hope that if interest rates went the other way, the banks would not be permitted to raise the rates for those with fixed rate mortgages.
There's a clue in the name of the product.
Reply to
Adrian

Exactly. Anyway, most fixed rate products are time-limited, so that when the fixed-rate period expires, the mortgage reverts to the standard variable rate, which *now* means that it would get cheaper, even though at the time the loan was sold, expectation was that it would get more expensive.
You win some, you lose some.
Reply to
Ronald Raygun

The big deal a few months back seemed to be the large numbers of people on fixed-rate mortages facing increases when the fixed rate came to an end. Now that the end of the fixed rate means a lower rate, they're still not happy.
In my case, 100% of my income comes from interest on savings. Am I complaining? No.
--
Bartc
Reply to
Bartc

If rates had skyrocketed, would you be prepared to pay to the government some of what you are saving, to help those who didn't take fixed rates? No, I thought not.
Rob Graham
Reply to
robgraham

For the same reason that Banks can't be allowed to increase the rate of a fixed rate mortgage if base rates go up.
tim
Reply to
tim.....
Bitstring , from the wonderful person Slider said
You're ignoring the fact that funds have to COME from somewhere. If you'd like to lend your money to your friendly BS (or government) at 2.5% fixed, be my guest .. heck, I might borrow some myself.
Or would you suggest they borrow it at LIBOR (floating) and lend it out fixed, and eat the difference if/when rates rise again?? .. That seems awfully close to the great business practises of Northern Rock.
--
GSV   Three Minds in a Can 
13,113 Km walked. 2,500 Km PROWs surveyed. 45.1% complete.
Reply to
GSV Three Minds in a Can

I'm still relatively happy with my fixed rate.
4.59% a five year fix taken out about three and a half years ago. Over the piece it has served me very well.
Neb
Reply to
nebulous

DUH !? .... because they are FIXED RATE mortgages!
They won't.
When people took out fixed rate deals, they did a deal: they got the safety and assurance of a fixed repayment amount for a period of time in exchange the bank took the risk that [variable] interest rates might rise and they wouldn't be able to pass the rise on to the customer.
The downside to getting a fixed repayment amount is that you lose out when interest rates go down. Tough!!! Fixed rate borrowers made their bed, and they have to lie in it. Life can be tough sometimes LOL !
Reply to
Richard

It's not even that simple.
The Bank will have "bought" the money off of someone else at the fixed rate.
It is this third party that's taking the risk.
tim
Reply to
tim.....

And paying the government 9% on the preference shares resulting from the taxpayer bailouts.
The government wants banks to borrow at 9% and lend at 2%. It's almost as if they want them to be bankrupt.
FoFP
--
"Speech is only free if everyone agrees with you. 
 Otherwise it's 'insulting' or some such twaddle." 
 Click to see the full signature
Reply to
M Holmes

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.